How Obamacare Will Destroy Private Health Insurance

There’s thousands of pages of technical mumbo-jumbo in the Obamacare bill. Here we show how just three of the provisions will destroy private health insurance.

If you want the government making your health decisions, then you’ve gotta love the latest health care bill.

The following provisions do the job:

  1. “Prohibits insurance rating based on health status or pre-existing conditions, and limits age rating to 2:1.”
  2. “Individuals are required to obtain health insurance coverage or pay a fee equal to lower of 2.5 percent of their adjusted income above the filing threshold or the average premium on the Exchange.”
  3. “The bill establishes a public health insurance option available within the Exchange”

The first ensures that companies will have to take sick people who were not previously paying premiums.  This will cause their costs to rise dramatically. Because people now employed at big companies just to get the health insurance will now be able to move to private insurance, the costs will be much higher than government estimates based just on the currently uninsured.

The second tries to force people to have insurance, so that healthy people will offset the costs imposed by the first provision.  However, the small 2.5% penalty means that all but the most wealthy will find it easier to simply pay the “penalty” (read: tax) rather than buy the now very expensive insurance. This is exactly what destroyed the Massachusetts health insurance plan: people waited until they needed insurance (pregnancy, planned surgery, etc), bought it, had their expensive medical procedures, and then dropped the insurance. Thus provision 2 is merely a hidden tax. You might also notice that it may be unconstitutional.

The third cinches the deal. Because the public will insist that insurance  be available, and the government will force private insurers out of business, folks will have nowhere to turn but the government run plan.

One, Two Three – Boom! Bye bye, private health insurance.

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This entry was posted by John Moore on Friday, October 30th, 2009 at 11:03 PM and is filed under General. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.

About The Author

John Moore
John is an engineer, an occasional activist, an adventurer, a grandfather and a Vietnam Veteran. He's been blogging at Useful Fools for 7 years, and a blog-friend of GM & Woody almost that long . He wishes he were retired, so he could spend more time storm chasing.

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2 Responses to “How Obamacare Will Destroy Private Health Insurance”

  1. Francis W. Porretto says:
    10/31/2009 at 5:22 AM

    I think that if those consequences of the incentives built into the health care bill — into any health-care bill, really — were made plain to Americans in some mass forum, just about no one would favor it except for the hard-line socialists. Indeed, if the incentives built into Medicare and Medicaid had been made plain in 1964, few sensible persons would have favored them, either.

  2. Always On Watch says:
    10/31/2009 at 9:27 AM

    I went through hell trying to get private coverage for my husband. Thank God the insurance was in place before my husband had a stroke!

    I should also mention that we’ve had health-insurance coverage for the past 37 years. Nonetheless, Mr. AOW’s premium was doubled because of pre-existing conditions, and only HIPAA coverage allowed him to have a policy at all.

    Even though Mr. AOW has private coverage with BlueCross, the care facilities keep trying to force us onto Medicaid — in other words, bankrupt us.

    The health-insurance industry certainly has some flaws. But at the moment, private coverage is serving us well. That said, a hike in premiums will force us into the public option to prevent bankruptcy. **sigh**

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