The cost of mandated insurance for gun owners

From Fox News:

In Illinois, the House rejected a measure 34-74 that would require people carrying concealed weapons to also carry $1 million in liability insurance. Chicago Democrat Kenneth Dunkin was behind the defeated bill. He said an insurance policy would cost between $500 to $2,000, but Illinois Republicans successfully argued the costs were too high for citizens exercising their constitutional right to carry a gun, and the bill was defeated. . . . .

Guess who is going to pay the highest insurance premiums: Poor people who live in high crime urban areas.  Meanwhile in Congress there is a push to mandate such insurance.

A New York Democratic lawmaker is behind a national push that would force gun owners to buy liability insurance or face a $10,000 fine.
The Firearm Risk Protection Act, pushed by Rep. Carolyn Maloney and seven co-sponsors, follows efforts at the state level to create the controversial new kind of insurance for gun owners.  . . . . 

Is the individual mandate tax in Obamacare unenforceable?

Could Obamacare actually increase the number of uninsured people? Suppose that you believe Obama's claims about ending free-riding by people on health care. Well, it turns out that Obamacare might really make them pay anything. John Merline has this at IBD:

But the uninsured problem under ObamaCare could be much worse than the CBO projects.

What the report doesn't cover is the fact that the other legs of the ObamaCare stool designed to expand insurance coverage — the individual mandate, the employer mandate and the state insurance exchanges — are also buckling.

As a result, ObamaCare will likely cover far fewer uninsured than advertised. There's even a chance that, if all goes wrong, it could actually make the uninsured problem worse.

The individual mandate, for example, is a cornerstone of ObamaCare's effort to expand coverage. But tax experts who've studied how the IRS will enforce the mandate conclude that it's likely to be ineffective, because the law makes it virtually impossible for the IRS to collect the tax penalty from those who don't pay it.

Under normal circumstances, the IRS has broad powers to collect taxes from those who don't pay what they owe. It can charge civil and criminal penalties, impose liens, and seize assets and bank accounts.

But ObamaCare specifically blocks the IRS from using these enforcement tools when it comes to collecting any unpaid ObamaCare tax penalties. . . .

Another Broken Obama Promise: Price of Health Insurance up 13.9% over last year

Health insurance costs have soared 8.2 times faster than inflation over the last year! From the BLS.

Another year of faster than promised increases in health insurance prices after Obamacare

Last year I had this post available here. This year we have this news:

The good news is that the cost of employer-sponsored health insurance is growing at a stable rate. The bad news is that the rate still exceeds inflation and worker wage increases, according to a survey from benefits consultant Towers Watson and the National Business Group on Health.
The annual cost of health coverage will rise nearly 6 percent to an average of $11,664 per employee in 2012, said the survey, which was released Thursday. The employee portion of that bill — or what comes out of worker paychecks — will climb, on average, 9.3 percent to $2,764. . . .

Cost of government risk insurance double what was previously estimated

Only a fraction of the people who were supposed to sign up for this program have done so (see here). The government has gone all out to try to convince more people to sign on to it. But the costs for those who have turned out to be wildly higher that the Obama administration had estimated. From the Washington Post:

The health-care law set aside $5 billion for a Pre-Existing Condition Insurance Plan, meant to provide health insurance to those who had been declined coverage by private carriers. Since its launch last summer, nearly 50,000 Americans have enrolled in the program.

The PCIP program will phase out in 2014, when insurers will be required to accept all applicants regardless of their health-care status.

Those who have enrolled in the program are projected to have significantly higher medical costs than the government initially expected. Each participant is expected to average $28,994 in medical costs in 2012, according to the report, more than double what government-contracted actuaries predicted in November 2010. Then, the analysts expected that the program would cost $13,026 per enrollee.

The costs also are significantly higher than those of similar high-risk pools that many states have operated for decades. States spent an average of $12,471 on enrollees in 2008, according to the National Association of State Comprehensive Health Insurance Plans.

The Obama administration has spent $600 million of its $5 billion budget for the program over the past 18 months. . . .

So much for the Obama administration claim that mandating abortion and contraception coverage would lower insurance costs

Obviously it is right that people will pay for these benefits one way or the other. From The Hill Newspaper

:

The insurance industry is concerned it will take a hit from the Obama administration’s mandate that they provide birth control in health plans for employees of religious organizations that object to the coverage.

Publicly, the health insurance industry has avoided getting involved in the fight.

But in private, the industry is dubious of the administration’s argument that the insurance industry wouldn't take a hit because birth control is cheaper than unwanted pregnancies.
The trade group America's Health Insurance Plans has limited its comments to saying it worries about the "precedent" the mandate would set. The concern is that the government could eventually require health plans to cover any number of preventive services – even prescription drugs - without copays or deductibles, under the theory that they save money in the long-term.

Privately, however, insurers say there's nothing "free" about preventing unwarranted pregnancies. They say the mandate also covers costly surgical sterilization procedures, and that in any case even the pill has up-front costs.

"Saying it's revenue-neutral doesn't mean it's free and that you're not paying for it," an industry source told The Hill. . . .

Should a baby conceived after a father's death be given Social Security survivor benefits?

While this is a cute baby, it seems very clear to me that a child shouldn't be eligible for Social Security benefits if it is conceived of after the parent's death. The point of insurance is to protect one against unforeseen events. You conceive the child and then have the parent die unexpectedly. In that case, it makes sense to get insurance. But having the baby after the child is born is not the same.

Melissa Amen conceived her 3-year-old daughter, Kayah, seven days after Kayah's father died of cancer.
"It's my miracle," the 28-year-old Nebraska resident told FoxNews.com. Melissa and her husband, Joshua, struggled for two years to have a child before she conceived through intrauterine insemination. Joshua had stored his sperm in a bank in case treatments for his cancer rendered him sterile. They were planning to raise a family together despite his three-year battle with cancer.
Now Amen faces her own battle: Winning Social Security benefits for Kayah from a federal government that, in essence, doesn't recognize Joshua as the father.
The Social Security Administration denied Melissa's application seeking survivor benefits for Kayah because she was conceived after the death of her father.
"I was so frustrated. I didn't know what to do," Amen said. "I knew I had to fight for her benefits." . . .

Appearing on Thom Hartmann Show from 12:05 to 12:15 PM Today

I will be on the Thom Hartmann show today at noon to discuss my piece from Friday on insurance companies.

John Stossel on the supposed Monopoly Power of Insurance companies

My son Maxim was involved with this segment. I wish that they had gotten some more into how many companies provide the self-insurance.

New Fox News piece: Demonizing the Insurance Industry Is Not the Answer

My newest piece with Scott Harrington starts off this way:

In a last ditch effort to cram their health care reform package through Congress, Democrats have ramped up their demonization of private health insurers. They blame an alleged lack of competition in health insurance for all sorts of ills – from higher premiums to insurers denying coverage based on pre-existing conditions or dropping people who get sick.

According to the White House blog last week: "the insurers’ monopoly is so strong that they can continue to jack up rates as much as they like." In The New York Times on Friday, Paul Krugman attacks what he calls the "vileness" of profit driven insurance companies. These arguments are echoed in Congress. In an ostensible effort to promote competition, the House recently passed legislation to exclude health insurance from the partial anti-trust exemption for the “business of insurance.” The 39 percent premium increase by Anthem Blue Cross for its individual (non-group) policyholders in California is continually touted as evidence of this monopoly power.

But what are the facts of this alleged monopoly power? Despite claims that it produces huge profits, health insurers’ profits generally average 3-5 percent of premiums. During the first nine months of 2009, profit margins were just 2.4 percent. . . .

Warren Buffett says to start over on health care, but the Obama proposal does even less of what he wants done to control costs

Of course, Obama's proposal revealed last week provides even less to do with reducing costs (e.g., putting off the tax on high quality insurance until 2018). From Politico:

Billionaire investor Warren Buffett advised President Barack Obama on Monday to scrap the health care bill and start over.

In an interview with CNBC, Buffett said the current bill does not focus on controlling costs, which he sees as the central problem that must be addressed to reform the system. He added that while he does not like the Senate bill, he’d vote for it in preference to doing nothing. . . . .

But while Buffett, the chairman and CEO of Berkshire Hathaway, applauded Obama for taking up the reform effort, he said that “unfortunately, we came up with a bill that really doesn't attack the cost situation that much.”

Asked if he would be in favor of scrapping the Senate health care bill, Buffett responded: “I would be.”

If the president were to start over, Buffett would advise him to “just show this chart of what's been happening and say this is the tapeworm that's eating at American competitiveness. And I would say that one way or another, we're going to attack costs, costs, costs, just like they talk about jobs, jobs, jobs.” . . .

How far can Democrats distort the commerce clause?: The question for the health insurance bill

This discussion in the WSJ puts the point very simply.

Last week, the Texas attorney general, Republican Greg Abbott, wrote that a federal mandate to carry health insurance "threatens individual liberty." Florida Attorney General Bill McCollum, a Republican running for governor, held a press conference in December to make the same point.

Democrats dismiss the Republican arguments as a last-ditch effort by the minority party to block the majority's will. They say the plan is grounded in basic powers the Constitution grants Congress: to regulate interstate commerce, collect taxes and "provide for the general Welfare."

Since the New Deal era, the Supreme Court has broadly interpreted congressional authority under the Commerce Clause. Congress has successfully invoked that power to limit the amount of wheat farmers can grow, ban racial discrimination at restaurants and prosecute medical patients for raising marijuana to alleviate their symptoms.

But the court has never considered a federal program structured like the health overhaul, which would require people without insurance to buy it or face a tax or penalty. The nonpartisan Congressional Research Service said in July that it was a "challenging question" whether the commerce power extends that far.

Democrats and their allies say that despite its novelty, the insurance mandate falls within the definition of interstate commerce. The Senate bill cites data to show the importance of the health-care industry to the national economy and the damage caused by leaving millions of Americans uninsured.

Requiring the uninsured to buy coverage will "create economies of scale" and "is essential to creating effective health-insurance markets," the bill says.

Republicans argue that while Congress can regulate economic activity, the failure to buy insurance amounts to inactivity -- and the Constitution doesn't give Congress power to regulate that.

"Anything we have ever done, somebody actually had to have an action before we could tax or regulate it," Mr. Ensign said on the Senate floor. . . .

The view of the health care bill from the insurance industry

I have written here that I thought that the "public option" was largely besides the point. Politico has this:

Love how the rhetoric [h]as been that insurers have won.

The last time I checked we didn't get an 80 billion "deal" in exchange for removing our biggest legislative issue.

In fact, while the govt run plan has been removed which is a win for taxpayers and for health plans, the fact is this bill is far from a "give away" to insurers. For instance:

1) The premium tax is now 10 billion more and will adversely impact people who are buying plans. As cbo has said this tax will be passed on but guess who will get blamed — health plans. Further it is not tax deductible meaning that some plans could have an effective tax rate above 100 percent.

2) Mandatory [medical loss ratio] — this is going to kill health insurers selling insurance in the individual market. By setting this standard and implementing it so quickly these plans will essentially be forced into jacking rates up or going out of business. And frankly this will undermine a lot of the good things that health plans do — disease management, care coordination and anti-fraud detection (which I imagine with taxpayer subsidies going to health plans is something the govt will want plans to focus on).

3) Other issues — there are a whole host of other new regs that will go into effect almost immediately making it virtually certain that existing contracts will have to be opened up and rates revisited.

4) Mandate — while the mandate has gotten a little stronger, it still won't be enough to materially effect the insurance take up rate thus causing everyone's rates to go up.

Democrats have been smart to set up many of these issues so that health plans take the fall for the disruption and costs increases that will occur.

Frankly while the media is focused on the govt run plan as a "win" for the industry this misses a whole host of other issues that directly increase regulations on insurers and make it harder to serve the individuals, families and employers who rely on insurers for coverage.

Health insurance industry profits are actually pretty low

Even the Associated Press asked this question:

Quick quiz: What do these enterprises have in common? Farm and construction machinery, Tupperware, the railroads, Hershey sweets, Yum food brands and Yahoo? Answer: They're all more profitable than the health insurance industry. In the health care debate, Democrats and their allies have gone after insurance companies as rapacious profiteers making "immoral" and "obscene" returns while "the bodies pile up."
Ledgers tell a different reality. Health insurance profit margins typically run about 6 percent, give or take a point or two. That's anemic compared with other forms of insurance and a broad array of industries, even some beleaguered ones.
Profits barely exceeded 2 percent of revenues in the latest annual measure. This partly explains why the credit ratings of some of the largest insurers were downgraded to negative from stable heading into this year, as investors were warned of a stagnant if not shrinking market for private plans.
Insurers are an expedient target for leaders who want a government-run plan in the marketplace. Such a public option would force private insurers to trim profits and restrain premiums to compete, the argument goes. This would "keep insurance companies honest," says President Barack Obama. . . . .

Obama administration continuing to use false numbers about how concentrated the insurance industry is

For an explanation why the claims in the middle of this clip about how concentrated the insurance industry is are wrong, please see this.

President inaccurately claims that insurance companies have dropped people's coverage

The inaccuracies here that Scott Harrington points to are pretty breathtaking.

"More and more Americans pay their premiums, only to discover that their insurance company has dropped their coverage when they get sick, or won't pay the full cost of care. It happens every day."

Clearly, this should never happen to anyone who is in good standing with his insurance company and has abided by the terms of the policy. But the president's examples of people "dropped" by their insurance companies involve the rescission of policies based on misrepresentation or concealment of information in applications for coverage. Private health insurance cannot function if people buy insurance only after they become seriously ill, or if they knowingly conceal health conditions that might affect their policy. . . .

To highlight abusive practices, Mr. Obama referred to an Illinois man who "lost his coverage in the middle of chemotherapy because his insurer found he hadn't reported gallstones that he didn't even know about." The president continued: "They delayed his treatment, and he died because of it."

Although the president has used this example previously, his conclusion is contradicted by the transcript of a June 16 hearing on industry practices before the Subcommittee of Oversight and Investigation of the House Committee on Energy and Commerce. The deceased's sister testified that the insurer reinstated her brother's coverage following intervention by the Illinois Attorney General's Office. She testified that her brother received a prescribed stem-cell transplant within the desired three- to four-week "window of opportunity" from "one of the most renowned doctors in the whole world on the specific routine," that the procedure "was extremely successful," and that "it extended his life nearly three and a half years."

The president's second example was a Texas woman "about to get a double mastectomy when her insurance company canceled her policy because she forgot to declare a case of acne." He said that "By the time she had her insurance reinstated, her breast cancer more than doubled in size."

The woman's testimony at the June 16 hearing confirms that her surgery was delayed several months. It also suggests that the dermatologist's chart may have described her skin condition as precancerous, that the insurer also took issue with an apparent failure to disclose an earlier problem with an irregular heartbeat, and that she knowingly underreported her weight on the application.

These two cases are presumably among the most egregious identified by Congressional staffers' analysis of 116,000 pages of documents from three large health insurers, which identified a total of about 20,000 rescissions from millions of policies issued by the insurers over a five-year period. Company representatives testified that less than one half of one percent of policies were rescinded (less than 0.1% for one of the companies). . . .

A related story on this can be found here.

Baucus writes up his health bill proposal

Baucus' bill is going to be a real mess for the insurance industry.

one feature that might help satisfy the more liberal members of the committee is that insurance companies could face a separate new fee to help pay for the plan. It would be determined based on market share, and could raise $6 billion a year starting in 2010, the sources said. . . .

And taxing private insurance will increase insurance coverage?

the Baucus plan would create transparency measures that make it easier for consumers to compare information and pricing, and require insurers to release details on their administrative costs. “If insurance companies pass this fee along to customers, they run the risk of losing out in a newly competitive environment,” according to a source familiar with the plan. . . .

Could someone please explain the reasoning here? Taxes can't get passed on to customers because of the "newly competitive environment"? If the demand curve is perfectly elastic, that would happen, but does this seem at all plausible?

It would also create a health insurance exchange, prohibit insurers from denying coverage to people with pre-existing conditions . . . .

If insurance is not mandatory for everyone, this will eliminate insurance. If insurance is mandatory, this will eliminate anything above the minimum level of insurance.

"change the health care delivery system by rewarding doctors for quality of care rather than the quantity of services. . . . "

If this is such a great idea, why don't insurance companies offer it?

Obama admitting that he wants to get rid of private insurance

UPDATE: The White House responds claiming that the quotes are misleading, but refuses to say in what way they are misleading.

"because he is talking to the American people so much there are people out there with a computer and a lot of free time and they take a phrase here and there and they simple cherry pick and put it together and make it sound like he said something that he didn't really say"
"disinformation"
"very deceiving headlines"

The problem if you listen to this entire video is that Linda Douglass never explains why the quotes that are pointed to above were taken out of context or were misleading. She just provides some other quotes. But as I understand it the point of the first video was not to deny that the president is making the claims that Douglass points to, but to show that two years ago Mr. Obama was saying that a government insurance plan would be used to replace private insurance. Indeed, the "shock" value of these older quotes was how they were in contrast to what Mr. Obama is now claiming. What was the "shock[ing]" headline that upset Douglass: "Uncovered Video: Obama explains how his health care plan will 'eliminate' private insurance." View the first video and please tell me what is inaccurate about that headline.

Fox News poll indicates that 27 million without health insurance

How does the government know how many people don't have health insurance? It figures this out through polls. A new Fox News poll shows that about 9 percent of Americans, about 27 million people say that they are without health insurance. This is essentially the same percentage that they got in 1998.

Do you have health insurance?
. . . . . . . . . . Yes . . . No (Don’t know)
21-22 Jul 09
Everyone . . . 91% . . 9 . . . -
Democrats . 88% . . .12 . . -
Republicans . 94% . . 6 . . . -
Independents 94% . . 6 . . . -
15-16 Jul 98 . . 91% . . 8 . . . 1

For a more complete discussion see here.

Obama on the "evil" insurance companies

Mort Kondracke has some amazing quotes from Obama on insurance.

ARP event, he [Obama] said, "So, the idea behind reform is, No. 1, we reform the insurance industries so they can't take advantage of you."
At Children's Hospital last week, he said, "Health care professionals are doing heroic work every day. ... But they're being forced to fight through a system that works better for the drug companies and insurance companies than for the American people."
He also said, "Even as America's families have been battered by spiraling health care costs, health insurance companies and their executives have reaped windfall profits from a broken system."
And, he added, "Those opposed to reform are doing nothing but working for insurance companies and insurance executives."
He told the American Medical Association in June, "We need to end the practice of denying coverage on the basis of pre-existing conditions. The days of cherry-picking who to cover and who to deny, those days are over.
"I know you see it in your practices, and how incredibly painful and frustrating it is - you want to give somebody care and you find out that the insurance companies are wiggling out of paying."

See also:

No profit motive: Removing incentives in government-run health care

If Dems want competition so much, why not support vouchers for education?