That may sound fair, but such a provision encourages people to go without
insurance until they actually need it. Why put out $5,000 on coverage you
may never use if you can just pay $95 and pick up a policy down the line if
you become ill?
These and other new insurance rules would increase the price of coverage for
everyone -- not just the uninsured. Consider a 25-year old male living in
Richmond, Virginia, for instance. Research using actual enrollee data from
WellPoint, a large insurer, revealed that the major health insurance reforms
under consideration would cause this hypothetical man's premiums to increase
by 155 percent.
His peers in other states would experience similar increases. A healthy
young man in Indianapolis, Indiana, would be saddled with a 178-percent
premium hike. And a similarly situated man in Los Angeles, California, would
see his premiums go up 106 percent.
Families with children would also get hit with higher insurance bills. The
same series of studies found that a two-child family living in Milwaukee,
Wisconsin, would see its insurance tab more than double. A family with two
kids in Richmond would face an insurance bill that's 82 percent higher.
Other portions of the reform package would send health costs even higher.
Medical device makers are being slapped with $20 billion in new taxes, and
pharmaceutical companies are expected to kick in $80 billion to fund reform.
These firms will undoubtedly raise their prices in order to offset the cost
of these new government levies. And if insurers face steeper charges for
their beneficiaries' drugs or medical devices, it's only natural that
premiums will go up too.
Last week union leaders met with President Obama to complain about the
Senate bill's 40 percent excise tax on "Cadillac" plans and how that would
negatively affect their members. Now it appears that a tentative deal has
been reached which would exempt unions' collective bargaining agreements
from this tax. In order for the plan to be deficit neutral, revenue will
have to be raised from other sources. A likely target will be the Medicare
payroll tax, which was already going to be increased by 0.9 percent to 2.35
percent in order to fund the previously raised exemption. If accepted, the
Medicare payroll tax will have to be raised even higher to cover the lost
funding.
The give-and-take of the legislative process rarely produces perfect
results, but the health reforms offered by congressional Democrats aren't
just less-than-perfect -- they're worse than the status quo. Americans
should hope that the thread from which the Democrats' reform package is
hanging snaps soon.