Hypothetical Mean

Commentary from an Actuarial and Economic Perspective

The Senate Healthcare Bill

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No links here, just a few comments while my kids pound my computer and yank my arms.

Relative to my predictions yesterday, this is a much more workable bill, from an insurance perspective, than I was expecting.

I was expecting the unpopular individual mandate to get watered down; it got strengthened.  There are still real adverse selection problems in 2014 and 2015, and I don’t know why the CBO models aren’t picking that up.  By 2016, however, the addition of the House’s tax as a percentage of income should have real bite, potentially forcing higher income individuals to purchase qualified insurance, rather than just self-insuring.  Call this the Britney Spears amendment (although Britney herself is not a good insurance risk, many wealthier people are).  This additional tax makes the CBO estimates more reasonable.

Many unfortunate pieces survive: the unworkable CLASS Act; the new benefit design restrictions; etc.

It is also unfortunate that we are going to raise the Medicare tax this much and not dedicate those revenues toward reducing deficits.  Because these heavier taxes aren’t indexed, my sons will face doubled Medicare tax rates, assuming they earn at least a modest middle-class income lifestyle.

If this thing passes conference, I’ll be doing an in-depth bill analysis series throughout 2010.


Written by Victor

December 19, 2009 at 11:17 pm

Posted in Healthcare Reform

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