Tuesday, November 01, 2016

Speak Softly and Carry a Big Stick

Elimination. This is what government is about when it comes to dealing with competition. The latest example comes via a new rule for Obamacare. If government speaks quietly enough you won't notice when they try and slip a fast one by you. If you do notice, they have that big stick ready to go so when competition doesn't fall in line they can smack the crap out of the competition with it.

That is what HHS did today when they issued a proposed new rule on short term medical insurance plans. The rule revises the definition of a short-term plan and will limit these plans to only three months and not be renewable.

On the surface this isn't a big deal to consumers. Primarily because short-term medical plans were never actually renewable. They are medically underwritten and don't meet the criteria of being Obamacare compliant. So when the policy ends it must be medically underwritten again before being issued. And, because they aren't Obamacare compliant people who purchase these plans are also subject to the individual mandate tax.

Therein lies the government's problem. Because these plans aren't compliant and include medical underwriting they are much less expensive than the Obamacare plans one is being coerced to buy through the marketplace. In some cases they are so much cheaper that a healthy person can pay the premiums plus the tax and it's still financially better for them than buying an Obamacare plan.

This leads us to the real reason government wants these plans gone. They see the death spiral of the individual market accelerating. Costs of insurance are exploding - including those cheap high deductible Bronze plans. Logically the only way government knows how to try and reverse this course is to force the healthy into the pool. By eliminating short-term plans and forcing consumers to the marketplace they believe they will strengthen the Obamacare risk pool.

Obamacare is a crap sandwich. Right now there are other sandwiches out there. Among them are limited benefit plan sandwiches, Christian Ministry sandwiches, and short-term medical sandwiches. One by one the government will eliminate your choices of sandwiches. Pretty soon all you will have left is the crap sandwich - and once you take a bite you'll find that it will leave a bad taste in your mouth.
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