Wednesday, March 24, 2010

Market Ticker: Kiss health insurance companies goodbye.

Karl Denninger has his own take over at the Market Ticker after reading every version of the health care bill that was recently passed:

"Here's the bottom line:

  • If you refuse to buy health insurance, you will be fined on a sliding scale that amounts to 2% of your AGI. So if you make $100,000 a year, you could be fined $2,000 for "refusing" to buy insurance.

  • You cannot buy a catastrophic policy any more. The "cheapest" acceptable policy will cost somewhere around $15,000 for a single person, and over $20,000 for a family. This is, for most people, more than five times the maximum possible fine - each and every year. The law makes it effectively impossible to maintain an existing catastrophic policy as they "renew" every year, and should any change be made you are then forced to buy something "acceptable" in the law (or pay the fine.)

  • When the "pre-existing condition" bar comes down you cannot be charged more or denied coverage due to pre-existing conditions.

  • I fully expect 20-50% premium increases immediately, and for the next three years sequentially, in all existing policies. This is precisely what the banks did in front of the CARD act becoming effective, and it will happen here as well. That is the cause of the short-term rocket shot in the health-related stocks this morning.

  • In addition the capital gains tax changes will do severe damage to capital formation immediately, and these changes will become especially severe starting in 2014. The market will anticipate these changes and react accordingly, although you certainly wouldn't know it today."

Read it and weep


Anonymous said...

I'm furious about this! Downright unconstitutional. This legislation is why I will now vote straight ticket instead of "voting for the person". It was rare that I voted for a Democrat but for sure I won't now. Come on Jim Hood, file a suit on behalf of our state to stop this.

Anonymous said...

Denninger is a computer geek not an MBA or former insurance executive. He's great when it comes to knowing about dot investments, but I've no clue where he came up with these figures or the idea that you can't buy catastrophic coverage.
And, his figures sure don't tally with OMB figures.

For one thing, the percentages are specifically listed in the bill and are NOT a flat 2% across the board so THAT claim is plain inaccurate which calls all his claims into question.

I know OMB isn't entertaining and is dull, but it's a better source.

Kingfish said...

Doesn't matter. Starting next week I'm going to be reading through the law very sloooooowly and taking you guys with me as I explain it section by section. Will probably take several weeks but that is something I plan on doing next week. No snapshots, boring as hell, but I'm going to treat this like I did TARP and actually read the whole thing and keep posting it up here.

Anonymous said...

Kingfish: That you will make you the only person on the planet who has read it!

Anonymous said...

Denninger is a computer geek not an MBA or former insurance executive.

You are a nobody who has provided no links to anything that refutes anything. So who gives a fuck what you think.

Anonymous said...

It is going to be extremely fun to watch the Democrats in the Senate squirm as they oppose an amendment to the reconciliation bill that would forbid convicted sex offenders from receiving Viagra, Cialis, and other erectile enhancers under Obamacare.

Catfish said...

Do not be fooled; after this bill was signed yesterday, the health insurance industry is wrapping up business forever. If you're not insuring risk, you're not an insurer. Forcing health insurers to provide coverage regardless of underwriting and/or actuary analysis means they are no longer insurers. This law means that the government will be paying for all healthcare within the next 10 years. Fact.

Anonymous said...

I have a high deductible policy with a health savings account. I pay the first $5000 of my medical expenses. I am fortunate to be blessed with good health, which means my insurer has never had to pay a claim. Guess what? My policy won't be renewed because such coverage won't be offered by that company anymore. My premiums, which have been around $3000 a year, are going way up. I have been told that the cheapest "bronze" policy is going to cost around $15000 a year. This is just outrageous.

Anonymous said...

Mandated coverages, screenings and vaccinations, etc. will neuter high deductible policies.

Anonymous said...

Sounds like there will be a lot of uninsured folks waiting for the fines to hit....this is insanity.

Anonymous said...

This is just outrageous.

That isn't outrageous. That is Obamacare. Change that you need brought to you by the Social Democratic Party. They do it for the children.

Anonymous said...

8:54 -- that was tacky. Wouldn't it be nice if the people on the right could find a way to debate this issue without resorting to the kind of ugliness usually limited to the left?

I am not the person who posted the refutation to what Mr. Deninger said, don't even know who Deninger is. But here's a bio (Google is an amazing thing):

Anonymous said...

Save your indignation for somewhere else. 8:46 wasn't debating issues.

Anonymous said...

Health insurance companies add no value to the health care process. They take your money, take a hefty profit off the top, and then try to deny you coverage. What benefit do they provide? We need a single payer system.

Guaranteeing insurance company profits isn't the purpose of health care, you know.

Anonymous said...

2% profit is hefty? Only a DailyKos, weed smoking lefty would think that. Get a job! What do you think the profit margin is at Apple or Whole Foods?

Anonymous said...

I heard a Katherine Sebelius quote at lunch that they were aiming at taking away 90 percent of the profits from drug companies. So let me get this straight: health insurance companies are evil, drug companies are evil, bankers are evil...and on and on.....

Anonymous said...

I heard a clarification of the 2% today: it's more a range of 2-6%, and that's after stuff like advertising and executive compensation packages (and if my insurance exec neighbor's house is any indicator, that's a mighty nice package).

Anonymous said...

Comment @ the Market Ticker:

"Yep. Just got back from a meeting with the boss: No more new employees until we know the impact. Replacements only for salaried folks - no new additions(there goes my new assistant that I've been promised since November now and it hasn't happened yet...) and any hourly turnover will be replaced by temps from the temp laborer firm we work with. Family coverage is already $1,018 per month per signed contract through 12/31/10; but we can't risk it being $1,500/mo. for 2011 and $2,000/mo. or more (? - who knows) for warehouse and production people who only earn $2,000 per month now.

All hiring expansion is dead for the next two years minimum and turnover will be filled via temps instead of employees."

Kingfish said...

Where? Can't find it.

Anonymous said...

Pg 3.

Anonymous said...

Anonymous said...

Very nice of you Kingfish for taking the time to break this down for us. You Rock!!!

Anonymous said...

Actually, I read it and gave KF a site to access it.

2%-6% is AFTER big time salaries and bonuses and great "meetings"

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