U.S. Senate leaders can't be serious about proposed penalties against those who don't buy insurance under their health care reform proposal. It is so low that if this provision survives, it almost assures the death of the private health insurance market.
Under the Senate bill, most would be required to buy health insurance. But the penalty for opting out, so to speak, would be ridiculously low–starting at $95 in 2014 and rising to $750 in 2016, with a maximum of $2,250 for a family.
This is the fatal flaw of the reform bill. If you ban insurers from rejecting those with preexisting conditions, yet set so low a pain threshold for those who refuse to buy coverage, it means many people will simply avoid getting insurance until they become seriously ill.
It would be like requiring a homeowners carrier to sell someone coverage while their house is on fire!
Should this low penalty make it into the final bill, it could be a deathblow to many if not all private carriers. Perhaps that is the Democratic leadership's agenda. In any case, it is a shortsighted and outright stupid move.
On the other hand, while the Senate decided to include a public health plan in its initial bill, it gives each state legislature and governor the right to opt-out.
If this provision survives and makes it to President Obama's desk, I cannot imagine too many states having the political courage to deny their constituents a public option. This debate would make health insurance a hot-button topic in every state election. Legislators and governors who "opt out" might find themselves voted out!
Tell you what. Let's make a deal. We'll allow a public option, but only if the government plan is the one that has to cover those who initially rejected coverage, only to demand it once they become seriously ill.
How do you think that would fly in Congress?
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