Friday, June 12, 2015

June, 2015, Part 1, The Unfolding Disaster That Is Obama Care: Still Obese In America, Whopping Policy Cost Increases, and MOre Family Heartache Stoires

Every month for the past three years or so we have had to take time out and review the latest insanity and disasters from the Obama Care legislation. Long ago it only took a day or so to cover it all. But then the law starting taking effect and the “unfolding disaster that is Obama Care” made it impossible to contain the bad news, the heartache, the rising costs, and the stress put on American families to just a day or two.

To review the past discussions on this horrid piece of legislation, enter the term "unfolding disaster" in the search box above or just page through previous month's posts on the right side of this page and click on the various references to Obama Care. Very quickly, as your read the past posts, you will see that this is easily the worst piece of legislation ever passed by Washington.

Not only has it disrupted lives, stymied the economy, and increased healthcare costs in this country, it never addressed the various root causes of high healthcare costs. Thus, by never addressing some of the root causes listed below, the legislation has virtually no chance of actually reducing healthcare costs in this country:
  • Americans eat too much of the wrong kind of food.
  • Americans smoke too much.
  • Americans do not exercise enough.
  • The healthcare industry in this country needs serious tort reform.
  • Federal government crop subsidies lead to our food chain being infested with unhealthy sugar and high fructose corn syrup.
  • Current government healthcare programs, Medicare and Medicaid, lose upwards of $100 billion a year to waste and criminal fraud, billions of dollars that could be used to reduce other healthcare costs in this country.
  • Cross state line insurance competition needs to be made easier to do.
  • The Obama effort never “followed the money” to actually map out where the high costs paid by Americans for healthcare actually end up.
Since Obama Care never addressed these root causes, we are still going to have those root causes resulting in higher and higher healthcare costs regardless of how well Obama Care is implemented. And since the prime objective of Obama Care was to reduce costs, the legislation will end up being a failure.

So with that gloomy set up, let’s see what Obama Care disasters unfolded in the past month or so.

1) According to a recent Gallup poll, the national obesity rate went up to 27.7% of all Americans in 2014, an increase from 27.1% in 2013. And more discouraging, this obesity rate is up from 25.5% in 2008. 

Why is this important and relative to Obama Care? It is quite well known and researched that obesity causes a whole host of health issues and related healthcare costs: diabetes, heart disease, joint problems, etc. If we eliminated the obesity problem in this country, the related healthcare costs would go away or at least be greatly reduced. If you reduce the demand for a product or service, in this case health care services to treat obesity impacts, you would reduce the costs. 

But as we see from Gallup’s results, the obesity problem is getting worse, not better, since Obama Care was enacted. So a primary root cause of our high healthcare costs has not been addressed by Obama Care, in fact, it is getting worse. And as obesity gets worse, the chances of reducing health care costs as they relate to heart disease, joint issues, and diabetes gets more and more expensive, regardless of how many people end up getting Medicaid or Obama Care insurance policies under the legislation.

As an FYI, Mississippi is the most obese state in the United States for the second year in a row, a whopping 35.2% rate, with Hawaii being the skinniest, according to the new Gallup poll.

As you can see, despite passage of the Obama Care law, the trend of this root cause is definitely going in the wrong direction.

2) A May 21, 2015 Washington Examiner article by Philip Klein reviewed the reality that Obama Care insurance policy rate hikes are likely to be in store for many policyholders: 
  • Some of the larger insurance companies that provide health insurance policies under Obama Care recently filed their proposed rates for 2016 and many of them contain large rate hikes for their policy holders.
  • Some of the increases actually exceed 40%.
  • And these rate increases are coming down the road in 2016 despite the reality that the Federal government will still be subsidizing Obama Care policies through bailouts of the insurance companies through 2016. This raises the question of how much higher those policies will go in 2017 when those bailout support programs end.
  • According to the article, after two years of Obama Care insurance experiences, insurance companies are finding that, “the pool of customers is older and sicker than originally projected, driving up medical costs. Meanwhile, federal help isn't what they anticipated.”
  • CareFirst BlueCross BlueShield, the largest health insurer in Maryland, proposed an average increase of 30.4% for 2016.
  • BlueCross BlueShield of Tennessee asked for an average increase of 36.3%. 
  • In South Dakota, Wellmark proposed a 42.9% average increase.
  • In Oregon, Moda Health, which serves roughly half of the state's individual insurance market, is proposing to raise its rates by an average of 25.6%. Apparently, Moda's Obama Care policy costs for 2014, the first year of Obamacare's exchanges,exceeded its premiums by 61.5%, certainly not a formula for success and profitability.
  • Industry experts quoted in the article agree that Obama Care policyholders tend to be older and sicker than expected, resulting in much higher costs than the administration or the insurance companies anticipated. The higher payout costs by the insurance companies end up driving higher premium costs for the Obama Care policy holders.
  • According to the Obama administration, as of the second open-enrollment period ending this past February, just 28% of those who signed up for insurance came from the critical and healthier age 18 to 34 age group. 
  • The administration had stated that at least 40% of the Obama Care enrollees had to come from that younger and healthier market segment for the Obama Care policies to be financially viable.
  • The other critical number for viability is that the Congressional Budget Office forecasted that Obama Care needed to sign up 21 million customers by 2016. However, less than 11 million paying customers have signed up in the first two years, making the 21 million signups by the 2016 probably impossible to reach, further depressing financial viability. 
  • CareFirst CEO Chet Burrell warned a Congressional hearing that "if this transitional protection [taxpayer bailouts] is not there, carriers will have to increase rates substantially (i.e. 20 percent or more beyond what they might otherwise file) to make sure that premiums adequately reflect expected costs – because there would be little protection if they do not."
3) All along, the Obama administration has promised that costs across all facets of the healthcare industry in this country would go down. For example, the President boldly claimed that American families would see their annual health insurance costs go down upwards of $2,500. A we see above and from other posts, that is not happening, costs are going up and going up quickly, not down.

But what about other costs in other parts of the industry, are those costs going down as promised? Probably not, at least according to an article written by Sarah Ferris on May 27, 2015 for The Hill. According to her research, the overhead costs for the entire domestic healthcare industry will be $270 billion higher over the next decade compared to what would have happened if Obama Care had not been passed. 

The $270 billion is in new, incremental overhead costs for both private and government insurance programs. These whopping increases in overhead costs are likely to happen despite some provisions in Obama Care what was supposed to DECREASE overhead costs. 

So under Obama Care, premium costs are going UP for policyholders, deductible costs are going UP for policyholders, payout costs are going UP for insurance companies, and overhead costs are going UP for insurance companies and government healthcare programs. All because of a new law, Obama Care, that was supposed to LOWER costs. Typical Washington effort, getting the exact opposite results than what were intended and promised.

4) We usually finish up each of our Obama Care unfolding disaster posts with real life examples of how this legislation has damaged the health care situations of typical Americans. Our source for these true life stories is the website:


Reporter: Insurance companies cancelled millions on peoples' polices because those policies did not meet the new Obamacare requirements. We did find an Omaha family who did not lose theirs, but will pay a lot more.

Reporter: She currently pays about $440 a month, but starting January 1st her rates will increase to $726. In the letter, Blue Cross and Blue Shield stated that her current plan didn't meet the Affordable Care Act standards.

Andrea: Now we have inpatient substance abuse care.. Now we have maternity. I already made the choice that I'm done, I have two children, and I'm done with my family.


From Dawson News:

[Michael] Boyette, 28, is married, has one child and another on the way.

The Boyettes have insurance through the state through his wife's job. Under the new law, his family's insurance premium has gone up $190 a month, from $350 to $540.

"We have less coverage than before at a higher out-of-pocket expense," Boyette said. "One company, three choices, that was it. This was not what [President Barack Obama] assured me and many others."


I cannot believe what has happened to my health insurance at work. Last year it cost me about 85.00 a month with 80% coverage. This year it doubled! I now pay 171.00 and for less coverage, as with a very high deductible! When I went to the Doctors just recently, they paid only 0.896 cents. Last year they covered the cost at 80%, so I do not know how they calculate or what my deductible is! I have to get blood work done, sure it will cost a lot more this year! When I called my benefits office they claim it's because of the new laws. Tried to cancel my insurance due to the fact I can not afford to pay them, and they claim company policy I can not unless I have a different insurance or leave the job. Why shouldn't I be able to get rid of something I can not afford?

That will do it for today. A root cause of high healthcare costs, obesity, getting worse, despite the passage of Obama Care, premium costs going up substantially for 2016, incremental overhead costs in the hundreds of billions of dollars, and more heartache at the household level. Worst peice of Washington legislation ever passed, hands down.

More unfolding disasters tomorrow and beyond.

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