President Obama and those supporting Obamacare (the Affordable Care Act) are claiming victory and success with 8.1 million having allegedly signed up for the program. There are many questions about this number, its importance and whether it is a “victory” at all:
1. How many of these really signed up by making their first payment? One big insurance company reported a 20% nonpayment rate. If this is going to be the average then only 6.4 million actually signed up.
2. How many signed up because of the tax penalty?
3. How many were bumped off their original policies and had no place else to go?
4. How many got subsidies? If Obamacare isn’t going to be a taxpayer burden, there has to be a very substantial majority who pay the full premiums. If an overwhelming majority got subsidies then the government will have to borrow money it doesn’t have to pay for these. Insurance rates will skyrocket in 2015, 2016 and beyond if this happens.
5. How many younger people signed up? There is the strategy that the healthier young will subsidize the less healthy older citizens. There are two problems with this:
a. How many younger people signed up and got subsidies? They certainly can’t subsidize the older ones if they got subsidies too!
b. Even if the younger folks signed up to the 40% goal (26% is a recent estimate)and got no subsidies, how are they going to pay for the older sicker ones?
Let’s look at the math on how a young person paying say $300 per month for his or her own coverage can offset a 50 year old with a subsidy discount of $500 per month? In other words if an older person should have paid say $900 per month, but pays only $400 with a $500 government subsidy. How is the younger person going to balance that out?
This gets worse if we factor in that young people get sick too so the $300 isn’t going to go full into offsetting the older person.
6. How many of the uninsured who had no previous insurance signed up? The last I saw a few weeks ago the uninsured rate dropped from about 19% to 14%. This was used to prove Obamacare was working. Is a 5% drop working? 14% still have no insurance at all.
7. What kind of insurance do those signed up have?
If a low income person has a policy with a $5,000 deductible it means two tragic things:
First, any bills under the $5,000 must be paid in full. That’s like no insurance at all.
Second, if a person needs say a $50,000 procedure, they will probably have to pay the $5,000 up front. Almost nobody will have the cash. Lower income people will probably not have credit cards or have too low credit limits or maxed out cards. If they can’t pay it somehow, then again its like not having insurance at all. The procedure can’t be done.
Then there is the annual deductible trap. Someone can spend over $5,000 by the end of the year and then in January the deductible goes back to $5,000.
How many will fall into these traps?
People will be forced to pay for this non insurance or be fined. The government will be subsidizing it. Insurance companies will be paid for nothing.
8. How much will Medicaid patients benefit? Medicaid pays a lot lower than Medicare or private insurance. Medicaid patients have difficulty finding doctors who will work for the lower rates. With a new huge influx of Medicaid patients, these doctors will be swamped with new applicants. They may not sign up any new patients or there will be long waiting times.
The Affordable Care Act does little to make healthcare more affordable for the country as a whole. It does expand the world’s most expensive healthcare system. It still leaves about 15% with no insurance at all. Too many have high deductible insurance that can be like having no insurance at all. Small healthcare reform won’t do it. We need a serious reorganization of healthcare. How to do this will be covered on this blog/website.
To join in discussions and get email notices of future articlesRegister here. Spread the word. We don’t have the advertising billions that the big corporations have. If you sign up and don’t receive any updates check your spam folder.