Thursday, September 06, 2007

Arnold Care

Imagine if people were able to game the Social Security system, never paying in a single dime, but able to jump in right before retirement and pick up checks. That would be unfair. The costs for those Americans who responsibly pay their fair share would increase because they would be subsidizing those who don't. Eventually, the system would collapse.

Everyone paying their fair share. Socialists like to use that phrase.

Fortunately, the system protects all of us by requiring nearly everyone to participate in Social Security. As a result, every American has a secure pension for their retirement, regardless of how much they earned in their career.

Secure pension.

I suppose . . .

But there is a catch.

You have to pay in while you work. You must live until age 65 (otherwise you "forfeit" your benefits). The less you earn during your working years the higher your benefit (as a percent of your average earnings) when you start to collect. The more you earn the less benefit you receive. If you decide to earn money after you start collecting your "secure pension" you may be forced to accept less money. (In other words, high achievers are penalized). Apparently very few can actually get by on Social Security pensions . . . so they work at Wal-Mart in order to survive.

In California, Gov. Arnold Schwarzenegger has proposed the same model for a state health-care system. His plan obligates everyone to obtain health coverage, and makes that coverage available by requiring insurers to accept all comers even if they have been sick and couldn't obtain insurance before. Those who can't afford coverage would be subsidized.

Subsidized by . . .

The taxpayers of course.

So what about subsidies for folks on Social Security who can't afford to live?

In recent years, New Jersey, New York and Massachusetts all forced insurers to provide coverage to everyone without requiring full participation. In 2004, these states had the three highest average insurance premiums in the country. In New Jersey, the cost of a typical family plan soared to three times higher than the national average. In New York, numerous insurance companies faced huge losses and stopped offering health insurance policies, leaving countless uninsured. In Massachusetts, the number of uninsured almost doubled, though a recently passed law now requires every resident to obtain insurance unless it is unaffordable.

And this is supposed to be a good thing?

So when the states intervene and dictate the rules, it seems like everyone loses.

Did I miss something?
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