Those Who Don’t Learn From History Are Idiots…

From our buddy and health-care professional Veruckt:

Okay stop me if you have heard this one before. The Federal Government goes to an industry and says:

“We want you to take more risk. As a matter of fact if we don’t think you are taking enough risk we are going to penalize you with a tax. Now don’t get too worried though because if you take too much risk and lose your shirt we will bail you out.”

Sounds eerily like the housing crisis and the recession it caused doesn’t it? Not this time. No, now the government is reapplying that wisdom to the health insurance industry in section 1343 of the healthcare crap legislation. I’ll put it here in legal mumbo jumbo and then I’ll translate into human language.

SEC. 1343. RISK ADJUSTMENT.
(a) IN GENERAL.—
(1) LOW ACTUARIAL RISK PLANS.—Using the criteria and methods developed under subsection (b),each State shall assess a charge on health plans and health insurance issuers (with respect to health insurance coverage) described in subsection (c) if the actuarial risk of the enrollees of such plans or coverage for a year is less than the average actuarial risk of all enrollees in all plans or coverage in such
State for such year that are not self-insured group health plans (which are subject to the provisions of the Employee Retirement Income Security Act of
1974).
(2) HIGH ACTUARIAL RISK PLANS.—Using the criteria and methods developed under subsection (b), each State shall provide a payment to health plans and health insurance issuers (with respect to health
insurance coverage) described in subsection (c) if the actuarial risk of the enrollees of such plans or coverage for a year is greater than the average actuarial risk of all enrollees in all plans and coverage in such State for such year that are not self-insured group health plans (which are subject to the provisions of the Employee Retirement Income Security Act of 1974).

Now for human language.

Section 1- Low Actuarial Plans- If the government decides you haven’t lost enough money by taking large risk (ie. ran your business intelligently) then they will take your money through financial penalties.

Section 2- High Actuarial Plans- If you go all Fannie Mae and take too many risk and go broke in the process the state, not the Federal Government, will give you payments to get your plan on par with all the others.

Beyond that this completely and utterly disregards the free market and Capitalism by making all plans equal. What I mean by that is the state is to average the financial gains or losses for all plans and if you have lost too much they will pay you until you are back to average, if you have gained too much they will penalize you until you are back to average. There is no incentive to run your company intelligently much as there wasn’t in banking after the Federal Government instituted the Urban Renewal Act.

One other thing I’d like to point out is notice that the state not the Federal Government is responsible for the payments under this plan. This is significant for two reasons; first it is grounds for states to file 10th Amendment Constitutional challenges since it unfairly burdens the states and second because it’s the states coughing up the dough instead of the Federal Government the CBO (Congressional Budget Office) will not reflect the cost making this look great on paper.

Ladies and gentleman I think this current administration has unseated even David Copperfield as being the true masters of illusion.

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