Public Option May Still Be Included in Senate Bill

From Fox News: (emphasis added)

Senior Senate Democrats at work with White House officials on health care legislation are strongly considering a requirement for the federal government to sell insurance in direct competition with private industry, officials said Thursday, with individual states permitted to drop out of the system.

Liberals in Congress long have viewed such an approach, called a public option, as an essential ingredient of the effort to overhaul the nation’s health care system, and President Barack Obama has said frequently he favors it. But he has also made clear it is not essential to the legislation he seeks, a gesture to Democratic moderates who have opposed it.

This is entirely about a public “option” whereby the government directly provides health insurance in some capacity. Obama’s long-term vision for the eventual establishment of a single-payer system is predicated on the destruction of the private insurance industry. This can happen rather quickly once a public health insurance plan is in place.

The President has claimed that government-run health insurance could be financed through taxes on employer-based health care benefits. But more devastating is the fact that the vast majority of Americans face drastic tax increases on the premiums they buy directly from insurers. Dick Morris expounds on the Baucus bill:

The Baucus healthcare bill provides for a tax on “gold-plated” health insurance policies. But, as with the Alternative Minimum Tax, once slated to be imposed only on the wealthy, inflation will make most Americans liable to pay the 40 percent tax in a few years.

The tax applies to all individual policies with premiums above $8,750 and families of four whose premiums exceed $23,000. But the Congressional Budget Office estimates that the average health insurance premium for families of four will reach $25,000 by 2018. The average premium should pass the thresholds in Baucus’s bill by 2016.

So, a few years after the bill takes effect in 2013, the health insurance premium tax will become virtually universal. And this tax is to be a 40 percent levy. So, in six years, the average family health insurance policy, now projected to cost $25,000, will, in fact, cost $35,000 due to the Obama-Baucus tax.

Steep taxes on premiums will be devastating to the private insurance industry. Not only will Americans be unable to afford such ridiculous costs for health insurance, the public option provides some serious temptation for millions of Americans to simply drop their coverage as they will know they can always join the government plan should they become sick.

Even more insidious are the forthcoming requirements that private insurers must accept all applicants, regardless of pre-existing conditions just like the government plan. Again, countless people are bound to simply wait to buy health insurance until they genuinely need it. After all, it will be far less expensive to simply pay the penalty for non-compliance than to pay what will be substantially higher premiums and the added taxes. Thus the private insurance companies will face the same payouts, but will take in far fewer premiums. They will clearly fail.

It does not appear the public option will be included in the current wave of “reform”, but I strongly fear we will end up with “triggers” that set a government-run system in motion if the private insurance companies do not meet certain benchmarks. If insurers are forced to take on pre-existing conditions, then it will only be a matter of time before the triggers are pulled.

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