... trying to play catch-up with recent developments ...
(snip)"This first round of reform could be labeled as the 'neutron bomb' of the insurance industry: it leaves some of the private apparatus standing, but it irradiates whatever remains of the industry's market viability.
The bill's centerpiece is a clause prohibiting insurers from denying coverage based on a pre-existing medical condition. However noble and marketable an idea, this proscription removes the very basis upon which any insurance model operates profitably.
A system of insurance requires that premiums be collected from a pool of low-risk people so that funds are available in case a high-risk event befalls a particular person. In that way, premiums can be low and coverage can be widely available, even if the benefits offered are hypothetically unlimited.
For example, homeowners buy fire insurance even though their houses are very unlikely to burn down. Recognizing that a fire could wipe them out financially, most homeowners endure the cost of coverage even if they never expect to collect. The same model applies to health insurance in a free market.
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!
Correctly anticipating this incentive, the Senate bill imposes an annual fine which gradually escalates to $750 for those who fail to buy coverage. So what? I would gladly pay $750 in order to avoid the $8,000 per year I pay now for personal health insurance. Currently, I'm relatively healthy for a 46 year old and I don't anticipate making a big claim. But if I do, under the new rules I can always get 'insurance' after the fact. Heck, if I can stay healthy for the next couple of decades, I'll save a fortune. Think about how much easier the decision would be if I were 20 years younger! Since most people are capable of figuring this out, the entire insurance industry would collapse under such a system.
There can be no question that $750 annual maximum penalty is a mere placeholder. It is the camel's nose under the tent. When the non-discrimination provision kicks in, the only way these companies could remain solvent would be for Congress to raise the fine to the point where the penalty is greater than the gain of skipping coverage.
For me, that would have to be roughly $8,000 per year. Introducing such a fine right now would have surely killed the bill. So, the wily wonks in Washington have chosen to move slower, knowing that once the first step is taken, the second becomes inevitable.
However, there is another, more devious possibility. Perhaps our elected officials actually intend to bite the hands that feed them. They could double-cross insurance companies by not raising the fine in five years, thereby forcing the industry into bankruptcy as millions of healthy people opt-out. During the ensuing 'insurance crisis,' our courageous leaders could ride to the rescue with a nationalized, single-payer system.
The real tragedy is that the current bill does nothing to restrain the forces that are propelling healthcare costs into the stratosphere, namely: regulatory bans of insurance competition, the out-of-control medical malpractice industry, federal programs and subsidies, and a tax code that favors a third-party payment system - which alienates the patient from the cost of his care.
To consider that many in Washington have the nerve to market this multi-trillion dollar monstrosity as a "deficit reduction bill" is to realize that our representatives have lost all touch with reality. For those keeping score, the government made similarly rosy projections in the mid-1960's when Medicare was first introduced. The inflation-adjusted cost of that program already exceeds the original estimate by a factor of ten. That's probably where we are headed this time around."(snip)
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with the latest new 'taxes' per the approved Senate Health Care bill ...
(snip)"These taxes cover everything from indoor tanning salons to over-the-counter drugs.
The taxpayer advocate group estimates the tanning-salon tax could cost $2.7 billion. The $5 billion Medicine Cabinet tax would allow diabetics to purchase insulin, but would prohibit the use of money in Health Savings Accounts, Flexible Spending Accounts or Health Reimbursement Accounts from being used to purchase non-prescription, over-the-counter medications.
“While diabetics thankfully are spared, how does this benefit those who use antacids or asthma inhalers?” Murdock asked.
As of 2014, individual Americans without employer-provided health insurance would be hit with a $15 billion mandate to buy health insurance. Those without “qualifying” government-approved health coverage would have to pay $495 or 0.5 percent of Adjusted Gross Income, whichever is higher. In 2016, that number would rise to 2 percent of Adjusted Gross Income or $640.
Another $15.2-billion tax would require costs to reach 10 percent of Adjusted Gross Income, an increase from the current 7.5 percent before itemized medical expenses could be deducted.
Small businesses with 50 or fewer workers that decline to provide health insurance would face a $28 billion tax. Employers would be forced to pay a $750 fine on each of their 50 staffers if one staffer qualifies for a healthcare tax credit. That penalty would amount to $37,500 annually. Small business owners earning over $250,000 would suffer this same penalty.
Those with “Cadillac” healthcare plans valued at $8,500 for individuals and $23,000 for families face a potential 40 percent excise tax, or $149.1 billion in taxes.
“These taxes, the Congressional Budget Office predicts, “would be largely passed through to consumers in the form of higher premiums for private coverage,” Murdock wrote. “Also ─ in an affront before the law ─ longshoremen are exempt from this tax. Why not ship captains, or nurses, or test pilots?”
Murdock wrote the additional $59.6 billion tax on health insurance companies will also only serve to increase health insurance costs, while the $22.2 billion tax on drug companies would increase drug prices and reduce funds available for drug research.
Those in need of medical products such as hearing aids, heart stents, artificial limbs and other items aimed at improving their life quality would bear the brunt of a $19.2 billion medical products tax."(snip)
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From the standpoint of personal 'crystal ball' gazing, where young and healthy dancers are concerned, as the first author pointed out, it would indeed appear to be the 'least of the evils' situation for those dancers to simply choose to pay the $750 a year IRS 'fine' in lieu of paying $8,000 a year for health insurance coverage that they are very unlikely to use in the near future. After all, with the 'pre-existing conditions' directive in force on health insurance providers, if a dancer DOES develop a serious health problem 10 years down the road, she can then start buying health insurance for $8,000 a year ( and in the meantime save $7,250 per year in premium expense for the 10 healthy years ).
Obviously it's not yet possible to know how the Senate and House versions of the health care legislation will be reconciled ... which in turn will determine a ton of additional specifics. But, besides the $750 a year IRS personal 'fine' for failure to purchase health insurance, several other aspects are relatively certain to survive the reconciliation process ...
- 10% surtax on tanning salon bills ( with 5% tax on plastic surgery probably being dropped )
- 'medical device tax' raising prices on everything from toothbrushes to tampons to breast implants
- an additional IRS 'fine' or 'chargeback' to a dancer's sole proprietor business if she attempts to make use of a gov't voucher to defray part of the cost of purchasing health insurance. In other words, if the dancer's reported $40k income makes her eligible for $6,000 in gov't voucher credit towards the $8,000 annual health insurance premium, she can buy that insurance now for a net $2,000. But when she files her tax return at the end of the year the $6,000 voucher cost ( or some fraction thereof, or a separate IRS 'fine' leveed against her sole proprietor business for failing to provide health insurance ) will be added back to her self-employed dancing income tax bill in addition to regular income taxes due on regular earnings.



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