That’s what we’ll have if the individual mandate/pre-existing condition provisions of the Senate Finance bill become law. More Unintended Consequences. Here is the deal:
1. 27 million people currently purchase health insurance directly on their own.
2. The vast majority of these policies are issued subject to medical underwriting, where the applicant attests to being relatively healthy and without serious ongoing medical conditions.
3. As a result of these provisions, these individual policies are almost always cheaper than COBRA or employer sponsored plans which do not include medical underwriting.
4. The banning of medical underwriting, as addressed in every proposal on the table, means that individuals with serious ongoing conditions will be included in the same pricing pool as the relatively healthy people who currently purchase individual policies.
Guess what will happen to the average premium for these 27 million people? It will go throught the roof!! What will these 27 million Americans—nearly 10% of our population–think about of health reform????
The only way to mitigate this effect is with a strong individual mandate, whereby all Americans are required to have health coverage or pay a stiff tax penalty. This will increase the pool of people purchasing individual policies by as much as 10 million people, enough to offset the hiogher cost to cover the seriously ill and unhealthy.
Unfortunately, it will never happen this was as the Senate version is written, since the $750 penalty included in the Senate bill will be less than the monthly for most Family coverage policies. Not much of a “mandate”, not much of an incentive to follow the law.
The unintendended consequence: 27 million REALLY unhappy Americans, many of who consciously choose to live a healthy lifestyle and enjoy lower healthcare expenses as a result. Not good policy at all…
