Friday, October 16, 2015

October, 2015, Part 4, The Unfolding Disaster That Is Obama Care: Higher Prmiums, Higher Deducitbles, Fewer C0-OPs and Shutting Down Some Schools

Every month for years now we have had to discuss how bad Obama Care is turning out to be under the continuing theme, “the unfolding disaster that is Obama Care.” This month is no different. As the legislation continues to march through America, driving up health care and health insurance prices as it serves as dead weight on economic growth, it cements it rightful place as the worst piece of legislation Washington has ever produced.

It never had a chance to be successful since it really never addressed the underlying root causes of our ever increasing health costs in the country:
  • Americans eat too much of the wrong kind of food, resulting in obscenely high obesity rates for the country.
  • Our food chain is infested with overdoses of high fructose corn syrup, salt, and other unhealthy additives.
  • Americans smoke too much.
  • Americans do not exercise enough.
  • The country is in serious need of health care tort reform.
  • Barriers to insurance company competition across state lines need to come down.
  • Obama Care never “followed the money” to find out who is actually profiting from the ever escalating healthcare costs in this country and how to get those factors under control.
  • Obama Care never got the immense amount of fraud and abuse in current government healthcare programs, Medicare and Medicaid, under control in order to save money to efficiently fund other government health care initiatives.
  • Obama Care never put serious research money towards curing the major diseases that drive high healthcare costs such as high frequency cancers and dementia type diseases.
You cannot resolve any problem unless you understand and address the underlying root causes. No difference here but with a big exception: Obama Care legislation never addressed these listed root causes and thus, has no chance of ever being successful.

But it is not just missing the root causes of our healthcare costs that makes Obama Care so horrible. It resulted in millions of Americans losing access to their favored doctors, hospitals, and insurance policies. It has caused deductibles and co-pays to escalate substantially. It will likely add trillions of dollars to the national debt. It has exposed millions of Americans to higher than necessary identity theft chances. It has created government bureaucracies that are wastefully spending taxpayer wealth and being exploited by criminal elements. It has stifled economic growth and job creation.

These are just a sample of the types of idiocy that we have been reviewing for the past several years in this blog relative to Obama Care. To read those past posts, just enter the phrase, “the unfolding disaster,” in the search box above.

Over the past several days we have been reviewing the latest unfolding disasters from the worst piece of legislation ever written by Washington, a review that continues today:

1) According to a recent Associated press report, a Tennessee school district has been forced to close the doors to all of its schools because the financial burden for employee health insurance as a result of Obama Care cannot be met by the financial resources of that school district. Clay County, Tennessee Director Of Schools Jerry Strong stated that the school board based its closing decision because of budget issues related to Federal government Obama Care mandates.

Strong is quoted as saying that Obama Care was the "straw that broke the camel's back" and that "it has made it very difficult for us to have our employees properly covered and meet the mandates of the law." County Commissioner Parrish Wright stated that the county did have enough money to operate the three county schools until the end of the year but not much beyond and made the decision to shut down now.

The county already has the seventh highest property tax in the entire state but overall is a poor rural county so tax increases are unlikely to bailout the schools’ budget. As a result, 1,150 school kids in Tennessee are out of school until further notice, their education delayed because of another unique disaster as a result of Obama Care.

2) One other note from the state of Tennessee. The Washington Examiner article that discussed the closing of Clay County schools also mentioned that the state’s Obama Care co-op is also closing soon. This is the sixth Obama Care co-op to close or announce that it is going out of business out of the 23 that were formed as a result of the legislation. Since only one out of 23 have been profitable so far, it is probably a safe bet that the Tennessee Obama Care co-op will not be the last one to close.

4) Kate Scanlon, writing for the Heritage Foundation on October 13, 2015, discussed the reality that a lot of insurance companies that opted to offer Obama Care insurance policies lost money as a result of that decision. According to a recent analysis conducted by Brian Blase, who is a senior research fellow at the Mercatus Center at George Mason University, insurers lost at least 12% on their Obama Care policies in 2014, an estimate that he labeled as conservative.

He based his analysis on the so-called risk corridor data that came out of the Obama administration. Risk corridors were set up to aid insurance companies who may have been unprofitable as a result of Obama Care in the first few years of its existence. The risk corridor program is a temporary program embedded in the law that required insurers whose premiums exceed expenses to pay a portion of those profits into the program. That money in turn is paid out to insurers whose expenses were higher than their premiums in order to minimize financial losses during the first three years of the law’s rollout.

According to Blases’ analysis:
  • A whopping $7.9 billion was paid out to offset insurance companies’ losses.
  • He concluded that insurance companies intentionally under priced their initial Obama Care policies in order to gain market share.
  • This under pricing will require them to raise prices in the following years to offset their losses, especially when the risk corridor program vanishes and they are stuck with their own financials to deal with.
  • Even worse than their underpricing is the reality that the insurers mix of customers included more older, sicker customers than expected with their expected enrollees of younger, healthier people to help pay for the other policyholders falling well below expectations.
  • But the death spiral mode has now been set because as insurance companies raise their premiums and rates in the coming years, even more younger, healthier people will not sign up for these more and more expensive policies which will make the financial results even worse.
All of this goes back to our basic premise that Obama Care will fail and is failing because it never addressed the underlying root causes of our high healthcare costs, the root causes we listed above. Despite the creation of subsidizes, risk corridors, exchanges, fines, taxes, etc., nothing has changed relative to the real causes of healthcare costs. And that is why insurers are still losing money and raising insurance policy prices and premiums and now we see that kids are being denied schooling because of this horrendous law.

3) But it is just not insurance policy premiums that will be going up in the future for Obama Care policies. We have already discussed the fact that Obama Care policies might sometimes look good for monthly payments but that deductible levels, the amount a policyholder must personally pay before getting insurance policy financial support, has been going up also. Consider some facts pointed out in an October 16, 2015 article in The Week magazine:
  • Health insurance deductibles have risen six times faster than wages since 2010, according to the Kaiser Family Foundation.
  • The average deductible has gone up from $900 to $1,300 since 2010.
  • The article predicts, probably accurately, that more and more employers will be moving their employees to high deductible plans and that the deductible levels will continue to grow in the coming years despite of, or because of, Obama Care.
  • With the whopping 40% Obama Care tax hitting so-called Cadillac insurance plans in 2018, many employers that currently offer these excellent insurance policies will be dropping them also, to avoid the 40% tax, moving their employees insurance coverage to less attractive high deductible plans.
  • Many Americans are coming face to face with sticker shock on these higher and higher deductible plans with a recent Consumer Survey poll showing that on out of three respondents saying that they received a medical bill that was much higher than they expected as a result of escalating deductibles.
So not only is Obama Care forcing higher monthly premiums, it is also forcing higher and higher deductibles. A long, long way from the Obama promise that the average American family would see upwards of a $2,500 DECREASE in their annual health insurance costs.

5) As we often to in these posts, let’s end this discussion with some real life horror stories from real life Americans who are suffering the consequences of the legislation. These horror stories are compiled by the website:

Ben from Virginia on October 17, 2013

I am retired but not of age for medicare. Employer dropped retirement healthcare. I am type 2 diabetic, policy on exchange with prescription drugs equal to one I lost premiums went from 9600 to 14600, with deductible from 1500 to 6000, copay from 15 to 120. WHAT IS SO AFFORDABLE ABOUT THIS!!!!!!!!!

Gary from Minnesota on October 14, 2013

I am a 29 year old male with no children and I am used to about a 9% increase each year. No preexisting conditions or major medical problems. I only use it once every couple of years for a standard check-up and the premium went up 20% this time. Still not a huge jump like some will experience but it is just shy of a $30 a month increase or another $360 out of my pocket each year.

Kevin from Minnesota on October 11, 2013

I have a $9,000 deductible policy that would have been good until June 2014. With the affordable health care act that policy is canceled in Jan.2014, and replaced with a new one.

Because I turn 60 before that it causes the premium to almost double.

This will cause my insurance costs to go up by at least $1,386 due to the affordable health care act, it is probably more but this is what I can prove.

More unfolding disasters tomorrow.

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