Buy Insurance or Go to Jail?

ABC News' Teddy Davis reports:

The debate over whether the federal government should require all Americans to carry health insurance is heating up.

The latest spark is a letter that Thomas Barthold, the chief of staff to the nonpartisan Joint Committee on Taxation, sent Thursday to Sen. John Ensign, R-Nev.

Given that the health-care bill written by Finance Committee Chairman Max Baucus contains a $1,900 fee (or excise tax) for not buying health insurance, Ensign wanted to know what would happen if an American didn't pay the penalty.

In a handwritten letter, Barthold told Ensign that under an existing provision of the Internal Revenue Code, willful failure to pay a fine can result in being charged with a misdemeanor which could carry a penalty of up to $25,000, or up to a year in jail, or both. The handwritten letter was a follow-up to an answer that Barthold gave Ensign during Thursday's mark-up of the Baucus bill.

Barthold felt that he was not as thorough during the hearing as he could be after considering the Internal Revenue Code.

During last year's campaign, then-Sen. Barack Obama, D-Ill., opposed an individual mandate. In fact, he clashed repeatedly with Sen. Hillary Clinton, D-N.Y., his future Secretary of State, on this issue.

Since becoming president, however, he has switched his stance and now shares Clinton's view that an individual mandate is necessary in order to achieve new federal protections for individuals with pre-existing conditions.

Pointing to experience at the state level, the insurance industry and other health-care experts persuaded Obama that insurers could not go along with a guanteed issue policy without knowing that all adults would be forced into the system.

Insurers say that if you have guaranteed issue — which means no discrimination on the basis of pre-existing conditions — without an individual mandate, people will wait until they become sick to buy insurance and the system will fail due to a lack of risk sharing.

Advocates of an individual mandate say that a requirement to buy insurance is essential because everyone is currently paying a “hidden tax” when people show up in the emergency room without insurance. (Under existing law, emergency rooms are required to treat urgent care matters without regard to ability to pay. If the patient cannot afford the bill, those costs are then passed to the government or people who have insurance in the form of higher prices).

When considering the possible jail penalty, it should be noted that President Obama envisions an individual mandate being structured with some sort of hardship exemption.

The Baucus health-care bill being considered by the Senate Finance Committee would exempt individuals who meet a government defined “unable to pay definition”. There would also be an exemption for people whose religion conflicts with the mandate.

Despite the fact that there is broad support for an individual mandate among Democratic politicians, the insurance industry, many experts, and even a few Republicans, Barthold's letter potentially hands the GOP a big new weapon in the fight against Democratic efforts to overhaul the nation's health-care system.

View Barthold's letter to Ensign by clicking HERE.

It was scanned by Ensign's Senate office and provided to ABC News. The accuracy of its contents was confirmed by the nonpartisan Joint Committee on Taxation.

Buy Insurance or Go to Jail?

ABC News' Teddy Davis reports:

The debate over whether the federal government should require all Americans to carry health insurance is heating up.

The latest spark is a letter that Thomas Barthold, the chief of staff to the nonpartisan Joint Committee on Taxation, sent Thursday to Sen. John Ensign, R-Nev.

Given that the health-care bill written by Finance Committee Chairman Max Baucus contains a $1,900 fee (or excise tax) for not buying health insurance, Ensign wanted to know what would happen if an American didn't pay the penalty.

In a handwritten letter, Barthold told Ensign that under an existing provision of the Internal Revenue Code, willful failure to pay a fine can result in being charged with a misdemeanor which could carry a penalty of up to $25,000, or up to a year in jail, or both. The handwritten letter was a follow-up to an answer that Barthold gave Ensign during Thursday's mark-up of the Baucus bill.

Barthold felt that he was not as thorough during the hearing as he could be after considering the Internal Revenue Code.

During last year's campaign, then-Sen. Barack Obama, D-Ill., opposed an individual mandate. In fact, he clashed repeatedly with Sen. Hillary Clinton, D-N.Y., his future Secretary of State, on this issue.

Since becoming president, however, he has switched his stance and now shares Clinton's view that an individual mandate is necessary in order to achieve new federal protections for individuals with pre-existing conditions.

Pointing to experience at the state level, the insurance industry and other health-care experts persuaded Obama that insurers could not go along with a guanteed issue policy without knowing that all adults would be forced into the system.

Insurers say that if you have guaranteed issue — which means no discrimination on the basis of pre-existing conditions — without an individual mandate, people will wait until they become sick to buy insurance and the system will fail due to a lack of risk sharing.

Advocates of an individual mandate say that a requirement to buy insurance is essential because everyone is currently paying a “hidden tax” when people show up in the emergency room without insurance. (Under existing law, emergency rooms are required to treat urgent care matters without regard to ability to pay. If the patient cannot afford the bill, those costs are then passed to the government or people who have insurance in the form of higher prices).

When considering the possible jail penalty, it should be noted that President Obama envisions an individual mandate being structured with some sort of hardship exemption.

The Baucus health-care bill being considered by the Senate Finance Committee would exempt individuals who meet a government defined “unable to pay definition”. There would also be an exemption for people whose religion conflicts with the mandate.

Despite the fact that there is broad support for an individual mandate among Democratic politicians, the insurance industry, many experts, and even a few Republicans, Barthold's letter potentially hands the GOP a big new weapon in the fight against Democratic efforts to overhaul the nation's health-care system.

View Barthold's letter to Ensign by clicking HERE.

It was scanned by Ensign's Senate office and provided to ABC News. The accuracy of its contents was confirmed by the nonpartisan Joint Committee on Taxation.

ABC News’ David Chalian Reports:

A top leader of the nation’s labor movement upped the anti-health insurance company rhetoric coming from much of the left in the current health care reform debate.

“There was a lot of talk about death panels,” AFL-CIO Secretary-Treasurer (and the organization’s presumptive incoming president) Richard Trumka told us on ABC News’ “Top Line.” “Well there are death panels out there, they’re called the insurance companies,” he added.

Mr. Trumka has been a leading Democratic voice warning President Obama and his administration not to accept a health care reform bill without a public government-run health insurance option as a part of it.

He didn’t back down from that position today and appeared unimpressed with the idea of a delayed public option that only gets triggered if the private health insurance companies are unable to significantly bring down costs and expand coverage once health care reform legislation becomes law.

“Well, Trigger was a great horse and I’m sure Dale and Roy really liked Trigger,” joked Trumka. He went on to express concern about when such a triggered public option would take effect. “How far down the road? And what do we say to those people?,” he asked. “Is it 10 years down the road? Is it 8 years down the road? What do we say to every American that declares bankruptcy every thirty seconds because of this?,” he added.

The labor leader attempted to alter the terms of the health care debate we’ve seen play out across the country throughout August by keeping the focus on the current practices of health insurance companies in a less regulated marketplace. He cited an average of 32% of denied insurance claims from three of the largest health care providers in California over the last 7 years as an example.

“We need the public option to force them to become more efficient, more innovative and to break that stranglehold that they have on healthcare in this country,” Trumka said of the insurance companies.

Mr. Trumka also weighed in on immigration reform. The labor community has proven reluctant to join many of its Democratic brethren in Congress in support of comprehensive immigration reform legislation that was eventually rejected in 2007.

“We have a panel out, it was headed by a former Secretary of Labor, that I think is a perfect thing. It makes sure that people are treated humanely, that employers can’t exploit people that come into this country and it’ll solve the problem. It takes care of my members but more importantly, it takes care of the problems for the country itself,” said Trumka.

Watch the entire interview with Richard Trumka HERE:

We also chatted with Politico’s Jonathan Martin about what is behind the strategy shift at the White House and who makes up President Obama’s target audience for his big speech next week.

Check out the entire interview with Politico’s Jonathan Martin HERE:

Govt. Insurance Option Under Attack

ABC News’ Teddy Davis reports:

As President Obama prepares to convene a health-care summit on Thursday, a conservative group has launched an ad campaign with the goal of defeating a government insurance option.

“My concern is that it would be too broad, too expensive, the government would underprice it and then drive everyone else out of the market,” Richard Scott, the head of Conservatives for Patients’ Rights, tells ABC News.

Creating a government insurance option that would operate alongside private insurers has emerged as a major flashpoint in the nascent health-care battle. Obama endorsed a public option during his presidential campaign and leading Democrats want to make sure that it survives.

“The thing that’s worth going to the mat over is the public entity because that is what the bill lives or dies on,” former Democratic National Committee Chairman Howard Dean told ABC News. “If the health insurance industry gets to write the bill, it will not be in there, and if that happens, we will not have done health reform.”

Conservatives worry that letting Americans enroll in a government insurance option would undermine private insurers because the government could set its reimbursement rate schedule below market prices.

Conservatives for Patients’ Rights is spending $500,000 on the first round of an ad campaign that includes cable television (Fox and CNN in Washington, DC), radio ads (Rush Limbaugh and Sean Hannity shows) and Web ads (FoxNews.com and Politico.com). More ads are expected to follow.

While the head of Conservatives for Patients’ Rights explains that his group wants to block a government insurance option from being enacted, the group’s first ad does not directly criticize such an approach.

Instead, it focuses on the positive principles of choice, competition, accountability, and personal responsibility; the “four pillars” it would like to see included in any reform package.

Watch the ad here.

ABC News’ Ferdous Al-Faruque contributed to this report.