Also given the mandate of health insurance, this also means that medical expenses should go down with most individuals therefore making it harder just to reach the 7.5% let alone the 10%.

In writing the article, and responding to comments, I’ve done everything I can to avoid bias and speculation. I’m just talking about the plan as it is intended to work.

If you can find that story, I’d love to read it.

Google “health insurance company profit margins” and pick a site that you trust.

“Regardless, profit is the number after you pay your bonuses, lobbyists, marketing, rent, and take out your deductions. This issue is separate, in that 80-85% of our premium dollars must be used to provide health care.”

I assume you mean this comment to be negative, that companies (especially insurance companies) should not have lobbyists, marketing, or bonuses. Is this what you intended to imply?

Kirk is correct, I have a source who works in an insurance company, and she says that she is getting ready to find a new job because they project that their company along with 99% of all the other companies will become unstable in 2-3 years due to the 85/15. This is down from her last estimate of 5 years, but then there were no clear details. This is not her estimate, but the estimates of the people who run the numbers. And yes, she did mention the liquid assets they keep on hand in case of a disaster, and this is mandated by all the states.

If you can find that story, I’d love to read it.

Regardless, profit is the number after you pay your bonuses, lobbyists, marketing, rent, and take out your deductions. This issue is separate, in that 80-85% of our premium dollars must be used to provide health care.

I wonder if anyone knows if health insurance companies are viable with this requirement? I read that the health insurance industry averaged around 4% profit last year, and most of that was made from investing the premiums. Most (all?) states require that insurance companies keep sizable amounts of liquid assets in case of a disaster. How would a new insurance company be able to build up these reserves, pay employees, overhead and taxes on 15% and make a profit? Well, maybe that’s the whole point.

I can assume your comment is negative. So what do you propose that these “greedy” landlords do? Dump the property they own, which will depress the RE market?

What’s the purpose of owning a property then? To take risks with the hope of a profit in the end? Business owners, landlords, investors, all take risk. After all in the real world, there is not assurance that the property will make money in the end is there? I’m not going to go in to detail how in the end everyone is greedy individually, and collectively makes for a better society. I’m not going to rehash what I’ve discussed elsewhere. If you are so interested read my guest post on Financial Samurai site:

http://www.financialsamurai.com/2010/01/13/you-are-already-wealthy-stop-complaining/

If statements like you make is the general consensus of society, then our country is doomed.

p.s. My math tells me that a childless burger flipper working full time at minimum wage earns too much for expanded Medicaid. This person will get a partial subsidy, and thus will be required to pay out of pocket for insurance,

Does anyone seriously believe an American can live adequately on minimum wage AND pay for health insurance?

Here is a great review of the numbers from someone who used to be on the CBO committee:

http://www.nytimes.com/2010/03/21/opinion/21holtz-eakin.html?ref=opinion

One of my beefs with a lot of these “fact check” sites and related reporting by AP and Reuters is that they often just parrot what the administration is proposing. That’s fine for simple “facts” but what’s lacking in many cases is speculation as to how things will play out in real life once enacted. How employers are going to react to this is one example. Do we even have concrete mathematical evidence yet on how the trillion dollar bill is going to shave billions of dollars off of the deficit?

Cheers,

Sam

I think all of your assessments are correct. While this bill does have some positives, for the most part it’s awful. It will not control costs, it will decrease the quality of health care (when adding 30 mil people with the same amount of Drs, you figure it out what happens), and for the 75-85% who already have health care they will have no real positives. The government will quickly figure out there won’t be enough “rich” to pay for it.

@Smithee: You missed about the lovely 3.8% tax on passive income:
http://www.businessweek.com/news/2010-03-18/health-bill-said-to-add-3-8-medicare-tax-on-unearned-income.html
This is in addition to the Bush Taxes that will expire. The business creators are gonna get HAMMERED on this stupid bill, which will put a massive drag on the economy.

Instead of trusting (yea right) our government will do the right thing, let’s look instead at our government history of previous entitlements and budget-wise how well they are doing… To put it simply, awful.

On a separate note, I hope to post a blog entry about ways to help invest around this bill and the investing ramifications.

You do a pretty good job of putting lipstick on the pig, but it is still a pig.

It is a numbers game and chances are there are enough taxpayers that don’t reach the 10% that they are essentially ridding the $3751 in my example. Multiply that number by the how many million? Now you can see some of the “fuzzy math” involved in the way that the lawmakers are going to “pay” for the health care bill.

Fortunately, there are plenty of Smithees out there forking over $30/month to the Party and blindly following. In fact, it appears the author has nothing but good to say about the passage of the bill.