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Individual Irresponsibility in the President's Healthcare Reform Plan

 |  By Philip Betbeze  
   February 26, 2010

One well-known saying in poker is that if you don't know who the sucker is at the table, it's probably you. The same could be said for healthcare reform. And after looking over my colleague Janice Simmons' reporting earlier this week on what's in the president's agenda on healthcare (better late than never), the taxpayer is the clear sucker, but I don't want to take my analogy too far. There are others.


Because it appears the two bills passed in 2009 will have a difficult time being reconciled thanks to the Republicans' January Senate victory in Massachusetts, the president has reopened the bidding, as it were. As I've written before, the concept of shared sacrifice and a focus on improving efficiency and cutting costs was missing from those bills to begin with, and whatever cost cutting or sacrifice that was in them has been slowly gnawed away by skilled lobbyists. It's still all about coverage, though it remains to be seen how good that coverage will be. Don't count on that changing much following yesterday's conference with Republicans.

The president welcomed the minority party into the discussions with hopes that refining the two bills will bring on enough Republican support to pass some version of health reform this year. At least that way, during elections, members of Congress can point to something, however gutted, that they've actually accomplished over the past two years.

By now you've probably guessed I'm no fan of the process, nor of the horse-trading that goes on when Congress attempts to tackle legislation of substance.

So who's the sucker in healthcare reform? You are, in a couple of different ways, but the main way you're a sucker is in the "individual responsibility" area of Janice's story.

Under the president's new plan, all individuals would be required to obtain insurance coverage. But "require" is such a weasel word.

For those who don't, the President's proposal follows in part the Senate approach, but lowers the penalty that individuals would pay—from $495 (in the Senate bill)—to $325 in 2015; and from $750 to $695 in 2016. Subsequent years would be indexed to $695.

In other words, you can go without insurance, but it'll cost you the amounts I just listed. Seems like a bargain to pay the penalty—something many Massachusetts residents quickly discovered when their state attempted universal health insurance two years ago. But even if you've figured out how to game that system, you still get nailed as a taxpayer.

Here's why. The consumer protections in the president's proposal ban the exclusion of individuals with pre-existing conditions. That means I can get insurance at any time. So why would I choose to pay thousands of dollars a year in health insurance premiums if I could pay the minimal fine each year and get insurance—no questions asked, essentially—when I got sick? I wouldn't, and neither did loads of people in Massachusetts when a similar low penalty was enacted.

The result is that nearly everyone will be "covered" whether they're insured or not. They'll be treated, and someone else will pay the cost. That's the way it is now, and that's the way it will continue to be if these bills pass—just under a different mechanism. Premiums from commercial insurers will be sky-high, if commercial plans even continue to exist long-term. What better way to get the deeply unpopular public option back in the mix in a few years?

And even if commercial insurance doesn't go away, it certainly won't be cross-subsidizing the government payers' underpayments anymore. So then there's no other option but the public one, which, oh yeah, has supposedly been taken off the table. Forgive me for seeming cynical, but some of these regulations, it seems to me, if enacted, will leave no other option long-term than—you guessed it—the public option.

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Philip Betbeze is the senior leadership editor at HealthLeaders.

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