U.S. Senate leaders can't be serious about proposed penalties intheir health care reform legislation, imposed against those whodon't buy insurance. The fine is so low that if this provisionsurvives, it would almost guarantee the death of the private healthinsurance market.

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Under the Senate bill, individuals would be required tobuy health insurance. But the penalty for opting out, so to speak,would be ridiculously low–starting at $95 in 2014 and rising to astill paltry $750 in 2016, with a maximum of $2,250 for afamily.

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This is a fatal flaw. If you ban insurers from rejecting thosewith preexisting conditions, yet set a ridiculously low penalty forthose who refuse to buy coverage when they're healthy, many willavoid getting insurance until they become seriously ill.

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It would be like requiring a homeowners carrier to sell someonecoverage while their house is on fire! Should such a low penaltymake the final bill, it would be a deathblow to privatecarriers–which perhaps is the Democratic leadership's agenda.

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The House bill is more realistic in this regard, levying apenalty equaling 2.5 percent of income–although individuals couldapply for hardship waivers if coverage is unaffordable (underwhatever standard is ultimately determined).

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Another key controversy is over the public option, with agovernment-run health insurance plan included in both bills.However, the Senate takes a more clever approach, giving each statethe opportunity to opt-out.

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If this provision survives and makes it to President Obama'sdesk, I cannot imagine too many state lawmakers summoning thepolitical courage to deny constituents a public option–especiallyonce they see what private insurance would cost them. This debatewould make health insurance a hot-button topic in every stateelection. Legislators and governors who “opt out” might findthemselves voted out!

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I'll tell you what, let's make a deal! We'll allow a publicoption–but only if the government plan is the one that has to coverthose who initially reject coverage, only to demand it once theyneed expensive care.

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How do you think that would fly in Congress? Talk about anunfunded mandate!

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Meanwhile, I have another beef.

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If having 30-to-40 million uninsured Americans constitutes a“crisis,” how is it Congress is willing to wait three- or fouryears to put its “solutions” into effect? What are people withoutcoverage supposed to do in the meantime?

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I have an idea. How about including the creation of AssignedRisk Pools in each state for those without health insurance?

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I've floated this trial balloon before, and watched it sail awayinto the distance. No one has blown it out of the sky, but nobodyhas reached out to embrace it and call it their own, either.

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It's not a big mystery why such a move is not the firstalternative that comes to mind for members of Congress or the Obamaadministration. Bottom line, it would mean steering billions ofmore dollars into the private health insurance system.

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But if we were to mandate that everyone buy coverage, and makesure they could get it affordably by requiring every private healthinsurer to do their part by accepting policyholders from the poolaccording to their market share in the state, that just might solvethe uninsured problem–and without creating a public option.

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How does that sound to you? If you like the idea, call yourrepresentatives in Congress today!

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