There's a reason Fitch has us on negative credit watch. Too much spending! Obamacare will cost over $1 trillion over the next 10 years according to the CBO.
Obamacare will add $5 trillion to the deficit over 10 years (my estimate). I hope Obama never learns that there are numbers above a trillion. Namely with quadrillion, which is a thousand times one trillion.
Obamacare was designed to give people insurance that had no coverage. But there was already ways to get coverage. For instance, if you were too poor to afford coverage, there was Medicaid. And if you had money and did not qualify, you could start a group health insurance plan of 1-2 people or get into the state high risk pools that existing before Obama's PCIP program.
Ironically, Obamacare is making Medicaid fiscally unsustainable, and greatly impacting health insurance premiums. The premiums that people will be forced to pay in order to obey the mandate.
Freedom of Choice
Some people believe insurance is the reason for our high cost health care system. Many think healthcare should not be covered by insurance. The D.C. court stated that "The right to be free from federal regulation is not absolute and yields to the imperative that Congress is free to forge national solutions to national problems."
But people naturally want to have a choice of doctors, and want a quality of care that addresses the disease or injury and you as a human, not a "unit." People also want freedom of choice in the type of health insurance they buy. Obamacare reduces the number of choices you have available to you, by placing limits on HSAs, HDPs, FSAs, & health insurance Co-ops.
Exchanges offer 4 plan options. This was by design. Because Big Government has problems walking and chewing gum, they could not be asked to administer all the different types of plans private health insurance does every day.
Medicare is a social insurance program administered by the United States government, providing health insurance coverage to people who are aged 65. To help find the billions that Obamacare will cost, over $500 billion in future payments was taken from Medicare and reallocated to Medicaid. Medicaid reimbursements to doctors are notoriously low, and may not find they can't operate a practice on many Medicaid patients.
Americans are independent. Of course, that's how we got started. Forcing Americans to buy a private product from private company, simply will not work. They will not do it. Supporters of Obamacare like to make the car insurance analogy. But that is a poor one, because in many states up to 25% of drivers go without car insurance.
The comparison made is made so often, I wrote a presentation comparing Car Insurance and the Affordable Care Act.
Obamacare levies a very innovative new tax on big pharmaceutical companies. They charge a percent of the gross revenue. So it doesn't matter that the drug company spent 10 years and $1.2 billion developing a drug, the net profits don't matter, only the gross revenue for purpose of taxation. Almost like having the drug companies exist to pay big government.
Because insurance companies want to be invited onto an exchange, and their business will be micromanaged by the state and do you have estate just, there'll be far fewer choices for consumers. Less competition means higher prices. Are people paying enough for health insurance already?
Independent Medicare Advisory Board
The IMAB in the group of unelected bureaucrats to decide what EHBs or essential health benefits will be. Before you could decide by buying your health insurance to one company or another. As long as you remained healthy, you would not be locked in to using one carrier. You could change the benefits inside your current health carrier, or switch to a carrier that offered the policy features you needed.
With Obamacare, a government employee 3300 miles from here in Washington DC is to decide what is essential for you and what is nonessential.
The problem with essential health benefits is the diversity of Americans. Different people have different healthcare needs. When you lump everyone into the same box, many people will not fit.
Health Care Rationing
It's great to want to give everyone health insurance, but the fact is, many don't want or need it. And many can afford the coverage. Obamacare used adjusted gross income (also known as net income) to decide if you can afford coverage. The problem is, Americans were not sitting around saving 100% of their net income waiting for the government to mandate they buy health insurance.
For instance, maybe someone has high child support payments. Many have credit card debt, or student loans, or home and auto insurance payments, or all the above!
Obamacare illustrated that the writers of the law did not understand insurance. Insurance is used to offset catastrophic losses. Not cover the 1st dollar of many losses. The insurer could not make money, and hence go out of business that way. If the US attempts to operate in this way, will we also go "out of business" with a worthless dollar.
We think when government makes someone do something, it is for good. Like cleaning up an oil spill or righting a wrong. But when government gets involved in private insurance, telling them who they can and cannot do business with, problems rise.
Not only does government make us buy the insurance, they tell the insurer they must take us. if you have two unwilling participants in a transaction, is that something that will last? No, because premiums can and will spike.
Medical Loss Ratios
Mandating insurance carriers spend 80-85% of their premiums on healthcare will not reduce healthcare inflation. It just mandates the insurers spend more! 77% of the small group insurance are already operating under the MLRs, however that is without guaranteed issue.
Don Berwick, the departing head of Medicare and Medicaid said that 20-30% of government healthcare spending is wasted. Yet government mandates private insurers can only waste 15%?
If health insurers had figured out a way to cap healthcare inflation, they would have long ago, especially since they could have lined their own pockets.
Obamacare raises $700 Billion in new taxes to pay for his pet socialist experiment. Where will that money come from? Big Pharma? Big Insurance? No! Ultimately you and I. Trickle down cost. To compensate for a higher tax bill, Insurers have to raise the rates much higher.
The new taxes on Pharma and insurance are based on a % of revenue, not net income.
Obamacare basically outlawed future doctor owned hospitals. Since they would not have Medicare certification; the ability to treat Medicare recipients.
A much cited success story is Massachusetts. Mitt Romney legislated universal healthcare aka Romney care in Massachusetts in 2008. Now they have the third highest health insurance in the country, and highest healthcare costs per resident. Many Massachusetts residents still do not have healthcare or health insurance. Massachusetts has what is known as the jump and dump. It's very simple, but will lead to the death spiral (insurers going out of business) due to adverse selection, or insurers paying claims for very sick people.
The problem is very sick people will be happy to pay the relatively low penalty in relation to the relatively high health insurance premiums, until they actually need the expensive treatment or procedure. Then you enroll or simply wait until the open enrollment period, then get health insurance. Pay your premiums until your treatment or procedure is done, and then cancel your coverage.
There is no way that health insurance carriers can survive in this environment. To add insult to injury, the government legislated MLR's or medical loss ratios, where the insurer must pay 80-85% of their gross revenue out of medical claims. If the jump and dumpers are pervasive, the cap on medical loss ratios will not be an issue.
Return your subsidy
If you start out making very little and getting subsidies from health insurance through the exchange, you might have to pay back between $250-2500 of the subsidies you receive. The trick is to be successful. Not only does Obamacare reward failure by taking millions of Americans off private insurance and put them onto Medicaid. The PPACA also requires you pay some of money back if your income goes up over certain maximum limits.
The subsidies are structured in a way that does not benefit married couples nearly as much as singles. Read what you want into it.
Electronic Health Records
I won't quote all the instances and evidence where classified and top secret material ended up on the internet (Wikileaks?), but if it can happen there, are your medical records safe?
How can you profit from the coming legislation?
If you reduce the decision to be insured medically to a math formula (patriotism and morality aside) barring an emergency, you will come out way ahead to claim jump into the state run exchanges.
Do the math. For single people making up to $275,000, and it will still pay to jump and dump Obamacare. The PPACA mandates Health Insurers must accept you. That income range covers about 98.5% of the American population as of the census, 2005.
Recommended Obamacare / PPACA / Affordable Care Act Links: