Seriously, with no exclusions for pre-existing conditions, no raising of rates if you get sick, and no lifetime maximums - how are "insurance" rates not going to rise?<p>This smells like a "let's bankrupt all the private insurers" and then let government swoop in and finally nationalize the rest of the healthcare system to fill the void.
Change the rules and people will behave accordingly. The most obvious effect I foresee is that employers who can't afford insurance will try to avoid growing to have 50 employees. This isn't because the employer is evil, it's because that one extra employee will cost salary + $40k in penalties, and probably get him labelled as an exploiter of the working class. That should do wonders for the economy.
50 employees isn't that special of a number, because you also have to have 30 of those employees buy subsidized health insurance from the state marketplace. Even then you only pay the 2k penalty for each person above that.<p>If you have 80 employees and 40 get the subsidy your total penalty is 20k. If your annual payroll is $4,000,000, $50k per employee, this is .5% of your payroll