Already healthy? Baucus bill insures you for two years — for only $200.

The health insurance reform bill that passed out of committee yesterday does not include the public option, which insurers rightly insist will put them out of business with its dramatic underpayments to doctors and hospitals.

So absent that provision, what could be so wrong with the bill from Sen. Max Baucus, D-Mont., that America's health insurers started dumping on it this week, even though they stand to reap huge profits from most of President Obama's other reforms?

Insurers love the idea of compelling people to buy their product or else pay a fine. But the fine in Baucus's bill is so small that it creates a loophole. In 2013, when it takes effect, you could easily game the system and save thousands of dollars.

As John Lott points out, Baucus's bill forbids insurers from turning you down because of your pre-existing conditions. That means effectively that you're always insured — whether you pay premiums or not. If you don't mind paying for the occasional emergency, you could simply drop your health insurance, saving thousands of dollars annually, and pay the statutory penalty instead. If you happen to get cancer or get pregnant, you can just buy insurance after it happens.

The penalty under Baucus's bill is low, and it even phases in gradually over the first five years — $0 in 2013, $200 in 2014, and on up to $750 in 2017 and thereafter.

This is why insurance companies, while supportive of President Obama's efforts generally, are upset about the Baucus bill. They have no problem with state compulsion so long as it works to their benefit, but Baucus's bill would probably increase the number of uninsured Americans by providing obvious financial incentives to game the system.

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