View Full Version : Legal Health Care Questions

La literatura
06-28-2012, 10:26 PM
I think we could have a non-partisan thread devoted not to John Roberts or the ruling itself, but to Obamacare, now that it has been upheld as a valid power of Congress.

Q: What if I still don't purchase health insurance?

A: The entire point of the mandate is to provide an incentive for people who can purchase health insurance to do so. Not because the fine will be more expensive than purchasing insurance (it won't be), but because you will get fined and still not have health insurance (having health insurance is a good thing to have because it protects your assets if you get in bad medical situation). If you don't cover yourself, and you don't have an excuse (i.e., you're poor or you're old), then the IRS will issue you a fine. In fact, Congress expects that around 4 million people will pay the fine rather than purchase health insurance. If you don't pay the fine, the IRS won't send you to prison or put a lien on your property (the law forbids it). Instead, the IRS will probably sue you and fine you on top of that, perhaps doubling the amount. As alnorth points out, this would most likely be taken out of your IRS tax refund. Not expecting a tax refund, or a small one? Then it might not necessarily be an unwise financial decision to not pay the penalty.

Q: How much will my premium increase?

A: I don't know. I've heard somewhere that in general, many current purchasers can expect a 19%-30% increase. Perhaps someone who knows more about insurance can answer.

Q: What will the State Health Exchange be like?

A: I don't know, but I want to know.

06-28-2012, 10:32 PM
Regarding your first answer, the IRS isn't going to have much of a problem getting their money from most people, because most people get really big refunds. People whose incomes are too low to file are generally going to be exempt from having to pay the fine anyway, so there's nothing there. Sure, you can monkey around with your withholdings, but few people do that. The IRS will take their fine out of your refund, or from social security years down the road (plus interest and penalties) if need be.

Your 2nd answer is completely speculative. People are predicting massive increase, healthy decreases, and everything else in between. It all really depends on how effective the mandate is in compelling young healthy people to buy insurance.

06-28-2012, 10:45 PM

from their calculations, it may cost me around $4k to be insured, or pay a fine of around $800 at the 2016 max rate

06-28-2012, 10:55 PM
alnorth --

The insurance companies can't deny you coverage due to pre-existing conditions, but how finely will insurers be able to slice and dice the premium levels in the market?

Can they set different premium levels by age?

within age by smoking vs. non-smoking?

within age by weight or other heath conditions or family history?

In other words, will they be able to offer good rates to young healthy low risk people while charging higher rates for high risk people, similar to the way the life insurance rates work now?

06-28-2012, 11:15 PM
First, these are all for the policies offered on the insurance exchange, not for group plans by private employers, though they have their own regulations.

The overall Medical Loss Ratio for large insurance companies must be 85%. For smaller companies, they get a bit of a break until they get big enough to reliably price their product. So, for those claiming that evil insurance companies are going to max their profit out with all these customers who have to buy their product, there are price controls. However, that 85% number is a target for all plans and policies combined, not for each individual plan or segment.

Regarding price segmentation:

By Age: The gap for oldest can be up 3 times more than youngest

Smoking: Up to a 50% surcharge is allowed

After that though, I don't believe they can charge different rates by weight or gender. I imagine its easier for politicians to vote to punish smokers than anyone else.