Quick thoughts on health bill

As the Senate Finance committee bill for healthcare reform continues to be debated...

- Note the penalty ($750) for choosing not to sign up for some sort of health insurance. Whether this fine is actually a tax is subject to some debate, but like many, I must conclude that people around the country will decide to forgo the cost of a health insurance plan and instead pay the fine (note that it is in the interest of the right to call it a tax and in the interest of the left to call it anything but. Without wading into partisan waters, I consider this penalty for inaction a fine). A healthy person who rarely has need for medical services could decide that a $750 fine is a better alternative to a $1,200 healthcare plan. Of course, that person assumes the risk of not having insurance when he or she requires emergency medical services - but don't people all around the country today take that risk, then burden federal and state budgets when they show up at a hospital's ER in need of care? Those people get the care they need, so do they really assume any risk by not purchasing insurance? Young adults generally visit the doctor less frequently, so they are more likely to choose the fine. This situation poses problems for many players in the healthcare sector.

- Some Senate Democrats are proposing a compromise to get some form of a public option (essentially, a health plan administered by the federal government) in the final bill. That is an option for states to choose whether to participate. This choice would likely be made through action by the state legislature and governor. The nuance you should watch for is whether that option is framed as an “opt-in” or an “opt-out.” In other words, which avenue will require legislative action? If the public option is made as an opt-out, those who oppose that additional health insurance plan will have the uphill battle to convince state legislators to act, or “opt-out” of participating.

- Whatever plan passes through Congress will not result in 100% coverage (see, for example, my first point above). A few months ago, the number of uninsured in the U.S. was quoted by the President and others to be around 45 million. That number included approximately eight million illegal immigrants who would not qualify for an insurance plan partially subsidized by the federal government. Republicans rightly called foul on using an estimate that appeared to inflate the number of uninsured by including a population that would not be eligible for the proposed solution. Now the key number is shaping up to be 25 million, which is the estimated number of people that will be without insurance under the Senate Finance Committee’s bill. That number includes the same illegal immigrant population, but now opponents are using it to inflate the size of the issue. To his credit, Republican Senator Jim Bunning, in his statement to the Finance Committee on September 22, used the 25 million estimate, but also said that about a third of that is illegal immigrants. Not everyone makes that distinction. So the same tactic from a few months ago is now being employed and all the roles are reversed. Isn’t political gamesmanship fun?