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Yeah..and the good thing about this bill is that they cannot deny you if you buy it after you get sick.
LOOPHOLE city. Disposable insurance...buy it when you need it, use it, drop it and pay the $750 otherwise. How can you go wrong with that ?
This is exactly why mandates make it impossible for carriers to compete for business by offering low rates. Insurers already try to keep their rates as low as possible to attract more business and make their profit by having high volume but, keeping them as low as possible turns out to be a very high rate when they have to deal with more and more mandates. Insurers don't make more profit by simply raising rates....that makes healthy policyholders leave in search of less expensive coverage through another carrier....they can easily do that....they're healthy. Only the sick get stuck in the plan and as I've said, the rates spiral out of control. Insurers make their money through volume....it makes their risk more stable and it allows them to charge rates as low as possible. Their profit margin is already calculated into the rates from the very start.
The industry had roughly a 3-4% average profit margin early year before any of the healthcare bills started getting pushed through congress at any cost. Since then, among the larger carriers a couple are now slightly higher (a few percent) but, still modest compared to most other industries (the highest last year was the beverage industry with roughly a 60% profit margin). Here are the current profit margins for some of the major insurers along with a link to verify the info is correct:
The media and others often find exceptions to these facts and statistics and when they do, there's a reason for it....something they're not aware of or intentionally omitting. What's annoying is that they try to use that one example as though it were the industry norm. Every industry has companies that become desperate for some reason and try to get away with something unethical or illegal but, those are exceptions and not the way the entire industry operates. A perfect example, Enron....one of the biggest scams in history but, you don't hear people saying the entire industry is like Enron....and with Enron, they set the pole for the industry before they fell apart. That hasn't been the case in the insurance industry with companies that have tried to get away with things, for the most part it's been only the small ones that have done that (so far!).
Something to keep in mind though regarding your "loophole"....when people beome ill, it often starts out as an emergency or it can be something that needs urgent attention. It's rare to find an insurer that will start coverage for you retro-active from the day you applied (in the past some did that...assuming you got approved....any illness that occured after you applied couldn't be used as a reason for denying you coverage). Most carriers now will start overage for you on the first of the following month. That doesn't do you much good in the event of any emergency or a serious condition like cancer, that you would want to start treatment for as soon as possible to increase your chances of surviving the disease.
Something to keep in mind though regarding your "loophole"....when people beome ill, it often starts out as an emergency or it can be something that needs urgent attention. It's rare to find an insurer that will start coverage for you retro-active from the day you applied (in the past some did that...assuming you got approved....any illness that occured after you applied couldn't be used as a reason for denying you coverage). Most carriers now will start overage for you on the first of the following month. That doesn't do you much good in the event of any emergency or a serious condition like cancer, that you would want to start treatment for as soon as possible to increase your chances of surviving the disease.
Oh I totally agree with you. But there is no wording in this bill to prevent my scenario of gaming the mandate.
Over and over and over...you have heard "No one can be denied" and "they cannot deny you for pre-existing conditions".
It's just so obvious to me..$750 vs $7000 and just buy when you need it.
I've looked to see if this is an impossible loophole and have found nothing to prevent this from happening.
And I'm not the only one who has seen this....
This will put the insurance companies out of business. Government to the rescue with a new plan.
I'm now thinking this is engineered like this on purpose. In 5 years there will be no more private insurance is my prediction.
Slate -> The Fray -> Kausfiles Special (http://www.slate.com/discuss/forums/thread/3542277.aspx - broken link)
"However, the health care bill removes the need for healthy individuals to carry insurance. Knowing that they could always find coverage if it were eventually needed, people would simply forgo paying expensive premiums while they are healthy, and then sign on when they need it. But insurance companies cannot survive if all of their policyholders are filing claims!"
Ezra Klein - The individual mandate is too good of a deal, not too bad of one
"Moreover, it's simply not true, as Ross says, that the people paying the $750 individual mandate penalty get nothing in return. Far from it, in fact. For one thing, they get access to emergency care, as happens now. For another, they get the chance to come back into the system when they actually need insurance. Someone who puts off purchasing coverage and then tries to buy Aetna's plan the first time they collapse unexpectedly will not be sold a plan. Having chosen not to buy insurance when they didn't need care, they can't buy it now that they do need care. They become the priced out or, in some cases, locked out.
Under reform, these people get the chance to come back into the system when they need coverage. They can't be discriminated against."
Congressional Budget Office on Healthcare : Zeeter.net
"Most Americans pay over $4000 a year for their health insurance and over $12,000 a year for their family health insurance. Why not just drop the $12,000, pay the $750 fine for yourself or $3000 for a family of four, and just pick up the insurance when I need it? Under this plan, it really is stupid NOT to do this. In effect, it would be more cost effective for all Americans to just drop their coverage if they are healthy. They can pay for the occasional checkup, and if anything turns up during the checkup they’ll just call the insurance company and pick up a policy. What person in his right mind would carry insurance under those circumstances unless they actually were sick?"
Lookig at the problems they had sign semior to aprt D and thinking they then have to actually fine them;I really doubt that they will be able to fine many that don't signup. I mean they are talking about 30 billion people trying to get signed up;n way they are going to be able to find those that don't and fine them anytime soon. Its going to take four years just to start teh program.Imagine the paperwrok that will make the medicare debacle look like nothing really.If tehy pass the Dr. Fix which pelosi sayd they will 200+ billion out the door on the CBO estimate.
Oh I totally agree with you. But there is no wording in this bill to prevent my scenario of gaming the mandate.
Over and over and over...you have heard "No one can be denied" and "they cannot deny you for pre-existing conditions".
It's just so obvious to me..$750 vs $7000 and just buy when you need it.
I've looked to see if this is an impossible loophole and have found nothing to prevent this from happening.
There's no doubt about them having to accept you regardless of health status. I've mentioned that they have to do that now on group insurance and some states require them to do that on individual too (the rates are insane for everyone because of it). Again, the problem is distributing the risk evenly and not just letting everybody sign up with whom ever they want to, causing some insurers to have a much higher amount of risk (and therefore claims) than others, out of pure luck. What might have otherwise been the best and most efficient carrier, could end up getting stuck with a disproportionate amount of unhealthy customers and ultimately end up being the worst insurer to have coverage through (eventually going bankrupt....and they all will too.....one at a time).
I've been a broker for 15 years now but, I could have told you this if I was in business for less than a year. I know darn well with all the this administration has consulting them on this healthcare bill, that they're well aware of all of this. They're going to end up with a single-payer (the government) that will force health care providers (doctors, hospitals, etc.) to accept a lot less for what they do. I think they're counting on a whole new generation that's eager for an income after graduating from school and will be willing to work for a lot less than in the past. This will have to impact quality in a big way, especially for the first decade or two (while waiting for that "new" generation to be old enough to work). I can't see how there won't be a shortage of dotors until then. What normally would be called "growing pains" in any other industry, you can't have in the healthcare industry where peoples lives will be at risk because of it.
The problem with your idea is, let's say you have a heart attack and get rushed to emergency room (uninsured at that moment). Even if you where able to sign up for coverage as soon as possible and it even went into effect immediately, you still already incurred a whole bunch of bills for the treatment you've received up until that point that aren't going to be covered under the insurance that just went into effect. You can't submit claims for treatment you received during a period of time when you had no coverage yet.
As pointed out in another thread, the most likely version of Obamacare requires insurance companies to sign people up even if they have a "pre-existing condition"... and the plan levies a relatively small fine on people who don't carry insurance.
So it makes clear economic sense for people to drop their health insurance and pay the fine, until they actually get sick or injured. Then they can sign up to have insurance companies pay for their medical care, paying the normal premiums, stay until the problem is remedied, and then drop the insurance again.
My question is:
How can the insurance companies survive when more and more of their "customers" do this?
A company is practically guaranteed under this plan, to get almost no premium payments from their "customers". And only then if they are simultaneously paying out much higher amounts for the medical care that EVERY customer needs. Customers who don't need medical care, have dropped their insurance (until the next sickness or injury). Even if the govt sends them money from the fines, it is a much smaller amount than ordinary premiums would be.
Any way you look at it, the cash flow is negative. This plan pretty much guarantees that insurance companies always pay out more than they take in.
How, exactly, will these companies survive economically?
When I ask this, I often hear snarls of "Oh, you're on the insurance companies' side, eh?"... especially when the snarler cannot answer the questions.
Is this the ultimate "revenge of the liberals"? Where angry leftists get to legally damage (or destroy?) insurance companies they imagine have somehow wronged them? Without having to prove to anyone they've actually been harmed?
When you people aren't busy lying through your teeth, you're building false arguments on top of a faulty premises. Either understand the bill and try to discuss it intelligently, or attend a liar's anonymous meeting.
When you people aren't busy lying through your teeth, you're building false arguments on top of a faulty premises. Either understand the bill and try to discuss it intelligently, or attend a liar's anonymous meeting.
no need, liberals are already lying through their teeth to get this passed. why else would they not even bother reading the bill before they might take a vote on it.
Individual MandateReduces and phases in the penalty. Penalty for an individual is the greater of a flat fee of $695 by 2016 or 2.5% of income by 2016. Penalty for a family is the greater of 3 times the individual flat fee penalty $2,085 or 2.5% of household income.Penalty for an individual is the greater of a flat fee of $750 or 2.0% of income. Penalty for a family is the greater of 3 times the individual flat fee penalty $2,250 or 2.5% of household income.2.5% of income by 2016 with a limit of the average national health premiumTo those planning on 'just paying the fine, check this summary...scroll down to the chart for Individual Mandate Wonk Room » ANALYSIS: How The Reconciliation Package Improved The Senate Bill
"Penalty for an individual is the greater of a flat fee of $750 or 2.0% of income.Penalty for an individual is the greater of a flat fee of $750 or 2.0% of income. Penalty for a family is the greater of 3 times the individual flat fee penalty $2,250 or 2.5% of household income Penalty for a family is the greater of 3 times the individual flat fee penalty $2,250 or 2.5% of household income"
2% or 2.5% might be a bit/lot bigger than $750
That's the Senate version...House or Reconsiliation versions slightly different.
Individual MandateReduces and phases in the penalty. Penalty for an individual is the greater of a flat fee of $695 by 2016 or 2.5% of income by 2016. Penalty for a family is the greater of 3 times the individual flat fee penalty $2,085 or 2.5% of household income.Penalty for an individual is the greater of a flat fee of $750 or 2.0% of income. Penalty for a family is the greater of 3 times the individual flat fee penalty $2,250 or 2.5% of household income.2.5% of income by 2016 with a limit of the average national health premiumTo those planning on 'just paying the fine, check this summary...scroll down to the chart for Individual Mandate Wonk Room » ANALYSIS: How The Reconciliation Package Improved The Senate Bill
"Penalty for an individual is the greater of a flat fee of $750 or 2.0% of income.Penalty for an individual is the greater of a flat fee of $750 or 2.0% of income. Penalty for a family is the greater of 3 times the individual flat fee penalty $2,250 or 2.5% of household income Penalty for a family is the greater of 3 times the individual flat fee penalty $2,250 or 2.5% of household income"
2% or 2.5% might be a bit/lot bigger than $750
That's the Senate version...House or Reconsiliation versions slightly different.
Well for the fine to be equal to the yearly premium of $7000 then the annual salary needs to be $350K for an individual. Anyone making under $350K is better off paying the fine.
Well for the fine to be equal to the yearly premium of $7000 then the annual salary needs to be $350K for an individual. Anyone making under $350K is better off paying the fine.
Insurance is a matter of odds/gambling.....although it may be less expensive to go without and pay a substantial price for literally 'nothing' one must assume the risk that you can plan for when you might need that expensive medical care and it won't be from a sudden emergancy.
Perhaps those planning on doing so, especially the young & healthy, should check with an actuary and see what the odds are that an accident is more likely than an illness for which treatment can be postponed until a policy is obtained.
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