AUTHOR’S NOTE: The factual information for this article is based on internet searches and news reports.
Obamacare, the name that President Obama encouraged people to use for the Affordable Care Act, is an outrageously destructive law that is not based on sound insurance principles. In short, it is a highly complex and costly welfare program to be funded by increased insurance premiums paid by individuals and businesses, and US government payments for expanded Medicaid coverage for the poor and large premium subsidies for lower-income purchasers (including lower-middle class individuals and families with annual income of up to $94,000) of Obamacare qualified insurance policies on the exchanges. If not substantially modified, Obamacare will soon become another imbedded welfare entitlement. A portion of the new welfare benefits are funded by new taxes. The excess is to be paid by the taxpayers or increases in the National Debt. Health insurance policies of tens of millions of individuals and employers will be required to be modified or terminated and replaced. Individuals and businesses will be forced to pay substantial increases in premiums, deductibles and co-pays to compensate insurance companies for (i) paying healthcare providers for the expanded Obamacare required benefits, (ii) eliminating consideration of pre-existing health conditions or lifetime policy limits, and (iii) under-pricing insurance to enable many millions of elderly people to purchase health insurance at below fair-market premiums for people of their age. Obamacare was designed to enable the government to create another entitlement and gain control of healthcare which represents about 1/6 of the US economy. It is reducing the quality and availability of healthcare for most Americans.
President Obama, from the time Obamacare was introduced, has assumed the role of the lead promoter, first to get it passed and then when he made it the center-piece of his re-election campaign. It was passed based on the now infamous Obamacare lies that President Obama and other Democrats emphatically repeated for more than four years in one highly publicized speech after another, namely
* If you like your policy you can keep your policy,
* If you like your doctor or your hospital you can keep them, and
* Your premiums will decline by $2500 per year.
Without President Obama’s highly publicized lies, it is unlikely that Obamacare would have passed both houses of Congress by a single vote and become the law of the land. His Obamacare lies and those related to Benghazi were also instrumental in misleading a large portion of the American voters during his re-election campaign, and contributed to his winning a second term. Yet, even today, if conservative Republicans or anyone on a Fox News program talk about his failures or his lies, he and his supporters cry foul and claim they are attacking President Obama and Obamacare because he is black or for political purposes.
President Obama was elected and re-elected as President by the voters and is entitled to the respect of the office and the benefit of the doubt with regard to the truthfulness of his statements. However, it has become clear that President Obama has questionable ethical standards. He obviously believes it is permissible and acceptable for him to perpetually campaign and repeatedly lie to the American public, stonewall Congressional investigations of government wrongdoing and, like a dictator, make changes in the laws without Congressional approval, whenever it serves him politically, or permits him to achieve his desired ends. When each of his outrageous lies is exposed he refuses to apologize or even acknowledge the falsity of his statements and adopts diversionary tactics. He often claims he didn’t know the true facts when he made the statements.
For political purposes the effectiveness of most of the detrimental aspects of Obamacare were delayed until after the 2012 presidential elections. The delay enabled President Obama to repeatedly claim credit for the hundreds of billions of dollars of benefits bestowed by Obamacare while concealing the negative aspects of Obamacare. It enabled him to repeat the Obamacare lies in his 2012 campaign speeches to mislead voters into thinking that almost everyone would benefit from and no-one would be harmed by Obamacare. Said lies and the failures of the liberal press prevented voters from discovering the personal distress it was going to cause millions of them.
Prior to the indisputable exposure of the Obamacare lies, the liberal press and the public, mesmerized by his powerful speeches promising hope and change, and wanting the first black president to succeed, seemed to be giving President Obama a free pass whenever he lied to the American people. Most people didn’t care or even pay attention if he lied or engaged in a cover up about something that didn’t affect them directly.
The Obamacare lies are different from his other lies. Obamacare has led to the pending loss of healthcare insurance, and is causing immediate harm, for the millions of individuals who are receiving notices that their or their family’s existing insurance policy will no longer be offered and will be terminated because of its failure to meet Obamacare requirements. Millions of people are learning or will soon learn that they will be unable to use their current doctor, hospital or other healthcare providers under the new insurance policies offered on the federal and state exchanges. Obamacare is also harming the lives of millions of Americans whose employment or employer-provided health insurance or full-time job has been, or within a year, will be adversely impacted.
It has become clear that President Obama was for years aware of and approved of the Obamacare laws and regulations which required almost all individual policies to be terminated or not renewed after 12/31/13. He, nevertheless, repeated his lies, time-and-time again, to deliberately mislead the voters. Now that millions of people are having the policies they liked cancelled, he is relying on the public’s general lack of understanding as to how insurance works and using a diversionary tactic by blaming the cancellations on the bad insurance companies that offered what he claims were worthless policies and cancelled them when you became ill. Americans know we had problems with healthcare insurance. Obamacare is making them worse.
President Obama has avoided telling the American people the truth about how the very substantial costs relating to Obamacare will be funded and by whom. The federal government (and ultimately the taxpayers) is obligated to pay the enormous cost of administering Obamacare, including the cost of (i) operating the federal government website and exchange, (ii) hiring navigators needed to help people understand their limited, but confusing, options and help them through the complicated purchase process, (iii) hiring the IRS agents that will have to be trained to review the applicants information and tax returns (very few of which are from taxpayers who have previously been audited) in order to determine the people eligible for and to calculate the amount of the subsidies and try to collect the penalties, (iv) inducing individuals to purchase the policies, and (v) providing Medicaid to millions of additional people. The federal government is also responsible for the hundreds of billions of dollars of subsidies to reimburse a high percentage of the premium costs of lower-income individuals and small businesses.
Administering Obamacare will be complicated and subject to fraud because of the complexity of the task, the lack of experience of the IRS agents and because many of the people claiming they are entitled to subsidies, do not file tax returns.
The government contracts with navigators are providing multi-million dollar fees to organizations that are supporters of the president and Democrat candidates. Instead of granting rewards to political supporters, returning veterans could have been given a preference for navigator jobs. We are beginning to hear of people acting as navigators who are of questionable character or competence. At least one navigator has been recorded assisting applicants in filing fraudulent information. There are privacy and security risks, including potential violations of the HIPAA laws, resulting from posting personal information on the exchange websites and giving personal information about applicants to navigators who are not required to have a security clearance.
Because of administrative incompetence the websites are not currently usable to collect premiums from anyone. President Obama says he takes responsibility for the website failures. He doesn’t tell you that the website failures resulted from poor government contracting practices and lack of supervision relating to the purchase and construction of the website and resulted in part from the changes made in the website in the final months to first gather information about the applicants and tell the applicants about the subsidies before they learn of the premium costs, deductibles and co-pays. Other than spending more money to correct it, we have received no explanation as to why our government spent over $500 million and couldn’t provide a reliable website over a three-year period. He doesn’t tell you whether he has ordered an investigation into the reason for the website failures. He doesn’t tell you that fixing the website is only going to expose the glaring flaws of Obamacare, not solve them.
Furthermore, there has been almost no discussion as to how poor people, many of whom do not have checking accounts, are going to pay the premiums to purchase the highly subsidized Obamacare insurance policies. We should not be surprised if the president suggests further increasing welfare benefits to enable them to pay the premiums. If the government advances the entire premium, hopefully it would pay the subsidy directly to the insurance companies rather than try to recover the advanced subsidies from the policy holders.
As a result of the Supreme Court decision, state participation is optional. State obligations are limited to operating state exchanges and paying for up to 10% of the greatly expanded Medicaid obligations after the initial three years. The remainder of the costs are payable by the federal government.
To pay for the federal government’s share of such costs Congress reduced Medicare funding by $700 billion and adopted 18 new taxes, including, a new 3.9% income tax on so-called high income people with incomes above $200,000 and unfairly on families with incomes above $250,000, new taxes on medical products and prescription drug producers (which may be passed on to customers), and a .9% increase in the FICA tax. The penalties, to the extent collectible, are also payable to the federal government. The new business taxes will interfere with product development, will give an advantage in favor of overseas competitors, and will over time likely be passed on to the Obamacare policy holders in the form of higher premiums.
When Obamacare was passed it contained and ill-conceived long-term care provision that would have relied on fraudulent accounting practices to make Obamacare appear to be profitable for the federal government during the first ten years. Because no reserve requirement, as would have been required under GAAP, was included, the long-term care policies would almost certainly have proven to be an economic disaster for the government over the long run. The sale of long-term care policies was eliminated after Obamacare was passed and before any policies were sold.
President Obama talks only about the benefits of Obamacare and not the cost or the harm it is causing. Few people (except for those who object for religious reasons) fail to acknowledge the value of the benefits required to be included under the greatly expanded Obamacare policy coverage. They include, among other benefits, preventive care, mental health, drug abuse, birth control and abortion services as well as the elimination of pre-existing conditions and aggregate policy limits from consideration. These are expanded benefits that are required to be covered under all Obamacare mandated policies and given on a highly subsidized basis to lower-income individuals.
President Obama is claiming that Obamacare requires better insurance for everyone. Many Americans are learning that is not true for them. Millions of people, at least temporarily, have no insurance. They are learning or will soon learn that the replacement policy offered on the exchanges (when it is available for purchase) will in most states have much higher premiums, deductibles and co-pays. The claim by President Obama that more people will be helped than hurt by Obamacare is irrelevant (and almost certainly not true). Our government should not be causing deliberate harm to tens of millions of people and forcing them, without their knowledge, to pay for enhanced insurance coverage they don’t need or want to subsidize insurance benefits for others, including the elderly and the sick.
President Obama has since the adoption of Obamacare acted like a snake oil salesman in his attempts to mislead the American public in order to help insurance companies sell Obamacare mandated insurance policies on the federal and state exchanges. He traveled around the country during and after his re-election campaign making repetitious stump speeches extolling Obamacare qualified policies. He talks about the benefits Obamacare provides for 30 million previously uninsured people, including many with pre-existing conditions who previously couldn’t get insurance except at the realistically high open market rates. He talks about the poor who will get free Medicaid, the previously uninsured low-income individuals (many of whom have been receiving free treatments and procedures at emergency rooms) who will receive substantial subsidies to lower their premium costs and the children who will be able to remain on their parents policies until age 26. In short, he talks almost exclusively about the people who will benefit from Obamacare.
However, there is no free lunch. Obamacare greatly increases the costs of healthcare insurance that the Obama administration expects to be borne by employers and healthy and young individuals who do not qualify for US government subsidies and, to the extent of the enormous subsidies, by the taxpayers. Many people have no need for the additional benefits.
President Obama doesn’t talk about who is going to have to pay for the hundreds of billions of dollars these benefits are going to cost each year. He doesn’t tell you that the true cost of providing benefits for people with pre-existing conditions (some of whom are rich) may be 10, 20 or even more than 100 times as much as the cost of benefits which will be provided for healthy people. He doesn’t tell you that Obamacare eliminated lifetime limits and requires that annual policy limits must be not less than $2 million beginning in 2014. Such high limits will drive up premiums for others.
He doesn’t tell you that certain of the high costs of Obamacare benefits were front end loaded for political reasons. It would clearly be considered as mismanagement for a business to give away free or almost free services to millions of its potential customers before it began offering such services at substantially increased prices to its other potential customers. That’s what Obamacare does. People started getting the benefits before we had any assurance (which is still lacking) that a significant number of healthy people will buy the insurance rather than become obligated to pay the penalty. Moreover, the penalty, if not collected out of tax refunds that may be due, may prove to be uncollectible.
Few people understand why so many people with pre-existing conditions did not have insurance prior to Obamacare. An insurance policy generally has a one year term. If you had an individual policy and had an accident or learned of an illness during the term, you were entitled to benefits during the remainder of the year. However, based on the amount of the premium you paid, you were probably not entitled to renewal rights under your individual insurance policy and had now become a much higher insurance risk. Insurance companies are in business to earn a profit. Prior to Obamacare an insurance company hired highly paid actuaries and designed expensive computer systems to evaluate your claims and health status. This enabled them to determine your eligibility to purchase a policy and to estimate the cost of providing you with coverage. Some illnesses or injuries require continuous expenditures. Others may be indicative of a risk of high future claims. The insurance company must cover its costs and often had little choice but to not renew your individual policy. President Obama certainly knows this, but nevertheless unfairly criticizes what he calls the bad insurance companies to try to shift the blame for the Obamacare required policy terminations to them.
Group policies are different. A group policy, of the type bought by employers, generally covers a large number of people and has a high enough premium to enable the insurance company to absorb changes of the health status of a limited number of the covered individuals as long as they remain as an employee. Alternatively, they can make a rate adjustment based on the advice of their actuaries to reflect the increased risk.
Obamacare policy purchases are currently very difficult to make because of the website failures. We are told that even if the government websites had worked flawlessly, it was anticipated that enrollment would have started slowly. President Obama, who is always campaigning, is already blaming Republicans, not one of who voted for the passage of Obamacare, for criticizing him and Obamacare and impeding the implementation of Obamacare that they have no control over. He is setting the stage to again blame Republicans after the website becomes operational in the event that healthy young and middle-class workers elect to pay the penalty and avoid purchasing insurance. He will claim for purposes of the 2014 elections that young people are starting to come on board and predict that millions more will sign up in later years. They might, but if premiums go up in later years, policies may be dropped.
He doesn’t seem to grasp or care that more people may be harmed than helped by Obamacare. He is focused on enlarging the welfare base by including premium subsidies for lower-middle class workers.He is an entitlementist who believes that expansion of Medicaid and the new Obamacare premium subsidies will become entitlements and enlarge the Democrat base of voters. He is unapologetic for having lied repeatedly to the American people and then requiring them to buy more expensive insurance on the exchanges. He is arrogantly confident that the base of Democrat voters (including those added to the welfare rolls by the passage of Obamacare) will ignore his lies and faithfully and blindly accept his unsupportable claims that Obamacare will in the long run reduce insurance costs and is serving the common good-by taking from those who have and giving to those who have not.
Many of the people being asked to carry the elderly and the sick on their backs, are young people, who have found good jobs at compensation levels that make them inelligable for Obamacare subsidies. Many of them voted for President Obama and other liberal Democrats. They are trying to pay off college loans, beginning to raise a family, or buy a car or a home. Apparently President Obama believes he can convince them that, if they overpay for health insurance for years, they will benefit in the long run from purchasing the Obamacare policies. Young people will be urged by President Obama to purchase Obamacare policies based on the promise that, when they are old, they will benefit from the over-priced policies then being purchased by the next generation. He disregards the immediate negative impact on the lives of those being asked to bear an unfair burden or on the US economy.
In an attempt to again prevent voters learning about the evils of Obamacare so that Democrats can gain control of the House of Representatives in the 2014 elections, President Obama illegally, without Congressional authority, postponed the employer mandate for a year. He knows and is trying to prevent voters from learning that, when the employer mandate kicks in, tens of millions of workers are going to lose their full-time or part-time jobs or be advised of the loss of, or a negative change relative to, their employer paid healthcare insurance. Postponing the employer mandate is enabling President Obama and his apologists to make yet another outrageously misleading claim that the people whose individual policies have been terminated represent only 5% of the population. Although some employers have started to lay-off workers or eliminate full-time jobs, most employers, who provide 80% of healthcare coverage, have not yet taken action with respect to their employer paid insurance. We have recently learned that a majority of the employer group plans will have to be modified and will face increased costs to comply with Obamacare requirements.
With all the confusion caused by the failed Obamacare website and the recent attention of the liberal news media to President Obama’s repeated lies, people are only beginning to understand or talk about the roles played by the insurance companies and the federal and state governments relative to Obamacare. The insurance companies, that qualify to sell insurance on the exchanges, will be responsible for contracting with doctors, hospitals and other healthcare providers to provide the medical services for policy holders, and to pay for their services to the extent they exceed the deductibles and co-pays. Their funding comes solely from the premiums (including the portion of the premiums reimbursed by federal government subsidies) collected from the purchasers of the Obamacare qualified policies.
The limited number of insurance companies, who have qualified to offer the policies, set the premiums (as well as the amount of the deductibles and co-pays) for each of the types of misleadingly labeled plans being offered on the exchanges (namely the platinum, gold, silver, bronze and catastrophic plans), one of which the purchasers will have to select and pay for. The differences between the plans other that the catastrophic plan is that higher premiums lead to lower deductibles and co-pays and vice-versa. The coverage under all of the plans, except the catastrophic plans, is required to meet all of the Obamacare mandates. The catastrophic plans offer reduced benefits, but are only available for people under age 30 who cannot find another plan for less than 8% of their income.
Although they will not be allowed to consider pre-existing conditions, insurance companies will be allowed to consider the greater healthcare needs of older persons. However, their pricing power is arbitrarily limited by the requirement that, despite their much higher medical care needs, the premiums for plans for the elderly cannot be more than three times the amount of those for young people. Historically the premiums paid by the elderly had a 5 to 1 ratio over young people based upon actuarial statistics. That requirement ensures that young people will be subsidizing the healthcare costs of the elderly who tend to be in better financial condition.
For insurance companies to make a profit, the aggregate premiums collected will have to be high enough to cover the payments by them to providers resulting from under charging the elderly, the elimination of pre-existing conditions from consideration, removal of lifetime policy limits and to cover the greatly expanded treatments and procedures mandated to be included in all insurance policies to be sold on the exchanges. Obamacare is designed to improve insurance company profitability by maximizing aggregate premiums from healthy and young individuals who are expected to have limited healthcare needs and are required to purchase overpriced policies on the exchanges.
Another way to reduce costs is to limit payments to doctors, hospitals and other healthcare providers. Obamacare places the responsibility for reducing payments to the providers on the insurance companies. In order to reduce cost, insurance companies, are not asking many doctors and hospitals (including some of the nation’s leading hospitals) whether they wish to participate in Obamacare networks. Even if they are asked to participate, since the insurers are squeezing the fees payable to the providers to keep premiums lower, many doctors, hospitals and other providers are refusing to enter into a contract with the exchange qualified insurers. As a result many insurance policy holders will be unable to continue to use their former doctor or hospital. It is unfair and difficult to understand (but typical of the manner in which Obamacare is being rolled out) why people are being asked to sign up to purchase policies on the exchanges before the schedule of in network doctors, hospitals and other healthcare providers is made available. Patients are going to discover that their favorite doctor, hospital or other healthcare provider may not be included in their network. They may later learn that if need a surgeon, the one they want, or the hospital or anesthesiologist they would like to use, may not be available to them. He doesn’t tell you that the negative aspects of the Obamacare mandates spread like a cancer attacking the provider networks.
Obamacare is also negatively impacting Medicare and Medicaid healthcare providers. He doesn’t tell you about the excessive, costly and often impossible to meet documentation burdens being placed on them. Such document requirements are making it difficult for them to collect payments for their services even at the approved low Medicare and Medicaid rates. Many claims are never paid and abandoned to avoid further collection costs.
Large numbers of doctors are retiring or selling out to hospital chains or other large medical groups and accepting jobs at lesser compensation to avoid record keeping and malpractice insurance costs. It is going to become more and more difficult for people with Medicare, Medicaid or an insurance policy purchased on a federal or state exchange to find a doctor or avoid a long wait for an appointment.
Doctors, hospitals and other healthcare providers who do not participate as Medicare, Medicaid or exchange network providers are going to have to offer their services for payment outside the exchanges. Private medical plans are being set up by groups of doctors, hospitals and other healthcare providers, who are not involved with Medicare, Medicaid or an Obamacare exchange, to provide healthcare services for people willing to pay an annual fee. It will be like parents who pay local real estate taxes, but are sending their children to private schools. A two tier system, one onside and one outside of the exchanges can be expected to develop.
Despite President Obama’s now infamous lie, that “If you like your policy, you can keep your policy.”, it has become clear that the exchange qualified insurance companies expected all along to be able to pay for a significant portion of the increased costs mandated by Obamacare from the increased premiums to be received from people who currently have individual insurance policies that are being terminated. There is incontrovertible proof that President Obama knew during the 2012 presidential election campaign that most of the existing individually owned policies held by approximately 15 million people would not qualify for the phony “grandfather” exemption and would have to be terminated, and that he deliberately continued to lie about it.
President Obama concealed from voters that owners of individually owned policies would be required to buy the more expensive Obamacare qualified insurance policies on the exchanges, and thereby improve the risk pool. He obviously thought the timing would be perfect. The exchange websites were expected to become available concurrently with the receipt of the first termination notices. The individuals receiving the termination notices would be desperate and would have no choice but to buy a Obamacare mandated policy on a federal or state exchange. He might have thought he could succeed in stonewalling his lies by telling people they were getting much better insurance coverage that over time would prove to be less expensive, and they would love it. The website failures made that virtually impossible.
Although millions of individuals and families received notices of termination of their existing policies, President Obama initially disregarded the exposure of his lie and tried to mislead those who are losing their insurance coverage by proclaiming that the websites would be up and running no later than November 30, 2013 and repeating his claim that Obamacare mandated insurance provides better coverage at a lesser price. He didn’t succeed in calming individuals whose policies are being terminated. Millions of people are very upset about the risk of having no insurance in force after 12/31/13 and are discovering the truth about the cost of Obamacare policies.
The outrage has been too great to ignore. Bills have been introduced in Congress to permit the terminated individual policies to be reinstated. President Clinton made a similar, and widely publicized suggestion to President Obama. President Obama, sensing a revolt from Democrats facing reelection in 2014, desperately tried for damage control in an effort to defend his signature achievement. The day before the planned Congressional vote, he proposed an unworkable solution to try to shift the blame for the policy terminations to the insurance companies. He unilaterally, and without Congressional authority, granted insurance companies, who complied with certain disclosures designed to sell exchange offered policies, the right to violate the Obamacare mandate and reinstate (for up to one year) certain of the terminated policies.
The insurance companies are under intense pressure. They know that, if they fail to extend the policies, they will be strongly criticized by President Obama. Even if some policies are extended or reinstated with the consent of state insurance commissions, doing so will cause new problems for insurance companies because (i) it will lead to a reduction in the sale of policies on the exchanges with higher premiums, deductibles and co-pays and (ii) it will lead to abuses by policy holders (seeking to obtain as many procedures and treatments as possible within the year) and insurance companies in the last year of an expiring health insurance policy. The insurance companies might have to raise the premiums for policies sold on the exchanges in 2015 to cover the lost revenues.
President Obama had previously hinted that he was considering another welfare benefit alternative, namely creating another subsidy, (which would have to be paid for by taxpayers or by increases in the National Debt) to help the owners of terminated individual policies pay the increased premiums required to buy a replacement policy on an exchange.
The employer mandate is another stealth way to increase employer premiums and lead to an increase in the number of healthy people purchasing policies on the exchanges. Although, as noted above, the employer mandate has been delayed by President Obama, businesses are hiring professional advisers to understand and seek to comply with the Obamacare employer mandate. Some will do what is best for their employees. Others will seek to reduce costs. Some employers will not be able to pay for the mandated insurance or the penalty and will lay-off workers or go out of business.
Employers are already taking steps to avoid having to purchase expensive coverage by reducing full-time and increasing part-time employment and eliminating insurance coverage for some employees or their dependents. Many employers focus on short-term profits. If employers determine it is cost-effective to pay the penalty of $2000 per employee, many millions of employees will lose their tax-free insurance and be forced to buy insurance on the exchanges or pay the penalty and live without insurance. Even if they get a raise to cover all or a portion of the cost, it will be taxable income. This is just another sneaky way to take from those who have, even if they are middle-class. In fairness, we should change the tax laws to make the payment of healthcare premiums tax-deductible, so that employees will not lose the tax-free nature of their insurance benefit and the tax benefit will be available to tax-payers purchasing their own insurance.
He doesn’t tell you that on 1/1/14 insurance premiums will go up and not down in most states. President Obama had to know that unless they were entitled to receive a large subsidy, many young and healthy people would not buy the insurance after they learned that the policies being offered to them had such high premiums, deductibles and co-pays, they would be almost worthless to them. Obamacare was, therefore, drafted to provide substantial subsidies for lower and middle-income taxpayers. The subsidies, a new welfare benefit for a large number of individuals and families, made the insurance premiums more affordable. The entitlementists do not care that the taxpayers are going to have to pay for the subsidies. Of course, even the premium subsidies may not make the insurance affordable for a large number of people because of the large deductibles and co-pays.
President Obama is still claiming that if everyone complies with the mandate and purchases overpriced Obamacare insurance policies, the premiums will be reduced. He is prepared to wage an all-out campaign to get them to do so. However, even if a large number of healthy people who are not eligible for a subsidy wind up being cajoled into buying Obamacare qualified policies in the coming years, the cost of providing the extra coverage may be underestimated or the insurance companies may choose to make higher payments to providers to improve care or to keep the extra revenues as profits. It is unlikely that premiums will be reduced.
As was the case in past years, if providers render services without requiring a cash payment to cover the unpaid deductibles and co-pays, the insurance company will reject that portion of their claim. Providers will then have to bill and try to collect such amounts from the patient. In recent years the losses from unpaid claims (including collection costs) have grown to over $40 billion. It is like to rise significantly as a result of Obamacare.
He doesn’t tell you that, whether or not the exchange websites are functioning, Obamacare is going to cause chaos and harm for patients and providers beginning in January, 2014. The insurance of millions of patients will have been terminated and many will not know it or will fail to tell the providers. If they have no insurance, they will have to pay cash (except at an emergency room) or extended credit by the provider. Even if a patient is covered by a policy purchased on an exchange or a current policy is renewed, there will be large deductibles and co-pays, and providers will be at their peril if they offer services except for a cash payment to cover both the unpaid portion of the deductible and the co-pay.
Many patients will not be able or willing to pay cash and will be denied and go without treatment. As a result, providers are likely to face both a significant revenue decline and an increase in uncollectible fees. There is a question as to whether a person, who was unable to purchase insurance because of the website failure, who buys a policy after paying cash to a provider for a treatment or procedure, should receive credit toward the deductible or possibly a refund of the excess payment.
To get insurance companies to support the adoption of Obamacare, it offers additional protection to the insurance companies against adverse enrollment by requiring an additional premium to be paid during the first three years by all qualified policy purchasers (except to the extent that certain union plans may receive an exemption from President Obama to reward their political support). The insurance companies also have the comfort of knowing that if the have an adverse enrollment because healthy people do not buy the insurance and pay the penalty, they can raise the premiums next year and each year thereafter.
Many providers will require Obamacare policy holders to pay the full amount of the deductibles in advance (other than at an emergency room). Because the deductibles are so high, the owner of a Obamacare insurance policy may not seek medical treatment to avoid paying the deductibles. If they incur a catastrophic illness or injury while uninsured they will be able to purchase insurance, without consideration of pre-existing conditions, on the next enrollment date. Has anyone every heard President Obama talk about the high deductibles or co-pays of Obamacare mandated policies?
He doesn’t tell you the reason they included penalties was to punish people who elected not to make the mandated purchases of unfair and overpriced Obamacare mandated policies. He doesn’t tell you about adverse selection which might cause a “death spiral” leading to repeated premium increases because many of the people who rush to sign up will be older or sick people. He doesn’t tell you that each person who signs up for Medicaid reduces, by one, the number of poor people who might have improved the risk pool by purchasing a government subsidized Obamacare policy from an insurance company.
We have for many years prior to adoption of Obamacare required healthcare services to be provided at hospital emergency rooms, regardless of the ability of the patient to pay. He doesn’t tell you that low-income people who can’t find a doctor for themselves or their children at 2:00 or 3:00 A.M will go to a hospital emergency room, as they previously did, to get treatments and procedures they probably will not have to pay for. He doesn’t tell you about the unpaid treatments for illegal immigrants that are being provided and will continue to be provided at hospital emergency rooms. He doesn’t tell you that hospitals will have to find a way to pass on the uncollectible fees, including, uncollected deductibles and co-pays as they did in the past. If the hospitals are under contract as Obamacare providers for policy holders, they will try to negotiate to charge higher rates for those who pay, leading to higher insurance premiums. If they have no contracts with insurers, they will have to charge higher fees for their patients who pay them directly, or seek government assistance.
Most Americans agree that everyone should have access to adequate healthcare. Obamacare’s socialistic concept of requiring costly high-grade insurance to be made available for everyone, including people receiving very highly subsidized policies, should be reconsidered. Based upon the current size of the GDP we can’t afford to be so generous.
Properly pricing insurance is a game played by actuaries and is regulated at the state level. Obamacare drastically changes the rules of the game. Now that they are learning the truth about Obamacare, most Americans, if asked, will tell you they do not want to greatly over-pay for their healthcare insurance, as required by Obamacare, for benefits they do not need or want, to offer highly subsidized premium policies for lower-income people or to reduce the insurance costs of the elderly and the sick.
Republicans didn’t vote for Obamacare and have for more than four years demanded that it be repealed. Rather than defend Obamacare, Democrats create a smoke screen by arguing that the Republicans do not have an alternative plan. Returning to the system we had before, with all of its faults, would be preferable, but has been made impossible by Obamacare. The damage being caused by Obamacare cannot be reversed, but can be mitigated.
There are many actions we can take, many of which have been proposed by Republicans. We can ask the assistance of insurance actuaries, hospital administrators and doctors in undertaking a thorough bi-partisan review and revamping of Obamacare and American healthcare. As contemplated by the House bill, we could allow private healthcare insurance policies to be sold in competition with exchange mandated policies.
Pre-existing conditions have been a major healthcare problem that have caused hardships for people who have lost their jobs, their employer coverage, become ill or injured or are treated unfairly by an insurance company. We could have dealt with them over time without causing an immediate transfer of the cost of the risk to businesses and healthy individuals (including young people). We could have required insurance companies to offer better forms of catastrophic insurance for people with pre-existing conditions that required them to pay higher premiums, deductibles or co-pays (as some of them were doing under high risk plans that have been terminated). The higher premiums, deductibles or co-pays might have been partly subsidized and phased out, in whole or in part, over a period of years to eliminate the shock of doing so immediately. Such changes would have encouraged people with known extra healthcare needs to make an effort to limit their healthcare expenditures. Similarly, the forced removal of life-time limits, could have been dealt with on a case-by-case basis rather than eliminating them. People who have no stake in the game can be expected to demand excessive medical treatments and procedures.
Alternatively, we can require insurance companies to offer automatically renewable insurance, with higher premiums to reflect the actuarially calculated risk, to those who elect to purchase a policy to protect against future injury or illness. We can require insurance companies to offer individuals an opportunity to participate in group policies, similar to those offered under business group policies, which allow renewals for people who acquire pre-existing conditions. Insuring against becoming ill or injured may be better handled through the sale of a type of disability coverage.
Wealthy people have for years made very large charitable contributions to build hospitals and fund the purchase of ever improving medical equipment to enable the US to have the best hospital networks in the world. We can turn to our billionaires to voluntarily contribute to the development of world-class clinics (of the type contemplated under Obamacare) in or near hospitals, to provide excellent healthcare services for rich and poor at costs significantly less than emergency room costs.
We can make Obamacare more provider friendly to improve, not destroy, our healthcare system. As a start, we can reduce excessive record keeping requirements of doctors and pay them fairly for their services. We can restrict medical malpractice claims and limit the amount of judgements, except for grossly negligent or deliberate injuries, to a recovery of medical costs. Whether or not Obamacare remains in force, the maximum liability should be limited to the estimated cost of future insurance premiums, deductibles and co-pays. We can make the sale of insurance more competitive, possibly by permitting insurance to be sold across state lines.
Obamacare was adopted during the Great Recession, shortly after the passage of what turned out to be a failed stimulus plan. It was hastily passed a time when we should have concentrated our stimulus spending on growing the economy and not increasing welfare programs and backing of green energy projects that created few jobs and failed. If we had created millions of tax-paying jobs and grown the US GDP at a 4% to 5% rate it would reduced our federal deficits and have made our healthcare costs more affordable. Instead of adopting Obamacare we should have been working on fixes to reduce the $90 trillion of unfunded liabilities of our important Social Security and Medicare programs to insure that they will be available for current and future beneficiaries. In addition to revamping Obamacare we should be undertaking an effort to modify Medicare for people under age 50 or 55.
Obamacare is a law designed to cause havoc in the healthcare marketplace and add hundreds of billions and possibly trillions of dollars to annual healthcare costs. Fortunately, the immediate harm to the economy may be offset, in part, by the stimulative economic effect of the additional healthcare payments (if made) to doctors, hospitals and other providers for services rendered to Obamacare qualified policy beneficiaries. President Obama, who will probably blame the decline in availability and quality of benefits on the insurance companies, should encourage them to arrange for the exchange qualified policies to offer the services of our best healthcare providers.
If, as is likely, Obamacare becomes a train wreck, liberals will seek to convert it into a single payer system to eliminate the insurance companies. This will enable the federal and state governments to take control of and incompetently run the healthcare system and pay for it by further increasing taxes on the middle-class and the rich or by increasing the National Debt. Rather than a single payer system, we should consider giving our major hospital networks the opportunity to create their own insurance programs.
The US economy has struggled during the Obama presidency. President Obama inherited the Great Recession, but has managed an inadequate recovery. His stimulus programs have failed to create an adequate number of full-time, tax-paying jobs. Rich people, security investors and corporations have benefitted from increasing stock prices fueled by the low-interest rate policy and QE purchases of the Fed. The Fed has repeatedly stated that it needs to continue QE because of the inadequate fiscal stimulus. There is a growing anger and jealousy among the poor, lower-income and middle-class Americans who are not participating in the recovery except to the extent that they are receiving, and becoming dependent upon increased welfare benefits. However, welfare entitlements, that are being greatly expanded by the adoption of Obamacare, are negatively impacting the self-esteem and work ethic of the poor, threatening the survival of the middle-class and jeopardizing the continued greatness of American capitalism.
The gap between the disposable income (after income tax and healthcare costs) of full-time middle class workers and the value of welfare benefits (including those receivable under Obamacare) when added to the compensation from a part-time job (including negative income tax), is narrowing. Instead of adopting Obamacare, we should have concentrated our efforts on creating full-time tax-paying jobs to repair and upgrade our transportation infrastructure and strengthen our national defense and homeland security.