Wednesday, October 14, 2009

The Baucus bill, or "How government action makes bad things worse"

One of my favorite demotivator posters -- the cynical, pessimistic posters that mock motivational posters -- is the one for meetings. It's a picture of a bunch of hands put into a circle (sort of like what you'd do before a sports game), with a phrase below it that says, "None of us is as dumb as all of us."

I can't think of a more perfect description of most government planning: all of the bad ideas, few of the good ones.

That's the situation with Max Baucus's health care bill. He tries to split the difference between socialist-style bills like the ones in the House and bills put forth by the GOP. The result is a potential clusterf*ck of epic proportions. It would lead to the end of private insurance by 2025.

The House bill was terrible, but it was a bit more intellectually consistent. It required insurers to take everyone, regardless of health status, but it also required everyone to guy insurance or face stiff penalties of $1,500 per adult in the first year. With everyone in the system, the healthy would subsidize the unhealthy. Insurers weren't happy with having to take everyone, but they accepted the deal because everyone would have to buy their products.

Many people -- inside and outside Congress -- didn't like the idea of a hard mandate, though, so in his bill Senator Max Baucus, chair of the powerful Senate Finance Committee, ratcheted down the penalties for not buying insurance to $400 after 8 years. That's a huge difference. It also sets the stage for the kind of massive problems Massachusetts is having with their "leaky" mandate.

People over at Harvard Pilgrim Health Plan have said that people are gaming the system like crazy. They face a $900 fine for not buying insurance, but they can buy -- and cancel -- policies whenever they want. Usually, in the individual market, folks have to wait at least 6 months to get coverage for big-ticket items like pregnancy or cancer treatment to make sure that people can't just buy coverage when they need it and then drop it.

In Massachusetts, though, insurers have found that people buy coverage for less than 5 months on average, and cost the system 600% more than they would otherwise. That kind of situation is simply unsustainable. After too long, insurers will have to shut their doors; they simply won't be able to stay in business.

That's bad enough for one state. Senator Baucus wants to bring that scenario to the whole country, though. Besides driving insurers out of business, it would jack up the taxes that we pay to massive levels, and jack up the out-of-pocket expenses we'd pay on health care to 3 or 4 times what we currently pay in just 12 years.

The response from the Left has been pretty uninspiring (though quite revealing). They haven't denied that this would be the case. They've just claimed that it won't be such a big deal.

But it will be a big deal. A very big deal, indeed. God help us if this horrible bill becomes law.

No comments: