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Why the GOP tax bill increases health insurance premiums

I received several emails from readers challenging my statement Friday that the GOP tax bill will result in higher health insurance premiums.  Here’s how.

Briefly, the Bill lets you buy health insurance after you get sick – without a penalty. It’s as if this guy was signing up for auto insurance post-crash…

Both the House and Senate versions of the bills end the penalty for those who don’t have health insurance. This penalty does 2 things; it financially penalizes those who go without coverage, and it generates funds that help pay for healthcare for others.

What the tax bills DON’T do is change the requirement that insurance companies cover anyone who applies.

Imagine if you were able to buy auto insurance after you crashed. Why would you bother to sign up and pay those premiums if you didn’t have to?

BTW, there’s a ton of research and history that shows what a bad idea this is, how much damage it does to insurance markets, and what we can expect.

Folks, this is just ONE example of the dumb ideas in this bill, from people who claim to understand how the free market works.

What does this mean for you?

Insurance rates are going to go up. 


One thought on “Why the GOP tax bill increases health insurance premiums”

  1. Joe,

    As usual, you are correct. But you left out one thing. They don’t care about the free market, or deficits, or now as Sen. Grassley said yesterday, working people. They care about the Koch Brothers, the Mercer family, Sheldon Adelson, and the rest of the donor class that keeps these bastards in Congress. We are seeing the undoing of all of the reforms since Teddy Roosevelt, with the national parks controversy, to the New Deal and the Great Society programs they are eliminating or will be in the near future. They want a 19th century class and economic/social structure for the rest of us, with technology of the 21st century. Essentially, like it was when the Industrial Revolution made a few millionaires like the Rockefellers and Carnegies and other robber barons, and left the rest of us in poverty and exploitation. But because of those reforms, we reaped the benefits of the industrial technology, so we need reforms that will allow us to reap the benefits of the new technology and thus re-create a new middle class.

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Joe Paduda is the principal of Health Strategy Associates




A national consulting firm specializing in managed care for workers’ compensation, group health and auto, and health care cost containment. We serve insurers, employers and health care providers.



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