Watching The Health Insurance Debate With Weariness

Let’s face it, health insurance discussions create feelings of great weariness. Is the new legislation going to lead to Americans obtaining health insurance without causing even more household budgeting problems?

All of the proposals being considered will impact the ability of families to keep debts and taxes low and that is why there is so much debate going on.

There have been a myriad of proposals concerning health insurance. Some suggestions have been to simply require everyone to buy some kind of health insurance.

That sounds good in theory but what if you can’t afford it? So the new proposals said everyone would have to buy health insurance, but people meeting certain income limits could get subsidies to offset the cost. There are also proposals on the table that impose financial penalties on those who don’t buy health insurance.

This is a difficult discussion because it holds so many potential pitfalls for consumers. Clearly most people believe everyone should have access to affordable health care. But placing another government imposed financial burden on taxpayers is not being received with a lot of enthusiasm.

Here is the heart of the problem. What if the government passes a health care reform law requiring the purchase of health insurance and the family simply cannot afford it even though they meet income requirements? They would be fined on their income taxes which makes it more difficult to comply with tax law.

It is difficult for many consumers to understand how health care reform has gone from providing basic health insurance to all to an IRS collection system. The IRS is the agency that would have to monitor and collect the penalties. But the most recent Senate Finance Committee recommendations are leaning towards softening the penalties.

Senator Olympia J. Snowe was quoted as saying, “The obligation should be first and foremost on the United States government to ensure that these (health insurance) plans will be affordable in the marketplace. It surprises me that we would have these high-level penalties on the average American when we have to certainty about whether or not these plans will be affordable. I just don’t understand why there’s this impetus to punish people.”

So what is in the works and what will impact consumers the most? The health care legislation is a work of art in transition. Some proposals impose new fees and taxes on businesses. Some plans place fees on high-cost health insurance policies. There are proposals to place fees on health insurers, drug manufacturers and others involved in the health industry. The biggest impact on consumer will come through mandatory insurance requirements and potential tax penalties.

The best advice right now is to begin evaluating your insurance situation including the status of health, life and disability insurance. If you currently have insurance through your employer, it is still advisable to consider how you would cover part of the cost of that insurance.

It is generally believed that by the time a law is passed even people who are insured will have to pay more for their coverage in order to cover the cost of universal health coverage. If your budget is so tight there is no room for one more penny of expense, then now is the time to look for ways to trim your expenses.

The good news is that if your insurance expenses do not increase, then you have a leaner meaner budget and can increase your savings rate.