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“Marxo-Sapiens” to the Rescue, Part 2: Prepare for 1,900 Pages of Unintended Consequences

Posted on November 9 2009 6:12 am
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Editor’s Note: Click here for Part 1 of this 3-part series

Americans will be very unhappy when this bill finally is implemented. Unintended consequences abound, as they always do, when liberals “do good” with other people’s money. Regardless of how bad one paints the picture, it is almost guaranteed to be worse. There will be a single government approved “qualified” insurance plan that all will be required to purchase. The only choice you will have is the size of the deductible. All other provisions will be pre-set by the government. I’m sure they know better than you, right?

Even though the bill is 2000 pages, the nature of this “one size fits all” plan has not yet been devised. So we cannot even evaluate what is being shoved down our throat. Feel safe yet? All tax filers will have to provide proof of being in a qualified plan, or be fined. You will not be able to keep your current insurance.

There will be enormous incentives to game the system. The creativity of Americans, rather than being unleashed in free markets, will instead be unleashed onto how best to “rent-seek” (i.e., “get something for nothing”) from their fellow citizens. For example, some will compare the costs of the fine versus the cost of purchasing health insurance. Some employers may choose to pay an 8% payroll tax rather than pay for insurance. That means you may now be required to purchase insurance with after tax dollars rather than get it “free” from your employer. And if you don’t buy insurance, you will be fined. But since insurance companies cannot deny coverage for pre-existing conditions, it may be rational for you to pay the fine of 2.5% of your income rather than purchase insurance. You simply purchase the “insurance” when you need it. Insurance companies will not be allowed to deny coverage or charge you more. How long do you think insurance companies can stay in business with that model? “Gaming” the system will itself become an industry. But it won’t last for long. It will ultimately and quickly default to a government single payer system.

Subsidies exist of course. Families making less than $33,000 get medical care “for free” and are phased out gradually up to $88,000 in income. Exceptions exist as to who gets fined for not participating based on various “hardships” and even religious views. Look for an up tick in new religions and “hardships.” Marginal tax rates will go up 5.4% for the selfish (and unselfish) “wealthy.” The highest marginal tax rates will be near 60% — some estimates are much higher.

See the concluding segment of of “Marxo-Sapiens” to the Rescue tomorrow.

Editor’s Note: Visit Michael Rulle’s Blog Here. See his previous NewsReal commentaries here.

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