SEARCH BLOG: HEALTH CARE
Opt out or cop out?
So, let's get this straight... if you are poor and the target of the "insurance reform" legislation, you can't opt out because the government covers you. If you are not poor, but don't want to pay for the insurance, you are covered in emergencies or by other programs, you can opt out and the funds the government was counting on to pay for covering the poor will diminish... so taxes would have to be raised.
The rationale for the [health care insurance] mandate is that it is necessary to carry out the other reforms of insurance that the public overwhelmingly approves -- in particular, ending pre-existing-condition exclusions by insurance companies. If legislation banned those exclusions without a mandate, healthy people would rationally refuse to buy coverage until they got sick, and the entire insurance system would break down. The mandate is designed to deter people from opportunistically dipping into the insurance funds when they are sick and refusing to contribute when they are healthy.
But Congress could address this problem more directly. The law could give people a right to opt out of the mandate if they signed a form agreeing that they could not opt in for the following five years. In other words, instead of paying a fine, they would forgo a potential benefit. For five years they would become ineligible for federal subsidies for health insurance and, if they did buy coverage, no insurer would have to cover a pre-existing condition of theirs.
The idea for this opt-out comes from an analogous provision in Germany, which has a small sector of private insurance in addition to a much larger state insurance system. Only some Germans are eligible to opt for private insurance, but if they make that choice, the law prevents them from getting back at will into the public system. That deters opportunistic switches in and out of the public funds, and it helps to prevent the private insurers from cherry-picking healthy people and driving up insurance costs in the public sector.
In the United States, an opt-out would not apply to anyone whose income was close enough to the poverty level to qualify for Medicaid. It would be available on a new income-tax form on which people with incomes above that threshold could choose between paying a fine for failing to insure or taking the five-year opt-out. (Taking the opt-out would not affect eligibility for veterans' health care, Medicare, emergency care, or any program entirely funded by a state or out of charitable donations.)
Sounds like creative the creative accounting used in the new legislation that takes $500 billion from Medicare and makes Medicare solvent.