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Wednesday, September 16, 2009

Can You Go To Jail For Not Having Health Insurance? Baucus Plan Released.

Senate Finance Committee, chaired by Senator Max Baucus (D-Montana) has issued the proposed health insurance plan.   Read the full Baucus plan here.

The plan raises the specter of criminal liability for those who are not insured.   That is not stated, but here's how it would work.

Enforcement of the health insurance mandate will be done by checking a box on the federal tax return.  (This presumably means the Internal Revenue Service will enforce the requirement.)  Now, any false statement on a tax return is punishable under Section 1001 of Title 18 of the United States Code (the same section used to convict Martha Stewart) with a prison term of up to five years.   Then throw in the interesting statute known as Section 371 of Title 18, which covers among other things those actions which "defraud the United States." 

Simply put, there can be no assurance that, at some point in the future, some smart-aleck prosecutor in the halls of the Justice Department will not engage in mental masturbation and, in the process of trying to show how smart he/she is, will conjure up a claim that some hapless soul is "defrauding the United States" by failing to have the requisite health insurance and thus imposing a "cost" upon the state.

More thoughts...

The plan does allow for opting out, meaning individuals can weigh the costs and benefits and choose to pay a penalty instead of being insured.   The maximum penalty per person (if one has an income of more than triple the federal poverty level) is $950 per year, or about $79 per month.   Weigh that $79 penalty and the risk of non-coverage against a cheap, no-frills, high-deductible insurance plan where an insurance holder still runs the risk of being "denied coverage."  I think many will do just that.

Some tidbits from the plan:

See page 24 second paragraph: "for purposes of calculating household size, illegal immigrants will not be included in FPL (federal poverty level calculations)."

Also, page 31 first paragraph: "Exemptions from the requirement to have health coverage would be allowed for religious objections [which are currently allowed under Medicare], and for undocumented aliens."  

Somehow, this plan -- especially the penalty part -- seems almost assured of squeezing that portion of the middle class which is just above the threshold for subsidies and for escaping the non-coverage penalty, and by inducing those families to make a Hobson's choice between paying for the hope/prospect of health "coverage" (remember, coverage is not guaranteed), and the rent (or food) I suspect the plan will help push a good number of working families towards de facto poverty.  

Who benefits?   The insurance companies.   Anything that mandates that people pay the insurance companies will by definition benefit the insurers.   This equates to people's pain, for private insurers' gain.   This plan is little more than a way to transfer wealth from people's pockets and into the coffers of the very profitable insurance companies.    Some would call this crony capitalism.

Eric Dixon is a New York lawyer and strategic consultant for businesses, political campaigns and individuals. Mr. Dixon is available for comment or consultation at edixon@NYBusinessCounsel.com and 917-696-2442.

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