The health care reform bill about to hit the floor of the U.S. Senate promises to cover millions more Americans by subsidizing their purchase of insurance. The bill would force every American to be covered.

This mandate is borne of good intentions: Healthy, young people need to be a part of the insurance pool so that the costs of insuring everyone are spread fairly. But a mandate is only effective if it actually compels people to get coverage. The test is whether subsidies are generous enough and penalties for ducking the mandate tough enough to ensure compliance.

Unfortunately, the bill that emerged this month from the Senate Finance Committee fails on both counts.

Estimates by the Congressional Budget Office indicate that at some income levels, buyers on the new insurance exchanges would be expected to lay out 18 percent to 19 percent of their income when both premiums and out-of-pocket expenses are counted. A family of four with an annual income of $54,000, for example, could expect to pay $4,800 a year for a low-cost "silver" plan envisioned by the Senate Finance Committee bill plus another $5,100 for other medically related expenses.

Because of the way the subsidies phase out, if that same family manages to earn an additional $12,000 the next year, the cost on the exchanges would jump $2,800 annually, which could be a disincentive to seek better-paying work.

Feel like skipping coverage? The penalties are light. An excise tax wouldn't kick in until the second year and then would be phased in over four years before reaching a maximum penalty of $750 for each adult in the household.

Seven-hundred fifty dollars isn't nothing, of course, but it isn't a big enough bite to discourage cheating. And when combined with the skimpy subsidies, it's a good bet that many people who don't buy insurance now still won't bother to seek coverage after the bill becomes law.

The insurance industry made the same point last week when it released its now-discredited survey that purported to show big premium increases under the Finance Committee bill. The industry-funded survey was bogus; the industry's observation was not.

The full Senate should beef up subsidies for middle-income Americans and strengthen penalties for forgoing insurance. If there is to be a mandate, it needs to be a strong one.

— Milwaukee Journal Sentinel

- - -If you have a few black marks on your credit history, you'll probably pay more to insure your home or car than your creditworthy neighbor even if you're a good driver or responsible homeowner.If this sounds unfair, it is.A recent analysis of insurance industry data by the Dallas Morning News found that a poor credit report, on average, costs consumers 35 percent more on home and auto insurance. In some instances, the analysis noted, such insurance rates more than doubled for people who had poor credit, even if they had claim histories similar to their neighbors.These findings call into question the insurance industry's longstanding contention that credit scoring isn't a major factor in insurance rates. They should push state lawmakers to review — and possibly ban — the use of credit scoring to set insurance premiums. Lawmakers should demand to know how much credit scores — never designed to determine whether a person would be a good or bad insurance risk — add to soaring premiums.Insurers say credit measurements help identify high-risk customers, who should pay higher premiums. They regularly cite research that drivers and homeowners with lower credit scores tend to file more claims. Without credit scoring, insurers say, everyone would pay higher rates.Yet credit scoring is far from an exact science and hurts customers in unexpected ways. When credit card companies reduce credit limits, as many have done during this recession, the percentage of card debt relative to the new limit increases. Consumers could suddenly be charged higher insurance premiums for something beyond their control. Also, there is evidence that minority and low-income customers are particularly vulnerable to sudden insurance rate increases triggered by credit scoring.California and Maryland are among a handful of states that have banned credit scoring by insurance companies, and the Michigan Supreme Court is reviewing the practice. Texas came close to banning it in 2003, but the Legislature opted to impose limits, such as prohibiting insurers from penalizing consumers for a thin credit history or using unpaid medical bills or major life crises in rate-setting decisions.Now, the Legislature must address this issue to make sure that homeowners and drivers aren't being penalized unfairly. Credit scoring has its purposes, but setting insurance rates is not its highest, best or fairest use.— The Dallas Morning News