Massachusetts patients are demonstrating that the individual health care mandate can be gamed

Democrats claim their newly passed health insurance reform, signed in March by President Obama, will eventually provide coverage for more than 30 million uninsured people. Don't bet on it.

The key to achieving that goal, Democrats argue—along with expanding Medicaid and subsidies for buying coverage—is the individual mandate, which requires individuals to have health insurance or pay a fine. The mandate is supposed to push nearly everyone into the pool, to minimize free-riding on the system.

But what if millions of Americans decide it's a better deal to pay the fine and remain uninsured until they need coverage?

It appears that's exactly what's happening in Massachusetts, which passed its own Obamacare-like reform with an individual mandate in 2006.

Last year Charles Baker, former CEO of Harvard Pilgrim Health Care, one of Massachusetts's largest health plans, noticed some health insurance brokers posting comments on his widely read blog. They expressed suspicions that people were applying for health coverage after a medical condition developed, got the care they needed, and then dropped the coverage.

Coverage for an individual, noted Mr. Baker, now a Republican candidate for governor, might be $2,000 to $3,000 a year, whereas the penalty was only about $900. He asked his finance people to see whether they could find any discernible patterns.

Boy, did they.

Between April 2008 and March 2009, 40 percent of the individuals who applied to Harvard Pilgrim stayed covered for less than five months. Yet claims were averaging about $2,400 a month, about six times what one would expect.

What could go wrong when progressive bureaucrats regulate health insurance rates?

ObamaCare has created a high-risk game that will likely end in disaster.

Last week's news out of Maine and Massachusetts offers an unappetizing foretaste of the destructive rate battles that will plague the implementation of ObamaCare at the national level. These two progressive states have long championed the extended coverage formulas that figure front and center in ObamaCare. Quite predictably, both states are now feeling the financial crunch. Caught between a rock and a hard place, their insurance commissioners have decided to shoot the messenger by turning down requested rate increases sought by major health care insurers.

These rates were rejected as "excessive" in bad economic times because it was deemed inappropriate to allow these companies to earn any profit. Maine's insurance commissioner, Mila Kofman, followed the recommendation of Maine Attorney General Janet Mills to limit the large insurer Anthem ( ATH - news - people ) by a premium increase of 10.9%, not the 18.5% that it had requested. The drama played out roughly the same way in Massachusetts, where Gov. Deval Patrick's insurance commission blocked 235 of the 274 requested increases, thereby forcing insurance carriers to renew coverage at today's losing rates until the matter is resolved in court.

From American Thinker

"At the heart of this debate is the question of whether we're going to accept a system that works better for the insurance companies than it does for the American people -- (applause) -- because if this vote fails, the insurance industry will continue to run amok. They will continue to deny people coverage. They will continue to deny people care. They will continue to jack up premiums 40 or 50 or 60 percent as they have in the last few weeks without any accountability whatsoever." President Obama, March 19, 2010.

Source: HHS, Centers for Medicare and Medicaid Services

Generational theft hides real cost of Obamacare

One of most important assumptions of the founders was that free adults would behave as adults, pursuing rational courses of action in pursuit of their objectives.

On that assumption, they constructed a legal framework for a market system, not only in politics, but in cheese, beer, vegetables, and insurance. What sold best would be produced. What didn't sell would be abandoned.

Young adults have been making rational decisions about their health, often passing up health insurance because that's the way to bet when you're 25. If you're unlucky, you pay off the bet by taking care of your own medical bills.

Now, Barack Obama and the Democrats are telling the young uninsured that they can't do that any more. They have to buy health insurance, whether they want to or not.

That's one of the main reasons the Congressional Budget Office scored the Obamacare bill as it did, instead of putting the cost much, much higher.

Generational theft is on the march. Under Obamacare, twenty-somethings would pay, often unwillngly, so that older people can pay less. Older people, who tend to vote in high numbers, will be grateful for the subsidy. Younger people don't vote so much and have more interesting things to think about.

Cato rebuts Obama's claims on health insurance

"In his most recent weekly radio address, President Barack Obama denounced "willful misrepresentations and outright distortions" in the debate over health care reform. He then went on to repeat one of the most outright distortions in the entire debate: "If you like your private health insurance plan, you can keep your plan. Period."

No, Mr. President. No you can't.

To go straight to the chapter and verse: under Section 59(B)(a) of HR3200, the bill making its way through the House, and Section 151 of the bill that passed out of a Senate committee, every American would be required to buy health insurance.

It is time for the president to stop spreading this particular 'willful misrepresentation and outright distortion.'

And not just any insurance: to qualify, a plan would have to meet certain government-defined standards. For example, under Section 122(b) of the House bill, all plans must cover hospitalization; outpatient hospital and clinic services; services by physicians and other health professionals, as well as supplies and equipment incidental to their services; prescription drugs, rehabilitation services, mental health and substance-abuse treatment; preventive services (to be determined by the Centers for Disease Control and Prevention and the United States Preventive Services Task Force); and maternity, well-baby, and well-child care, as well as dental, vision, and hearing services for children under age 21."

What we need is market-driven health care

"... here's one partial vision of how a system of competitive health care and health insurance might develop if real reform were adopted.

The typical American might purchase high-deductible health insurance policies that would cover expensive treatments for chronic diseases such as heart disease, cancer, AIDS, diabetes, multiple sclerosis, or the catastrophic consequences of accidents. Coverage would also include expensive treatments such as heart surgery, organ transplants, dialysis, radiation therapy, etc. In addition, Americans would be able to buy health-status insurance that would guarantee that they could purchase health insurance at reasonable prices in the future.

The good news is that such policies are available even now."

Government provides 39 % of health care policies

"The system of employer-provided health care coverage is crumbling before our eyes, and for more Americans—and for more American insurance companies—government-funded health care is all that separates them from financial disaster.

A Gallup poll found that the percentage of Americans who say they get their health insurance from an employer has fallen from 58.9 percent in January 2008 to 56.5 percent in May 2009, while the percentage who get it from the government (Medicare, Medicaid, VA benefits) has jumped from 26.5 percent to 29 percent. (The rest purchase it on their own.)

But this poll understates the case. About 17 percent of payroll jobs today are government jobs. Crunch the numbers, and it's more like 39 percent getting insurance from government sources (public programs and public-sector jobs) and about 47 percent from private-sector jobs.

Simply by doing nothing, we're slowly nationalizing health care."

http://www.slate.com/id/2223936/

Dems would drive out private health insurers

"Congress: It didn't take long to run into an "uh-oh" moment when reading the House's "health care for all Americans" bill. Right there on Page 16 is a provision making individual private medical insurance illegal.

When we first saw the paragraph Tuesday, just after the 1,018-page document was released, we thought we surely must be misreading it. So we sought help from the House Ways and Means Committee.

It turns out we were right: The provision would indeed outlaw individual private coverage. Under the Orwellian header of "Protecting The Choice To Keep Current Coverage," the "Limitation On New Enrollment" section of the bill clearly states:

"Except as provided in this paragraph, the individual health insurance issuer offering such coverage does not enroll any individual in such coverage if the first effective date of coverage is on or after the first day" of the year the legislation becomes law.

So we can all keep our coverage, just as promised — with, of course, exceptions: Those who currently have private individual coverage won't be able to change it. Nor will those who leave a company to work for themselves be free to buy individual plans from private carriers."

http://www.ibdeditorials.com/IBDArticles.aspx?id=332548165656854