Health Inc.

Weak Mandate And Slim Subsidies Could Spell Trouble For Overhaul

So Sen. Max Baucus and the Democrats on the Senate Finance Committee are feeling pretty good about cobbling together an overhaul bill that came in at a relatively affordable $829 billion over 10 years.

A boy jumps into a swimming pool. i i

Will the young and healthy jump into an overhauled insurance pool? iStockphoto.com hide caption

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A boy jumps into a swimming pool.

Will the young and healthy jump into an overhauled insurance pool?

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But some of the compromises to pull that off are drawing fire now. Namely, slim subsidies for the middle class and a last-minute pullback on penalties for folks who skip buying insurance.

"You need everybody in the insurance pool to make sure that premiums are affordable," Alissa Fox, a senior vice president with the Blue Cross and Blue Shield Association, told NPR. "And lowering the penalty will mean that people will find it more advantageous to pay a very small penalty than to buy insurance."

The Blues put out a statement on the CBO verdict that was even more strident, saying amendments to the Baucus bill, "eviscerated the individual mandate." A weak mandate means higher insurance costs for everyone with insurance, they said.

The changes could leave many young, healthy people on the insurance sidelines while stocking the insurance pool with sicker people who cost more to care for. To recap, there would be no penalty for going without insurance in 2013. And the fines imposed starting in 2014 would amount to $200 for an adult, rising a few hundred bucks each year to $750 in 2017. Insurance would costs thousands of dollars a year, so the math isn't very pretty for the risk pool.

That's a formula for "ever-rising premiums for the people, businesses and governments that pay for medical care," the Washington Post reports.

The Post says the White House figured there might be an "industry uprising" and stressed that the legislation is a "work in progress."

Health policy guru Bob Laszewski lays it on the line, writing on his blog, "With Baucus gutting his fine for not having health insurance there would be no reason for people to buy it."

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