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Obamacare Doomed! Here's the Loophole that Anyone Can Exploit!

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Well, I've read around about this decision and the details of the bill and apparently there is a loophole in the law that will sow the seeds of its own destruction. We all know the most controversial part of the law which requires that everyone purchase health insurance or else pay a penalty. The Supreme Court ruled that this law was constitutional because this penalty is a tax. They ruled that Congress cannot mandate that people buy health insurance, but that they can tax you if you do not. They ruled that this is a tax and not a penalty because the tax is so small. Vertigo has mentioned a figure around $95 several times in the forums. Now obviously $95 is a lot less per year than it would cost to buy health insurance. The Court did say, however, that if the tax was so high and burdensome that it would basically ruin you if you did not buy health insurance, that would be unconstitutional since that would be forcing people to buy health insurance via the tax code. Here are some more key facts: the bill has several features which are meant to protect people from not having insurance such as no longer allowing insurance companies to deny coverage based on pre-existing conditions. One more thing, the IRS is not allowed to use aggressive methods in collecting the penalty/tax for not buying health insurance.

So, what's the loophole? Don't buy insurance, don't pay the penalty, and then only buy insurance when you get sick since they can't deny you coverage. The penalty/tax is so small that it's a lot cheaper than buying insurance, and the IRS is likely not going to be able to collect it from you anyway. Not only that, you can wait until you are sick and then buy insurance and be fully covered. And here's the kicker: since the Court ruled that the law is constitutional only so long as the penalty/tax remains small enough to be considered to not force people to choose to buy health insurance, they can't raise it without risking the bill being overturned!

Obviously this is not going to work if enough people exploit this loophole since then there won't be enough healthy people paying insurance premiums to pay for the care of the sick. The government will have to step in to cover the costs and they won't be able to raise the penalty to force people into the system. The insurance companies will still have to cover tons of extra costs and will likely go out of business without government help.

Comments

1 year, 9 months ago

Another worthless article....

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toe 1 year, 9 months ago

I already am implementing all legal efforts to deny the government a healthcare win. PAC's will form soon to advertise these options and begin to paint users of Obamacare as unAmerican. This will be a multigenerational effort.

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ivalueamerica 1 year, 9 months ago

Probably one of the least thought out opinion pieces I have read in some time.

I doubt the writer has any grasp on reality let alone grasp of what he is talking about, but even if this giant loophole does exist, it will be cleaned up in a matter of minutes making it a moot point.

Anything of substance or just chicken little running around yelling the sky is falling the sky is falling?

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JayhawkFan1985 1 year, 9 months ago

Liberty, you remind me of something my grandmother used to say since she was a good Presbyterian...

"If wishes were horses then beggars would ride?"

Just remember they got Capone on tax evasion too...

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Bushloather1 1 year, 9 months ago

I think L-1 is so rooted in an ideology that he can't think clearly. He must find reasons to denegrate anything that does not fit it. And if that means using convoluted logic and twisted facts in a seemingly delusional manner, so be it. Sarah Palin has nothing on you L-1. I'll give you that.

It only speaks to the need of a more concentrated effort to be made in the field of mental health.

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jafs 1 year, 9 months ago

There is a built in control on price inflation, in that insurance companies set maximum levels of reimbursement for services.

So, a provider can't just charge whatever they want - if their charge is more than the insurance company's "reasonable" level of reimbursement, the company will drop it down to that level.

The real problem is that providers will inflate their charges for those without insurance to make up for that.

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Mike Ford 1 year, 9 months ago

This comment was removed by the site staff for violation of the usage agreement.

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Mike Ford 1 year, 9 months ago

when I started at my job in 1997 my health care premiums were $34.00 a week. When my employer did away with company health care in February 2011 my premiums were at $75.00 a week with a cafe plan that didn't tax my health care contributions so when my plan $ came back to me I had $55 a week to put towards insurance after that the contribution was now taxed. I was spending $1440 a year in 1997 and $3400 to $3600 a year on insurance just for myself in year 2011 before it was done away with. If our insurance comes down to $2000 a year and is actually full on health insurance instead of the accident/quasi health insurance we have now I'm okay with this. I just love all of the preacher screaming on the corner types screaming for rapture as Europe and Canada think this country is a bunch of raving idiots who yell the loudest about nothing. Liberty...you must have at least twenty posts on your own blog.....no need to control your ego.... I'm waiting for a comment.

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fiddleback 1 year, 9 months ago

This libertarian scheming is cute, but arizonajh said it above: "Given the choice of paying $1500 for nothing (tax) or $2000 for basic insurance, which do you think most people would choose? They may not be equal but the cost/benefit could reach a point where it may not be equal but the alternative would become cutting off your nose to spite your face."

For most, exploiting this "loophole" would mean the penalty costs them their tax refunds. So the IRS may not be able to aggressively pursue evaders who didn't have a refund coming, but how taxpayers are willing to play such a game? You true believers can call this a fatal flaw, but really, how many people are either 1. so stingy that they'd rather pay $1500-1999 for nothing than $2000 for coverage, and/or 2. sufficiently angry/libertarian enough to play this game of chicken with the IRS, out-of-pocket medical bills be damned?

At least you've got that one raytech guy above on board, the one spitting on our "Kenyan Muslim dictator [and] his butt ugly wife." Maybe y'all can hold a convention and congratulate each other on fighting for our freedom and saving money while doing it...

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Mike Ford 1 year, 9 months ago

living on stolen lands is not just liberty. think of your circumstances liberty if you were with your ancestors as paupers in a fiefdom in Europe. Mr. Roberts has a part in that mess also. Mr. Roberts represented Alaska in the Venetie case in 1989. Alaska aboriginal land claims are different than the lower 48. Mr. Roberts clerked for the tutor of all Indian haters....William Rehnquist. When the City of Sherill V Oneida Indian Nation case came forward many of the justices came to clerk Roberts for advice who wrongly advised them that the Oneidas had no claim and ignored the Indian Non Intercourse Act of 1790 using the Alaska model incorrectly. The Alaska Native Settlement Claims Act created five boroughs and each borough had it's resouces harvested and sold on the open market and distributed to tribal community members who gave up their land claim areas. Such is not the case in the lower 48. Mr. Robert's incorrect advise led to the dismissal of two century old land claims by a number of the Iroquois Confederacy members whose land was illegally taken without an act of the US Congress whose powers over Indian Affairs derived from the Commerce Clause. These tribes were prevented from suing eastern US states from 1790 to 1973 when the state's sovereign immunity was finally pierced as the US Government joined the tribes in suing the thieving states. Roberts went partisan states rights and ignored precedent. Quit whining liberty......you're living on stolen land in denial/

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beatrice 1 year, 9 months ago

LO: "And it is no crime to disobey an unjust law."

As will all other major developed nations in the world, doing what is necessary so all people have access to health care is just ... and the Supreme Court just ruled in its favor.Disobeying this law will be a crime.

Liberty_One, I want you to know that you speak for no one but yourself, and in this case, speaking appears more like a whine because you didn't get your way.

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raytech70 1 year, 9 months ago

I already know several efforts to popularize the loophole-- some are even offering to foot the penalty... I'm doing the loophole-- thousands and thousands of others I know will as well... Obamacare will be known as the biggest mistake our country has ever committed... it won't be as drastic as prohibition but it's going to hurt BAD. It may even result into the end of the country as we know it... all thanks to our Kenyan Muslim dictator his butt ugly wife.

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avarom 1 year, 9 months ago

TOPEKA – (June 28, 2012) – Kansas Attorney General Derek Schmidt today issued the following statement on the Supreme Court’s decision upholding key provisions in the Affordable Care Act:

“I’m deeply disappointed in the Court’s decision. The era of big government lives on.

“The Court’s majority declared Obamacare to be nothing more than an old-fashioned tax-and-spend program. No more can Congress or the President claim that this is ‘not a tax.’ American voters now must decide, through the 2012 elections, the wisdom of this formerly hidden tax increase. Kansas policy leaders also now have the choice whether or not to spend more Kansas taxpayer funds to expand the Medicaid program.

“The states’ arguments were not ignored. The Supreme Court today flatly rejected the federal government’s unprecedented power grab under the Commerce Clause. It also rejected the federal government’s effort to transform the Medicaid program from a federal-state partnership into a centralized program run by Washington, from Washington and solely for Washington. These legal rulings will benefit the long-term vigor of our federal system.”

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akt2 1 year, 9 months ago

No point in sugar coating it. The initial onslaught of users will be crippling to healthcare providers. Mass Medicaid. They'll be lined up out the doors. Go to the ER when you have a cold, stub your toe, have vomited twice in the past 4 hours, have a rash, or have a temp of 100. They already do that, so x that by however many millions. The next expansion for hospitals should probably be the waiting rooms at the ER.

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werekoala 1 year, 9 months ago

I just wanted to say that on a professional level, I admire the grace and panache with which you have executed this pivot. Lesser men would be bartering chickens for whiplash treatments...

"Hey everybody,.good news! You know that thing that we have been screaming bloody murder about for the past two years? That we said was a bad as communism?

Funny story, but we finally got around to reading the darn thing, and you won't believe the loophole we found..."

I would tell you about some other tax "loopholes" I exploit through owning a home and donating old clothes to charity, but I don't want to spoil the surprise for you...

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booyalab 1 year, 9 months ago

I don't see Obamacare collapsing so easily. It is as unconstitutional as Medicare, which isn't in danger of going away anytime soon. It screws over young people, like Medicare....only much more so. Old, relatively rich people get the benefits.....young, relatively poor but healthy young people get very little, if any, benefit but pay disproportionately more. Medicare was bad enough as far as being fiscally unsustainable goes. Now we have the same problem magnified several times.

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Mike Ford 1 year, 9 months ago

I pay $2465 a year for insurance that is basicially accident insurance with some health insurance added in for my wife and I. Minor pre existing conditions prevent us from getting real health insurance. When I hear dimwits like weiser and can't have it both ways talking their nonsense about freeloaders they sound like reality disconnected interpreters for Rush Limbaugh. It's not about free stuff dimwits. It's about an economically fairer health system like I've seen in Canada or read about in Northern Europe because ' unlike Dittoheads I read. Why do people like this willfully walk into a fan metaphorically? If you don't want government intervention exercise, eat right, don't smoke or drink excessively, wear a motorcycle helmet, get regular doctor appointments.....no one is taking your freedom dimwits....they're simply trying to get you to take responsiblity for your health and be caring and considerate of others. This tax is probably less than what you're paying now for all of the uninsured that show up at the emergency room. Maybe if the hospitals and insurance companies opened up the books and showed the pointless yellers this maybe the yelling would stop. I guess reality doesn't matter.....

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geekin_topekan 1 year, 9 months ago

Whaaaaaaaaaaaa!!!

I don't want to invest in America! M-m-my doctors going to become a-a-a whore. Every non-white, or day labor is going to make a rush toward the first doctor's office that they se-e-eee and there won't be any left for m-m-e-eeee!

Jesus shined on Justice Roberts. Praise him!

OK, now that I got that out of my system--What was the question again?

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akt2 1 year, 9 months ago

There won't be enough doctors. Regardless of how much insurance you have. People will still be using the ER because they can't get in to see a doctor. The volume of patients treated in ERs will be staggering. If you are referred to a specialist you can plan on 4 or 5 months . Some of them already schedule at least a couple months out. 26 year olds will get to stay on their parents insurance. So what? Unless they have a chronic disease 20 somethings don't use doctors that much. Supposedly seniors will have more coverage for medication. This won't matter either because there are already drug shortages in this country. The demand on the healthcare system including providers is going to far exceed the supply.

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Richard Heckler 1 year, 9 months ago

Now think of the additional millions or billions that go to political campaigns.....

Wonder why health insurance gets more expensive?

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Richard Heckler 1 year, 9 months ago

Health Insurers Funded Chamber Attack Ads

By Peter H. Stone

Just as dealings with the Obama administration and congressional Democrats soured last summer, six of the nation's biggest health insurers began quietly pumping big money into third-party television ads aimed at killing or significantly modifying the major health reform bills moving through Congress.

That money, between $10 million and $20 million, came from Aetna, Cigna, Humana, Kaiser Foundation Health Plans, UnitedHealth Group and Wellpoint, according to two health care lobbyists familiar with the transactions. The companies are all members of the powerful trade group America's Health Insurance Plans.

The funds were solicited by AHIP and funneled to the U.S. Chamber of Commerce to help underwrite tens of millions of dollars of television ads by two business coalitions set up and subsidized by the chamber. Each insurer kicked in at least $1 million and some gave multimillion-dollar donations.

"There's no question that AHIP has quietly solicited monies from their members which were funneled over to the chamber for their ads," said a source. The total donated by the health insurers, according to one estimate, was as much as one-quarter of the chamber's total health care advertising budget.

A spokesman for Kaiser said it contributed funds to AHIP last year for positive ads on health care reform, and that AHIP has told the insurer that none of its monies were sent to the chamber.

Last August was bruising for the health insurance industry: Obama and congressional leaders attacked its abuses and profits and AHIP President Karen Ignagni warned publicly that "the vilification strategy isn't going to get health reform passed."

In late October, Ignagni wrote in a letter to the Washington Post defending a health insurer-funded study critical of congressional cost estimates, "Let me be clear and direct, health plans continue to strongly support reform." However, by that time money was already flowing through AHIP to the chamber to fund its negative ads.

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Richard Heckler 1 year, 9 months ago

The Washington Post:

Nearly half of the insiders previously worked for the key committees and lawmakers, including Sens. Max Baucus (D-Mont.) and Charles E. Grassley (R-Iowa), debating whether to adopt a public insurance option opposed by major industry groups. At least 10 others have been members of Congress, such as former House majority leaders Richard K. Armey (R-Tex.) and Richard A. Gephardt (D-Mo.), both of whom represent a New Jersey pharmaceutical firm.

The hirings are part of a record-breaking influence campaign by the health-care industry, which is spending more than $1.4 million a day on lobbying in the current fight, according to disclosure records.

And even in a city where lobbying is a part of life, the scale of the effort has drawn attention.

For example, the Pharmaceutical Research and Manufacturers of America (PhRMA) doubled its spending to nearly $7 million in the first quarter of 2009, followed by Pfizer, with more than $6 million.

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Roland Gunslinger 1 year, 9 months ago

A lot of insurance companies have a 30 day waiting period from enrollment to when the insurance kicks in... so I doubt you can just buy insurance "when you get sick".

Even if you did there is a deductible that has to be met before the insurance covers their portion.

So if your deductible is $750 and your first months payment is $300 + your portion of the medical bill and copay also you're paying the tax penalty because you only bought the insurance in November when you go sick...

Sounds like you would have been better off just getting the coverage initially than waiting until you get sick.

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Richard Heckler 1 year, 9 months ago

Sure both sides of the aisle and the medical insurance industry,pharmaceutical industry,shareholders,golden parachutes,BOD salaries and CEO salaries are keeping insurance cost going through the roof. Yet so many say WE MUST keep this fraudulent system intact.

I say what the hell for?

Top Corporations Aid U.S. Chamber of Commerce Campaign to kill prudent medical insurance reform http://www.nytimes.com/2010/10/22/us/politics/22chamber.html?pagewanted=all[/ ======= Former Lawmakers and Congressional Staffers Hired to Lobby. The hirings are part of a record-breaking influence campaign by the health-care industry, which is spending more than $1.4 million a day on ANTI INSURANCE REFORM lobbying. http://www.washingtonpost.com/wp-dyn/content/article/2009/07/05/AR2009070502770.html ======== http://www.commoncause.org/site/apps/nlnet/content2.aspx?c=dkLNK1MQIwG&b=4773613&ct=7146131 http://www.opensecrets.org/news/2009/06/diagnosis-reform.html ========= Health Insurers Funded Chamber Attack Ads http://undertheinfluence.nationaljournal.com/2010/01/health-insurers-funded-chamber.php[/

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mom_of_three 1 year, 9 months ago

get sick, buy insurance - yes, it sounds like a loophole. BUT one question which hasn't been asked - how long does it take for insurance to kick in? Will it be immediate in all circumstances, in some circumstances, such as a new child or new job? If it isn't an immediate kick in after you find out you are sick, then you may get sicker in the mean time. And if you are fighting a serious illness, that could be very deadly.

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Roland Gunslinger 1 year, 9 months ago

FYI I said the $95 tax penalty is for the first year (2014).

It goes up to $325 in 2015 and $695 in 2016... still a lot smaller than annual insurance payments.

However, for families, I believe I read somewhere back when the law first came out that there will be an alternate percentage of income above a certain dollar amount. For example if you make $75K a year and the threshold is $10K with the penalty rate of 2% (not sure if this is accurate) then the penalty for your household would be $1300.

Still it seems L1 is right, all around the tax penalty appears to be quite a bit less than annual insurance cost.

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Bushloather1 1 year, 9 months ago

Yes, that is a "loophole" for those willing and stupid enough to use it. But it is not the HOOPHOLE that currently exists and costs us way too much in higher premiums. Yep, one can still avoid "preventative care" which is free now thanks to ACA, and just wait until they are in crisis in the Emergency Room. You're right to be stupid is still intact.

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Leslie Swearingen 1 year, 9 months ago

I know that in times past I have been totally alone and very sick and I would not wish that on anyone. I credit God with finding the path out of that for me. There has to be some way to get help for those who are in pain and sick without being hateful and suspecious about it. Those of you who have families and good jobs should respect those things and appreciate them, and have some compassion for those who don't. Now, my family that was scattered is back together and we are all enjoying it. Because of Medicaid I have a primary care doctor who is very good and I am now well taken care of in that regard. From the vantage point of old age I would strongly advise those who are young to please watch what you eat and exercise. Get out there and move. Trust me you will be so happy you did. So many things we bring on ourselves and we are then sorry after the fact.

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tolawdjk 1 year, 9 months ago

You're loophole sounds suspiciously like fraud and tax evasion, but then, coming from you, I'm not surpised.

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beatrice 1 year, 9 months ago

Hole is correct, but I don't think it starts with loop.

(sorry. couldn't resist -- don't really mean it)

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somedude20 1 year, 9 months ago

Fair, fair, fair....Marsha, Marsha, Marsha......

Is it fair for a large number of the population to jack up the costs of healthcare by NOT having insurance or paying for the healthcare that they use?
Imagine all restaurant in America were 1/3 of the people who go there do not pay for their food, and they eat alot. They eat the burger but do not pay for it. Well, the restaurant needs to stay open because they provide a basic human need (food for life, like how a hospital provides health) so they pass the costs of all the people who take, take, take, but never ever pay and they pass the costs to the goverment and to the people who do pay for that service. So for the people who are responsible and pay for what they use, we now must pay for others who don't...does not sound like liberty

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pizzapete 1 year, 9 months ago

Don't pay the penalty? You don't think the government is going to or be able to collect the money? Good luck with that.

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Richard Payton 1 year, 9 months ago

Only 14 States have exchanges in place as of today. Will Kansas have an exchange in place by 2014 or will the Governor tell the Fed's to keep the Medicaid money?? I'll let you answer this poll question.

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autie 1 year, 9 months ago

I don't know where the loophole is if one experiences a catastrophic event like a car wreck or a stroke/heart attack....You are bam...in it. I'm sure the insurance company would have plenty of time to 'adjust' before you are magically covered. I'm sure the law will be adjusted over time to work out bugs like the cons and cheaters that would have it as you describe. But hey, like I've read plenty of other places, this plan beats the hell out of maintaining the status quo which is what the industry would have liked. I kicks over the pile and lets the stench rise so some thing will happen and not the spiraling out of control whirlwind it is now.

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RoeDapple 1 year, 9 months ago

Okay . . . since brownstain, in his infinite wisdom, has decided Kansans don't want it and sent back the check, how does this really affect us?

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Mark Jakubauskas 1 year, 9 months ago

Perhaps what should have been done instead is a simple free-market solution: If you don't have health insurance or can't pay via credit card or cash, you don't get treatment. No ambulance, no ER, nothing. People want to choose to go without health insurance or some form of health coverage (like Medicare/Medicaid), OK, fine...but you don't get the benefit, either.

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parrothead8 1 year, 9 months ago

Lol...you need to "read around" a bit more. Try starting with the legislation itself, and educate yourself rather than relying on things you've heard "mentioned...several times in the forums." I'm not saying that you're wrong to look for loopholes or anything, but you really need to rely more on your own reading and interpretation rather than things you read around the Internet. It would give you a lot more credibility.

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CountyResident 1 year, 9 months ago

As with so many things that have been reported about the Health Care Bill, your comments that all you need to pay is $95. is misleading. That is the minimum that anyone would pay in 2014. The minimum goes up to $695. in 2016. The real amount that you would pay is 1% of your income in 2014 and increases to 2.5% in 2016. Blue Cross has estimated that on average a family of three in 2016 would pay $1,736. While IRS will not put you in jail for non-payment, they will reduce your income tax refund by the amount of the health insurance penalty that you did not pay.

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arizonajh 1 year, 9 months ago

That may work for a few years but I believe the "tax" increases year over year. I heard on a certain news channel that it is something like $95 the first year but then goes up in future years for non-participation. I think for singles it is - 1st year $95, 2nd year $300+, third year $600+ and so on and for families it is somewhere around $300 the first year and over $2000 by the third. The increases top out in a formula averaging the price of plans offered on exchanges (not sure if that is state exchange or national avg.) and of course all with exceptions for low income levels. Eventually you would end up paying just as much to not have insurance as you would to have it. Also your plan would work if you got sick but what if you were in a home accident unconscious and not able to access new coverage before treatment was required?

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Kathy Getto 1 year, 9 months ago

Lie

Rinse

     Repeat........................
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Liberty_One 1 year, 9 months ago

You know, when you look at how obvious this loophole is, it becomes pretty clear that this was all just a step up towards single payer or full-out socialized medicine. This was never really intended to work, just to get people used to the idea of the government intruding just a little more into their lives and the marketplace.

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Liberty_One 1 year, 9 months ago

You see, with these folks it's heads I win, tails you lose. If our health care system works well over the next decades, well it was because the government took a brave step forward to corral the evil insurance companies and to ensure coverage for everyone. If it fails miserably, it was because the government didn't go far enough and allowed too much of the health care industry to remain under private control.

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Liberty_One 1 year, 9 months ago

My prediction: as more people exploit the loophole, insurance premiums will start to rise dramatically. The Free Market will be blamed as a failure and the call will be put out for the government to step in and implement single payer or some other Big Government health care system.

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