Greenbeard, he's here from the government to help you.
That's right, I'm a clandestine government agent, part of a secret cabal that killed Kennedy, faked the moon landing, and corrects your misinformation on health care reform.
Or perhaps I'm just a guy who tries to stay informed on health policy.
I have a question in Scenario Form.
Say that I do not have HC coverage and in 2014 my fine is 95.00, I continue on to 2015 and my fine is 325.00, carry on to 2016 and my fine is 695.00, realize now I have been saving the 350.00 per month (or higher as the years go on) Insurance payment for 7 years or 29,400.00 (actually more with costs going up)
Then in July of 2017, I get sick and sign up for HC Insurance for say 400.00 for that month. Now with the new BO plan I cannot be turned down for pre-existing conditions.
I just cannot see how this plan can do anything but drive HC Insurance Costs thru the roof or cost taxpayers Billions if very many people did the same Scenario.
Please explain
First of all, there are dangers that the mandate won't be large enough to fulfill its function of replacing medical underwriting. Uwe Reinhardt had a piece (
"Pitfalls of the Health Mandate") on that possibility in the NYT the other day.
However, note that in your scenario you can't necessarily just sign up in July. The legislation provides for annual open enrollment periods:
(6) ENROLLMENT PERIODS- The Secretary shall require an Exchange to provide for--
(A) an initial open enrollment, as determined by the Secretary (such determination to be made not later than July 1, 2012);
(B ) annual open enrollment periods, as determined by the Secretary for calendar years after the initial enrollment period;
(C ) special enrollment periods specified in section 9801 of the Internal Revenue Code of 1986 and other special enrollment periods under circumstances similar to such periods under part D of title XVIII of the Social Security Act; and
(D) special monthly enrollment periods for Indians (as defined in section 4 of the Indian Health Care Improvement Act).
So if your state's exchange was on a schedule similar to the FEHBP, you'd have to wait until November to sign up for a plan. If your illness is urgent (or, as someone pointed out above, it's not an illness per se but more a sudden catastrophic medical event like a heart attack or injuries sustained in any kind of accident), you're out of luck. So even with guaranteed issue, there's still risk associated with going without insurance.
The penalty levels associated with the individual mandate were weakened several times as the bills bounced through Congress. But we can look at the existing health insurance mandate to get a sense of whether the mandate level is hopelessly inadequate. Massachusetts uses a tiered system for its mandate. Here's what the penalties were
last year:
1. Income under 150% of poverty (FPL) – no penalty.
2. Income between 150-200% FPL – $17 per month/$204 per year
3. Income between 201-250% FPL – $35 per month/$420 per year
4. Income between 251-300% FPL — $52 per month/$624 per year
5. Income above 300% FPL and Age 18-26: $52 per month/$624 per year
6. Income above 300% FPL and Age 27+: $89 per month/$1,068 per year
You'll notice that the Massachusetts numbers are actually
lower than the federal penalty for all but the highest tier. The highest tier would be paying 2.5% of income under the federal law, so the federal penalty only becomes higher than the Massachusetts penalty for an individual making around $43,000 or more. The result has been an uninsurance rate in Massachusetts that's remained at less than 5% even during the deepest recession in decades. Of course, we're comparing Massachusetts's rates from last year with rates that everyone will be charged five and a half years from now but still, the numbers from the one mandate currently in effect aren't particularly discouraging for the future federal mandate.
Not much to explain. Insurance is and has always been about protecting you from an unforeseen risk. If you do away with the incentive to pay monthly premiums while your well, it defeats the very fabric of insurance.
Are you in favor of increasing the mandate penalty?
Some would say, well my tax dollars pay for Emergency Treatments.
Actually, DSH payments to hospitals to cover some of the costs of dealing with the uninsured will be scaled back as part of this law since presumably they'll be much less necessary in a few years.
