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Hiltzik column: Of healthcare mandates and loopholes

October 14, 2009 |  8:51 pm

Followers of America's healthcare mess know that its outstanding feature is the loophole. Insurance companies exploit loopholes to deny coverage to those they fear might develop, you know, an illness, and to rescind coverage purchased by those whose illnesses threaten the carrier's dime.

As my Thursday column states, the key to effective reform is to close every loophole -- mandate that insurers sell coverage to all buyers, for example, and mandate that every American be a buyer. That way, the insurers are deprived of the incentive to drive away more costly customers while keeping the young and the hale.

The reform bill passed by the Senate Finance Committee this week under the guidance of Sen. Max Baucus (D-Mont.), incorporates the individual mandate. But the question is whether it has created a gaping loophole by soft-pedaling enforcement. Specificially, are the penalties for evading the insurance requirement so light as to be ineffective? Many economists believe so. Herewith an analysis, along with a caution about what the consequencies might be of a weak mandate. The column starts here:

Healthcare reformers tell a wry joke about one of their number who, called to heaven, is given the opportunity to pose a single question to God.

“Will we ever have universal health coverage in the United States?” the reformer asks.

“Yes,” comes the answer from on high, “but not in my lifetime.”

The simple truth implicit in this joke is underscored by the landmark healthcare bill passed this week by the Senate Finance Committee: America is walking up the driveway of universal coverage, but hasn’t yet made it through the door.

Read the whole column.

-- Michael Hiltzik