Arbitrage: Obama and the Dems (article)

[Sebass1271]

Health Care: Arbitrage Obama And The Dems
Yes, I mean it.

And yes, I've read the Health Bill. Both the 2,000+ page original and The House changes as voted upon.

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.
Ok, this one's easy.

full article here:
http://market-ticker.denninger.net/archives/2109-Health-Care-Arbitrage-Obama-And-The-Dems.html


so, what do you guys think??? is this guy correct???

[Citizen Kang]

1. Denninger is a smart cookie

A conservative, but a guy who knows what he is talking about when it comes to financial matters.

There are going to be a lot of people who don't purchase insurance and pay the fine because its cheaper. It's fairly common in Massachusetts now. And yes, rate hikes by insurers are not going to stop in the short term. They still have the ability to gouge us for the next few years and don't think they aren't going to do it.

His conspiracy theory is that this plan is going to bankrupt the insurance industry in the long term and force a government-run health care system. I don't buy that.

Lots of people cheering around here because the Democrats "won" a political victory, but they don't really know what is in the bill and how Republican it is at its core. Sure the right wing whack jobs that are considered Republicans today are against it, but this type of health care "reform" is what was championed by Nixon and Ford 40 years ago. Funny how yesterday's Republicans are today's Democrats.


I miss my party.

[muriel_volestrangler]

2. I have no idea where "the "cheapest" acceptable policy will cost somewhere around $15,000

... for a single person" comes from. This calculator says, as an example, a single 35 year old earning $40,000 would pay $3,082. It's still a lot more than the penalty for not having insurance, but if this guy wants to be credible, he needs to show where his figures come from. Since that "cheapest possible" he claims would be well into the 'Cadillac' taxable bracket, I think he must be wrong.