Daily News Updates - Health Insurance News

Elect Health Insurance, Pt.2 – Anyone not both young and healthy is stuck.

Previous...

By far, the most radical health insurance change comes from Mr. McCain. Mr. McCain seeks to “level the playing field” between shared-risk and individual-risk health insurance plans (that is – employee group plans vs. individual private health insurance). His method of doing this is to take away the tax-exempt status from employer-based plans and award a tax credit to employees that can be used for individual types of plans.

What becomes un-level by this effect, however, is the disadvantage placed on employers to continue offering health insurance benefits and the impact on consumers when they find themselves losing the extra $9,000 their employers had been paying toward their plan. McCain’s tax credit is only as much as $2,500/$5,000, depending if filing individually or jointly. Why would the employer lose interest in continuing to offer health benefits? The young and healthy individuals would be attracted by the low rates offered by the private health insurance companies and wooed away from the employer’s plan. After this, the employer’s rates would skyrocket because all the low-risk consumers has been lured away.

Only higher-risk individuals would remain and the health insurance provider would be losing money. After already paying $9,000 a year for a family plan, if the rate should double, the employer would either be stuck with paying $18,000 for each family plan or else have to take that loss out of the employees’ pay. Neither choice would be acceptable. So the company would cease to offer benefits any longer.

So the young and healthy would get a good deal (until they get older), while those not still young or healthy would be on their own, competing in the open market for whatever health insurance they could get.

Continued…
October News...