Fatal Flaw in House GOP Health Insurance Proposal

In my mind the biggest problem with the ACA, aka Heritage Foundation/RomneyCare/ObamaCare, is that for people who are not on Medicaid/getting a subsidy to pay for health insurance, it is expensive for most people who do not have employer paid health insurance.

But remember the old system wasn't inexpensive.  When I last worked in 2011, I was paying roughly $400 a month for health insurance with a 3,000 or 4,000 deductible and a higher max out-of-pocket.  My friend, RedStateVT, was in the individual market paying roughly $200 a month for a family policy, but with a 25,000 deductible/max-out-of-pocket.  And the Federal Government was paying $billions to hospitals to compensate them for providing health care to people with no health insurance, while they jacked up the price to insured people for the same reason.  In our economy, everyone needs to cover their costs at a minimum.  That remains true today.

So, now we see the House GOP plan.  People with pre-existing conditions get health insurance at the same price as everybody else if they have maintained insurance coverage.  And people without pre-existing conditions can go uninsured with no penalty and sign up for health insurance when they are good and ready at no penalty if at that moment they do not have a pre-existing condition.  Do you really think people will not game this system to sign up for health insurance when they know they have something coming up?  Do you really think the Hospitals will not have to deal with uninsured patients who come in after an accident?  Do you know that cancer can strike anyone of any age at any time, potentially, and where will they go for treatment?

I know the GOP thinks the later group should suffer financially for their folly, but lets get on to the fatal flaw.

Tax Credits are only a benefit if you work and occur in the 1st 4 months of the year following the year in which you are seeking health insurance.  In the current system, with the requirement that everybody have health insurance, where the insurance company can make a profit in NY costs a full paying individual $500 a month with a $6,000 deductible, max-out-of-pocket.

How is a $4,000 tax credit in April following the year of cash out-flow going to motivate a low/middle income person to pay $6,000 (individual) to $12,000 (family) plus deductibles when they make $40,000 a year pre-tax, 28,000 after-tax and have to pay for rent, food, car, clothes?  No one will pay 40% of their take home for health insurance no matter what the tax credit is.

And once you have uninsured who is going to subsidize the hospitals for their treatment?

And what happens when the tax credit expires in 2020 or whatever the House GOP stuck in the bill?

Their plan is not a functional plan that will maintain coverage for everyone who has it today nor will it lower the price of health insurance for those who are full payers today.

To quote King Donald, "Health Insurance is unbelievably complicated."  My reaction to that was, where has he been if he just figured that out?  And he calls himself the smartest person he knows.  He is delusional, but any more ranting on that point will have to wait for another time.