Coyote Blog

Ah, but not when Obamalini The Great says its not, with his years of economic training, and extensive private sector experience.

Just witness the unimpeachable (?) logic:

Mr. Obama: "No. That's not true, George. The—for us to say that you've got to take a responsibility to get health insurance is absolutely not a tax increase. What it's saying is, is that we're not going to have other people carrying your burdens for you anymore . . ." In other words, like parents talking to their children, this levy—don't call it a tax—is for your own good.
Mr. Stephanopoulos tried again: "But it may be fair, it may be good public policy—"
Mr. Obama: "No, but—but, George, you—you can't just make up that language and decide that that's called a tax increase."
"I don't think I'm making it up," Mr. Stephanopoulos said. He then had the temerity to challenge the Philologist in Chief, with an assist from Merriam-Webster. He cited that dictionary's definition of "tax"—"a charge, usually of money, imposed by authority on persons or property for public purposes."
Mr. Obama: "George, the fact that you looked up Merriam's Dictionary, the definition of tax increase, indicates to me that you're stretching a little bit right now. . . ."
Mr. Stephanopoulos: "I wanted to check for myself. But your critics say it is a tax increase."
Mr. Obama: "My critics say everything is a tax increase. My critics say that I'm taking over every sector of the economy. You know that. Look, we can have a legitimate debate about whether or not we're going to have an individual mandate or not, but . . ."
Mr. Stephanopoulos: "But you reject that it's a tax increase?"
Mr. Obama: "I absolutely reject that notion."

[Obama's Nontax Tax]

Seriously, this guy’s on drugs. Or he’s a loony. Possibly both.

Obama's also taxing my patience.

And his credibility.

And the definition of the word 'tax.'

I wouldn't put it quite that simply, Quincy. It is possible to incur a debt for a government based service that was a choice on your part rather than imposed upon you, as in this case. OTOH, there is rarely a good case for the government to do that kind of stuff as opposed to private enterprise, as seen in our host's business.

When people with the ultimate authority to imprison me or even kill me come demanding money for a service I did not request nor want, that is a tax. You cannot weasel out of this, Mr. President. You are going to tax healthy young people who no health care beyond catstrophic coverage.

http://www.amazon.com/Parliament-Whores-Humorist-Attempts-Government/dp/0802139701/ref=sr_1_1?ie=UTF8&s=books&qid=1253601226&sr=8-1-spell#reader

Call it a tax, or don't call it a tax, it doesn't matter.

If we are going to force insurance companies to ignore pre-existing conditions, then you have to force people to get insurance. Otherwise, you have the classic free-rider problem, where nobody will get insurance until they get sick.

From a purely libertarian standpoint, you can argue that the government shouldn't be "forcing" either party to do anything. But that will leave us where we are now, where would-be entrepreneurs with health issues don't go out on their own, for fear of losing insurance coverage, and people with bad genes (i.e. predisposition for cancer) face bankruptcy.

Perhaps a better way to address this problem would be to say that insurance companies only have to ignore pre-existing conditions for people switching insurance (and therefore not the free-riders). But from a libertarian standpoint, you would still be "forcing" the insurance companies to take on the previously insured. And, regardless of how much information you provide them, young adults are unlikely to properly weigh the value of some long-in-the-future insurability issue vs. saving money now by not buying insurance.

So, given the largely (but not completely) random allocation of health risks, it seems to me that a trade-off where insurance companies have to take you, and you have to have insurance, is reasonable. Rather than fight that trade-off, libertarian/conservatives should fight to ensure that people are free to choose a minimalist coverage plan.

Sure it's a tax -- a tax to fund a giant public/private insurance pool to force young/healthy to overpay and allow old/sick to underpay. The politics and language of this part of the debate are pretty familiar to everyone who is paying attention, and Obama can wink/nod himself through these arguments while pretending to be appalled. Because for the majority of people who need insurance, the ability to coerce the young to help pay for their healthcare is a feature of the program.

The way to counter this is to look at the likely end result of a mandate -- Consumers will be another step further removed from paying the actual cost of their medical care.

If a mandate passes, insurance companies will be in a race to attract young/healthy policyholders and overcharge them. While alienating and driving away everyone else.

I used to work for a car insurance company that would "show you the rates of competitors" when quoting potential customers on the website. The rating software had discovered that drivers with a clean record except for one DUI were statistically no more of a risk than drivers with a totally clean record. While every other insurance company would be quoting those people $2,000 a half, what did we do? Well, the rating software would come up with something like $600/half. But that wasn't the price they were offered. No, on the website they'd see three $2,000 quotes from competitors and an $1,800 quote from us. And the customer would happily accept. And the company would pocket huge profits on these customers.

Conversely, when a high-risk potential customer applied for a policy, our software would quote them an artificially high price that was more expensive than the actual risk they represented. While displaying the far more reasonable prices of our competitors.

This wasn't all necessarily bad for the consumer and I don't condemn an insurance company for doing this either. Depending on the regulations of a given state, this type of approach wasn't always feasible. And because auto policies are short and non-binding, most state markets are competitve for the consumer who shops around. The key is how many options a consumer has. If there are 100 auto insurance companies offering policies it is far more likely a consumer will pay a price that represents their actual risk.

I say this because companies will do everything they can to insure the most profitable customers. If there is a mandate, that incentive doesn't change.

You can look it up. The individual mandate is in Title IV of HR 3200. It amends the Internal Revenue Code of 1986 by adding a new Part VIII ... Health Care Related Taxes. Here's a sample:

"SEC. 59B. TAX ON INDIVIDUALS WITHOUT ACCEPTABLE HEALTH CARE COVERAGE
(a) Tax Imposed- In the case of any individual who does not meet the requirements of subsection (d) at any time during the taxable year, there is hereby imposed a tax equal to 2.5 percent of the excess of -- (1) the taxpayer's modified adjusted gross income for the taxable year, over `2) the amount of gross income specified in section 6012(a)(1) with respect to the taxpayer."

This isn't even a flat rate fine, as it varies based on your income. It'd be enforced by the IRS.

The Senate mark-up of "America’s Healthy Future Act of 2009" has the following:

"Excise Tax. The consequence for not maintaining insurance would be an excise tax. ....
"The excise tax would be assessed through the tax code and applied as an additional amount of Federal tax owed.

But it's not a tax, if Obama says it's not. As Richard Pryor would say, "who are you going to believe, me or your lying eyes."

It would be a breath of fresh air if we could simply call a tax, a tax. Then we could focus on the real issue, the cost of the proposed programs. The next step is to determine through constructive debate, if that is what the citizens, want to spend their dollars on.

With each side spinning words, ideas, and telling half the story the process leads to mistrust.

For example, citing insurance premium increases as the problem. Trying to infer that it is the insurance companies that are the root cause of the increases rather than the price - one third of the annual increase- and utilization - two thirds of the annual increase.

Prices are going up 3-5% annually, utilization 6-10% annually. Utilization is a result of people, for example, living longer and medicine finding solutions or treatments for more diseases.

http://www.ilovebenefits.wordpress.com

My favorite part was when the president referred to the government as the responsible parent, and the general public as foolish, disobedient children. In that context, a lot of things make sense.

how does this work elsewhere? - Morganovich

In Connecticut, Pre-existing conditions are not covered for the first 12 months of new coverage. After that exclusion period, pre-existing conditions are fully covered. A pre-existing condition is a specific condition for which you sought treatment within six months prior to the start of the new health insurance policy.

Well, since the President referred to the public as "foolish, disobedient children," I will live up to his statement and just not pay my taxes. That should be expected of disobedient children.
I have already notified the IRS various times, and even went to their office and told them to put me in jail because I refuse to ever pay them another cent again. Seems like the jails are full, because I am still free, writing on this blog.

Thanks Charlie B, but my understanding of community rating is that insurance companies would still be able to adjust premiums for things like age and gender, but wouldn't be able to rate based on pre-existing conditions, family-history, etc.

Obviously, though, it is up to the actual legislation to spell that out in more detail. I know in auto insurance it varies by state what insurance companies may rate on. My assumption is that insurance companies will still be able to rate on _some_ criteria that varies person to person. But maybe I am wrong on that.