Monday, October 12, 2009

Isn't America under Obama great?

In case you missed it, Obama has proposed a new auto insurance reform plan with a public option. There are millions without auto insurance that need to be protected and it is not fair that they are not covered. The unfortunate who do not have documentation to prove they are American citizens must be also able to share the American dream of a car in every garage or front yard. Although children of the undocumented who are born in the United States would qualify for auto insurance, they may be too young to get a driver’s license at present.

Under Obama’s plan a Federal Auto Reform Tribunal (FART) will be established that will determine federal standards for what vehicles may be covered (for example, it may be that only "green" cars can be insured), and rules for what auto insurance coverage may be available and to whom, e.g. what vehicles may be insured and what repairs may be included. FART will also determine whether private insurance policies meet federal standards; only policies that meet these standards can be sold. Though FART will only make recommendations, once approved by the Secretary of HEW the recommendations will become law.

The Obama Insurance for National Coverage (OINC) reform plan focuses on late model vehicles. Clunkers, cars that have seen better days and usually require more repair at that stage of their life, will only qualify for reduced coverage and repairs because the cost of repairing the clunkers comprises the greatest amount of repair costs.

Auto insurance will be mandatory; everyone will be required to buy insurance. It has not yet been decided whether those not owning cars will also have to pay for national auto insurance under OINC. Anyone not buying auto insurance must pay an annual fine in an amount intended to encourage purchase of insurance. (Of course, fines for families will be greater than for individuals.)

So as to not be burdensome for those with low income, those with incomes under a maximum amount (to be determined) and members of ACORN will be reimbursed by the government for the cost of insurance. High income earners (earners who don’t qualify as low income earners) will pay an extra surcharge to assure OINC is made available to all and reduce the overall cost of OINC so the Congressional Budget Office (CBO) will be able to report a lower overall cost of OINC.

In order to insure fairness, and help pay for OINC, private insurers offering auto insurance with coverage which exceeds the federal standards and those buying such insurance will have to pay a tax to make up the difference.

The Internal Revenue Service (IRS) will enforce OINC to make sure everyone pays their fair share.

OINC also includes a government, or public, option that offers auto insurance that will compete with private insurance for the purpose of offering competition to state-limited private insurance companies. The government insurance will compete against private companies that are unable to sell across state lines. Since government enterprises are not required to make a profit, it is anticipated that government auto insurance will cost less than private insurance so those seeking to reduce their auto insurance cost will likely switch their insurance to the OINC, thus assuring that in time only the government option will exist as private companies cease to sell auto insurance.

Americans have often complained that private insurance company employees are too often difficult to deal with. OINC will offer everyone an alternative by allowing people to deal with government employees (sometimes referred to as government bureaucrats). This arrangement has the added advantage of increasing employment (albeit government employment) since a very large bureaucracy will have to be created to service OINC.

Another public complaint has been that insurance companies do not cover preexisting conditions. When insurance coverage is really needed because of prior injury, insurance companies refuse to offer coverage; and this is simply unfair. Probably the greatest benefit of OINC is that it remedies this situation by requiring auto insurance to cover preexisting conditions.

Under OINC if you have a car that has been injured you will be able to get auto insurance to cover repairs of the injured vehicle. It does not matter whether or not you have had insurance at the time of the injury; you will get the needed coverage and reimbursement for repair after the injury. No longer will car owners fear that they will not be able to afford putting their vehicle in like-new condition because they are unfortunately unable to afford the cost.

Isn’t America under Obama great or what?


Lord Mar said...

Pardon my 2cents of comments.

I like the idea of compulsory auto insurance. In fact, here in Singapore, it is mandatory to have one. Accidents can happen anytime, and it's a good move to get one's vehicle covered.

As for the part of '...It does not matter whether or not you have had insurance at the time of the injury...': Well let's say if I were to put myself into the shoes of an insurance company, this is quite intimidating.

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