Advice on Health Care

I have been worried about what is going on with our health care.  We live in The United Sates of America.  We are free.  What the Democrats are trying to do goes against everything our country stands for.  The following article gives excellent advice for what to do IF this bill becomes a law (and pray that it doesn't!).


Health Care: Arbitrage Obama And The Dems


Yes, I mean it.

And yes, I've read the Health Bill. Both the 2,000+ page original and The House changes as voted upon.

Here's the bottom line:

•If you refuse to buy health insurance, you will be fined on a sliding scale that amounts to 2% of your AGI. So if you make $100,000 a year, you could be fined $2,000 for "refusing" to buy insurance.

•You cannot buy a catastrophic policy any more. The "cheapest" acceptable policy will cost somewhere around $15,000 for a single person, and over $20,000 for a family. This is, for most people, more than five times the maximum possible fine - each and every year. The law makes it effectively impossible to maintain an existing catastrophic policy as they "renew" every year, and should any change be made you are then forced to buy something "acceptable" in the law (or pay the fine.)

•When the "pre-existing condition" bar comes down you cannot be charged more or denied coverage due to pre-existing conditions.

•I fully expect 20-50% premium increases immediately, and for the next three years sequentially, in all existing policies. This is precisely what the banks did in front of the CARD act becoming effective, and it will happen here as well. That is the cause of the short-term rocket shot in the health-related stocks this morning.

•In addition the capital gains tax changes will do severe damage to capital formation immediately, and these changes will become especially severe starting in 2014. The market will anticipate these changes and react accordingly, although you certainly wouldn't know it today.

Ok, this one's easy.

When the fines and pre-existing coverage "stop-out" go into effect (now for kids, in a couple of years for the rest) drop all coverage for those affected.

Why?

Because:

•The fine is 1/5th or less the cost of the "insurance."

•For routine care, you now can negotiate for your care before it is provided. It will be cheaper to do so than to buy the insurance - for routine events. Don't try to tell me it's not either - I've been carrying a catastrophic-only policy now for more than a decade, and as a consequence I've negotiated these fees and costs for routine things and saved tens of thousands compared to simply "buying a full-boat policy." The only reason for me to carry the "catastrophe" policy - the possibility of being screwed if I developed a serious condition and thus got excluded - has just been erased by this law, effective in a couple of years.

•If you have a catastrophe of any form, buy the insurance at that point in time. You cannot be turned down or charged more.

Screw the government. They are the ones who set the standards - we simply have to live with them, and this is the only logical action to take given what they have just done.

Is there a risk in this strategy? Sure. You could have a "zero notice" catastrophe before you (or someone with a power of attorney) could buy a policy. So you have to be able to survive that sort of "short-term" event - but remember, you're going to be banking $10-20k per person during the time you're running "naked." So do exactly that - bank it for a year or two - so you have the ability to cover the instant expense from one of those "aw crap!" catastrophic circumstances. Fact is, they don't happen often and in a year or so you can have a very nice cushion against them.

Businesses will be dropping people like flies from business-covered "insurance"; there will be no reason for anyone as an employer to be providing this "benefit" into an environment where insurance prices will double - and probably double twice - in the next four years. If you think not, look at what was done to credit-card holders in front of the provisions of the CARD act going into effect.

This, by the way, will bankrupt the insurance companies in the end. Nobody will buy until they have HIV, Cancer or some other serious illness - then they will buy, and the companies will have to pay - with no lifetime caps or exclusions for pre-existing conditions.

The health care companies that are getting a rocket shot today in the stock market are being bought by fools.

If you have any belief whatsoever in the efficient market hypothesis this is exactly what people will do as the effective dates for these provisions approach, as it will save them ten thousand dollars a year or more - each. The insurance companies will instantaneously lose the "pool" of healthy people who buy against risk - rather, they will have a pool of all sick people who buy against known costs.

Forget it folks - this is the end of the health industry in America, and I will be looking for the recognition in the market (as expressed by technical analysis on the stocks in this sector) that the efficient market will come to the fore.

The intention of The Democrats (and liberals generally) in this legislation is clear and impossible to hide - they intend to completely destroy private health care in favor of a fully-government-run single-payer system. The efficient market guarantees this outcome given the law they passed, and they know it.