Monday, March 22, 2010

The Penalty for Freedom from ObamaCare

Under the new bill, most Americans without insurance would face an annual penalty, starting in 2014 at $95 – the same as in the Senate bill. But in following years, the penalties in the reconciliation bill are slightly different. Those without insurance in 2016, for example, would pay the greater of two alternatives: a flat fee of $695, down from the Senate’s $750, or 2.5 percent of their income, up from 2 percent in the Senate bill, reports Kaiser Health News.

In reality, the penalties for freedom will climb and climb.


  1. Therefore, a healthy 25 year old will have the "choice" of paying $695 or, say $500 a month for an insurance policy (the bill also mandates the kind of policy he would be forced to buy). I rather suspect a lot of people in that position will opt to pay the cheaper penalty and keep going without insurance. Since insurance companies will now be forbidden to deny coverage to those with pre-existing conditions, such an individual could wait until being diagnosed with an illness, and then apply for coverage. Of course, this completely destroys the concept of insurance, but such are the unintended consequences of this legislation.

  2. As an Actuary, this is the fatal flaw of the Obama bill. Why will anyone sign up for a $6,000 personal insurance product when not signing up costs them $95, and they are guaranteed issue whenever they get sick. Beyond vehicle accidents, which are usually covered by car insurance, few illnesses strike someone so fast that they can't wait to sign up for insurance. Oh, I have cancer, let me sign up for insurance now. Oh, I have MS, I have HIV, I'm pregnant, let me sign up now that I know. Premiums will soar, and only the sick, the very risk averse or high income people will sign up for insurance. It's awful.

  3. While I sympathize with Mr. Kaster, destroying the concept of insurance is not an "unintended consequence." It is exactly what the politicians intended. Mr. Shelley's "fatal flaw" is in fact the vital element that proves this legislations strenth. It will eventually make all of us dependent on government subsidies...we will be forced to have "some skin in the game" and this wil prevent its reversal. More and more we will all become slaves to the system. Welcome to the "Brave New World." DON'T VOTE IT ONLY ENCOURAGES THEM