Tuesday, March 10, 2015

March, 2015, Part 1, The Unfolding Disaster That Is Obama Care: Tax Shock, Under Enrollment, Personal Horror Stories and More

For over three years we have been doing a regular series of blogs under the theme, “the unfolding disaster that is Obama Care.”One would have thought that at some point in time, all of the disasters would have hit the fan and we could stop writing about the worst piece of legislation ever written.

One could hope but one would be wrong. This month is also going to require several days of discussion as the disasters continue to rollout from this horrid law. To review past discussions of Obama Care disasters, enter “unfolding disaster" in the search box above.

1) Let’s start with a nice summary of the disasters so far, as described in a recent article on the website, Against Crony Capitalism:

  • The legislation was rashly rushed through to enactment because of the election of Scott Brown to the Senate, an election that would have denied Obama the filibuster proof he needed to pass the law.
  • As a result of the rush, the legislation was never fully reviewed and vetted for stupidity.
  • It was written to funnel billions and billions of dollars into the health care and insurance industries.
  • The regulation burden is shutting down small doctor's offices who cannot afford the burden of regulation and forcing many doctors into early retirement or different professions, making an existing primary care doctor shortage far worse.
  • Those that finally ended getting Obama Care insurance policies are paying more for their premiums and deductibles than before the law was passed.
  • The rollout of the entire program and associated websites were bad beyond imagination and beyond disgraceful, given the time, resources and billions of dollars that went into the botched rollout.
  • A primary driver of the screwed up rollout was that many contracts were given to cronies without competitive bidding.
  • Despite the law, exemptions were given to unions and select, lobbyist-connected businesses and industries.
  • Despite the law being hyped as a great option, Congress exempted itself from the tenets of the legislation because it was no where as good as their current insurance coverage.
  • The legislation was perhaps the most lied about law ever as the President lied about being able to keep your current insurance policy and keep access to your preferred doctors and hospitals, that the average American household would see $2,500 in savings every year, that the law would not add a dime to the national debt, that the law would not provide abortion coverage in Obama Care policies,, etc.
  • And who can forget the attitude of Obama Care architect Jonathan Gruber who explained in numerous public forums that Americans are too stupid to know what is good for them and need to be exploited for their own good.
And none of this mentions the reality that Obama Care has no chance of being successful since it never addressed the underlying root causes of our high health care costs in this country. Or does it mention the fact that the Supreme Court stands a very good chance of gutting the whole legislation later this summer when it rules on the illegal and un-Constitutional granting of Obama Care waivers to people who got their insurance via the Federal exchange. What a disaster.

2) A Washington Examiner article from February 24, 2015 had some depressing observations about the current status of Obama Care signups:

  • The administration unilaterally and possibly illegally extended the deadline for signing up for Obama Care in order to get some better enrollment results.
  • This desperate extension allowed about 11.4 million to sign up for Obama Care insurance coverage. This is well below the original Congressional Budget Office estimate of 13 million signups by the end of the second year.
  • But if history is any indication, the shortfall from 13 million is even worse. 
  • The 11.4 million total is a “gross” total, it is not the number of people who actually followed through and actually paid for their insurance policy. If the ratio of gross vs. net after the first round of sign ups in 2014 is repeated, that that 11.4 million number is likely to be reduced to about 9 million enrollees or so, 4 million or 30% short of the original 13 million estimate.
  • Next year gets even dicier for Obama Care since the target enrollment estimate is a whopping 21 million people, meaning that the signups for next year’s enrollment period would have to be more than double than what was signed up in the first two years. Since many experts think that the easiest signup candidates have already been enrolled, the chance of getting up to 21 million next year is next to zero.
  • The following year, 2017, will see the termination of taxpayer funded subsidies to the insurance companies which is likely to result in big hikes in insurance premiums and a big drop in Obama Care policies holders as the costs go way up.
  • All of which does not address the bad mix of Obama Care policy holders since the law needs about 40% of the enrollees to be less expensive, healthier, younger customers for the insurance companies. Unfortunately, the real ratio is not 40% but closer to 26%.
What a mess.

3) The mess continues relative to tax filing season. According to a Washington Times article from February 24, 2015, written by Tom Howell, Jr., the majority of Obama Care policy holders who received government subsidies to pay for their Obama Care policies will have to pay back a portion of their subsidies to the IRS. This is the conclusions of an H&R Block analysis. The study also found that the average tax penalty for not purchasing health insurance will be $172, larger than the expected $95 penalty that was the usual estimate of pain.

H&R Block stated that 52% of their customers will have to pay back an average $530 when the file their 2014 Federal income taxes. This will reduce their tax refunds by 17% on average: “The level of payback of the Advance Premium Tax Credit is significant in that it’s costing taxpayers a large percentage of their refund — a refund many of them count on to pay household expenses,” said Mark Ciaramitaro, vice president of H&R Block health care and tax services.

Should be interesting to see how this give back of subsidies influences the future enrollment totals as people eventually find out that many times what they thought they were paying for insurance is far higher than what the expected.

4) We usually close each Obama Care disaster update with some personal stories from real Americans who talk about how the legislation has screwed up their lives and their health. The source of these stories is:

www.ourhealhtcarestories.com

We continue the process with the following real life stories:
MARGIE NORTH DAKOTA

As if they have not stolen enough of our SS with obamacare my insurance has really hit me hard. I was paying $70.00 for my Diabetic Insulin every 90 days, now it costs me $800.00 every 90 days for the same product.

PHILIP IDAHO

Philip Johnson, 47, of Boise, Idaho, was shocked when his cancellation notice arrived last month. The gift-shop owner said he'd spent years arranging doctors covered by his insurer for him, his wife and their two college-age students.

After browsing the state exchange, he said he thinks he'll end up paying lower premiums but higher deductibles. He said the website didn't answer many of his questions, such as which doctors take which plans.


"I was furious because I spent a lot of time and picked a plan that all my doctors accepted," Johnson said. "Now I don't know what doctors are going to take what. No one mentioned that for the last three years when they talked about how this was going to work."

ROGERS TENNESSEE

My Epilepsy medication (generic) has gone from the $10 per mo. copay to $180. My acid reflux medication (generic) has gone from $60 per mo. copay to over $800 per mo. My premium did drop $300,but it's deceiving, because the net effect will cost me over $8,000.

This all kicked in April 1.

LARRY NEVADA

The hospital bills are hitting Larry Basich’s mailbox.

That would be OK if Basich had health insurance. But he doesn’t.

Thing is, he should be covered. Basich, 62, bought a plan through the state’s Nevada Health Link insurance exchange in the fall. He’s been paying monthly premiums since November.

Yet the Las Vegan is stranded in a no-man’s-land where no carrier claims him, and his tab is mounting: Basich owes $407,000 for care received in January and February, when his policy was supposed to be in effect. Instead, he’s covered only for March and beyond.

Basich has begged for weeks for help from the exchange and its contractor, Xerox. But Basich’s insurance broker said Xerox seems more interested in lawyering up and covering its hide than in working out Basich’s problems. Nor is Basich the only client facing plan-selection errors through the exchange, she added.

That will do it for now. More disasters continue to mount up, enrollment will never reach what was promised, tax shock relative to government subsidies is starting to hit, and we have just started reviewing this month's Obama Care disasters. More tomorrow.

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