More On The Stupidity That Is Obamacare
Donald Susswein, former tax counsel to the Senate Finance Committee, writes at Forbes:
The laudable goal of the Affordable Care Act is to make health insurance more available by establishing insurance exchanges and eliminating bias based on preexisting conditions. But insurance may still be unaffordable to many lower and middle income workers - even in states that agree to expand Medicaid. The problem has nothing to do with implementation. It is the way the law was designed, to keep budgetary costs under control. Here are some examples that illustrate the problems.For a firm whose workers all make over $40,000 the typical cost of the least expensive "affordable" policy for each worker might be approximately $5,000. Of that amount, the workers themselves could be required to pay up to $3,800 which is 9.5 percent of their wages. This 9.5% of wages is the amount the law allows the employer to pass on to the employee and still be considered to have offered that employee "affordable" care. That leaves the employer paying only $1,200, a fully deductible expense. That is why most employers who consult their tax advisors will prefer to provide the minimum required insurance subsidies rather than paying a nondeductible $2,000 tax penalty for failure to provide affordable healthcare coverage.
The workers may be surprised to learn that no employer subsidies are required for the worker's children or spouse. As a result, even if the spouse is also making $40,000 and receives a similar $1,200 subsidy from her employer, the total family cost for premiums could be over $10,000. That is $3,800 for each spouse, plus around $4,000 to cover their children. As a result, many families may decide not to purchase insurance, or delay the purchase until someone becomes ill. This is the free-rider problem the law was supposed to fix.
Here in California, per an Avik Roy article in Forbes, "Rate Shock: In California, Obamacare To Increase Individual Health Insurance Premiums By 64-146%":
Obamacare to double individual-market premiumsIf you're a 25 year old male non-smoker, buying insurance for yourself, the cheapest plan on Obamacare's exchanges is the catastrophic plan, which costs an average of $184 a month. (By "average," I mean the median monthly premium across California's 19 insurance rating regions.)
The next cheapest plan, the "bronze" comprehensive plan, costs $205 a month. But in 2013, on eHealthInsurance.com (NASDAQ:EHTH), the median cost of the five cheapest plans was only $92.
In other words, for the typical 25-year-old male non-smoking Californian, Obamacare will drive premiums up by between 100 and 123 percent.
Under Obamacare, only people under the age of 30 can participate in the slightly cheaper catastrophic plan. So if you're 40, your cheapest option is the bronze plan. In California, the median price of a bronze plan for a 40-year-old male non-smoker will be $261.
But on eHealthInsurance, the median cost of the five cheapest plans was $121. That is, Obamacare will increase individual-market premiums by an average of 116 percent.
For both 25-year-olds and 40-year-olds, then, Californians under Obamacare who buy insurance for themselves will see their insurance premiums double.
I don't see why every other industrialized nation on the planet can pull this off and we can't.
Health care in this nation was broken, and it doesn't seem to have a solution.
Patrick at June 1, 2013 2:59 AM
And there is the fact that the minds behind insurance companies are notorious scumbags. Anyone else recall the medical malpractice nonexistent "crisis"?
Unless they can show proof that justifies this rate increase, I have to believe they're lying, as would anyone with an ounce of common sense.
Patrick at June 1, 2013 3:11 AM
Hmm. What's "every other industrialized nation" - and are the programs really the same?
Sure it has a solution.
In a nation burdened by public debt, it's probably not the solution you imagine, especially if you think anything can be "free", and government makes things more efficient.
Radwaste at June 1, 2013 3:34 AM
Because almost every industrialized nation has limited immigration, tax rates that can be as high 75¢ of every $1 you earn, different standards for required treatment, limits on what your optional treatments are. That is the short list.
Also Japan and the Euro zone are both going broke.
Jim P. at June 1, 2013 3:37 AM
Healthcare companies helped write this bill. I can think of a very large one in particular. One that happens to write these individual plans.
When the fox gets left with the keys to the henhouse...
Feebie at June 1, 2013 7:12 AM
Patrick - do you know how insurance works?
Of course they raised prices. They wrote a bill that mandated every "citizen" purchase an insurance policy (which only the select few that wrote it had products and the infestructure for - there payoff for helping Obama sell this to the idiot public) and they required that these policies cover things normally paid for out of pocket. Kinda like an auto policy forced to include oil changes. You think the premiums would stay the same? Now add an extra 10 people with access to your policy.
Duh?
Feebie at June 1, 2013 7:19 AM
Goddamnit. EVERYONE needs to watch Bulworth and PAY ATTENTION this time.
Bulworth's rap about the insurance companies is SO on target.
Flynne at June 1, 2013 7:42 AM
My premiums got so ridiculous that I cut my plan in half two months ago.
This week I got a letter raising my rates about 25% for the same plan.
Meet the new boss. Same as the old boss.
Gog_Magog_Carpet_Reclaimers at June 1, 2013 9:33 AM
Oh, this whole Obamacare thing is making me mental. I'm the accountant where I work and I have to pay the insurance premiums as well as help pick out the coverage every year. The whole "30 hours a week is considered full time" thing just screwed about 13 of my employees from ever working more than 29 hours a week again. I can't afford to offer insurance to part time workers, so they will have to stay under the STUPID "30 hours is considered full time" rule.
Stop the world. I want to get off.
Daghain at June 1, 2013 12:03 PM
I don't see why every other industrialized nation on the planet can pull this off and we can't.
They do it by taxing at three times the rate we do here.
They do it by expecting the US to pick up the lions share of their costs for NATO, and the UN
They do it by stealing money from each other under the Euro
They do it by expecting the US to provide most of the $$ for any international military actions.
They do it by creating ques that result in citizens of those countries coming here to pay cash to avoid those ques
They do it by going broke even faster than we are
lujlp at June 1, 2013 2:06 PM
Health care in this nation was broken, and it doesn't seem to have a solution.
It wasn't broken, per se. It had issues, yes.
Now it will be.
If you print out the law and regulations implementing the law it creates a stack about 7 feet tall.
That's why it will fail. Complexity if the enemy of reliability.
I R A Darth Aggie at June 1, 2013 2:18 PM
Amy Alkon
https://www.advicegoddess.com/archives/2013/06/more-on-the-stu.html#comment-3728595">comment from I R A Darth AggieA huge problem has not been solved, and that's that healthcare, in an age when nobody stays in jobs for long, is still tied to the workplace.
Why don't I have health insurance issues? Because I got into an HMO in my 20s, after I stopped working for a big company, and have been paying them directly ever since. Once you're in, you're in, and the rates go up by age alone. Well, that is, they did, until Obamacare mucked things up.
Amy Alkon
at June 1, 2013 2:39 PM
This entire crisis has been driven not by health insurance tied to the workplace, and not by greedy insurance companies but by government mandating that doctors and hospitals accept les than half what an office visit or procedure is worth for Medicare patients, and free emergency room treatment for Medicaid patients and illegals.
This by the way, is exactly the same effect that student grants and loans have had on college costs.
The demographics say that this cannot go on. Obamacare was designed to push these expenses onto the backs of the young. What it will do instead, is drive many doctors to go to a cash practice and get out of the business of accepting any insurance at all.
Doctors that do nice to have but non essential stuff are already deeply in trouble. Podiatrists, dermatologists , and plastic surgeons will be hardest hit as people are forced to spend more after tax dollars on essentials.
Isab at June 1, 2013 7:45 PM
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