Wednesday, August 05, 2009

Limitation of New Enrollment

The two-faced nature of this bill is reflected in Section 102. This section is titled "Protecting the Choice to Keep Current Coverage."

This section exists because the president made numerous soundbytes claiming that people could keep their current insurance.

The first item in this section is a paragraph titled "Limitation on New Enrollment" which curtails the ability of people to join your existing plan.

Insurance is based on the behavior of a pool of policy holders. These pools are dynamic. People join and leave the pool. The dynamic nature of the pool is an integral part of your existing plans.

Insurance is somewhat like a Ponzi-scheme in that it is dependent on bringing new policy holders into the pool on a regular basis.

The Limitations on new enrollment fundamentally changes the nature of your existing policy. Even if you keep your policy the fundamental change dictated by the legislation changes the nature of the pool making it something less stable and more expensive than it currently is.

To make matters even worse, The new law (section 102.3) places restrictions on premium increases. The restrictions make it extremely difficult for existing insurance plans to compensate for the changes in section 102.2

The section to preserve existing plans is nothing but a strategy to destroy such plans by a coercive change their nature.


Yomomma said...

So the discussion on the right has broken down to the point of fear-mongering based on out of context bill provisions? How sad.

I keep seeing people claiming this outlaws private insurance. It doesn't. It sets limitations on grandfathered plans.

The new healthcare bill sets new regulations on healthcare plans. Therefore, any new plan will be subject to these regulations. Existing programs can continue unchanged, but cannot add new members. However, newly regulated private plans can be purchased instead. If the pre-regulation plans could continue to add new members, then this bill would be pointless.

So if you want to keep your old plan without protection from being denied for pre-existing conditions and without limitations on premium growth for some reason, you can. That's all this section says. It doesn't make private insuance illegal. The private insurers helped write the bill.

y-intercept said...

Yomomma's post is truly bizarre.

In paragraph one, I am accused of quoting the bill out of context.

In paragraph 2, this stalwart of academic integrity accuses me of claiming the bill outlaws grandfathered policies. He repeats this accusation in the last paragraph.

But wait. My post does not say it makes current plans illegal. My post says that it fundamentally alters the nature of existing plans ... making them untenable.

You cannot keep your existing insurance it it has been made financially untenable for the insurance company, because said company would be forced to cancel it.

BTW, the post does not quote out of context. It shows that the title of a section is fundamentally opposed to the first paragraph in the section.