The first post in this month’s updates can be accessed at:
Past posts can be found by just entering “the unfolding disaster that is Obama Care” in the search box above.
1) One of the big promises of Obama Care and its supporters is that lower income people would see most of the benefits and little, if any, of the financial pain of the legislation’s tenets. However, according to a recent Congressional Budget Office (CBO) analysis and report, that is nothing more than another broken promise of this administration:
- According to the analysis, about one million low-income Americans will pay a fine under Obama Care.
- These one million Americans are among the estimated four million Americans who will need to pay the individual mandate penalty for not having health insurance by 2016 as a result of Obama Care: “All told, CBO and [the Joint Committee on Taxation] JCT estimate that about four million people will pay a penalty because they are uninsured in 2016 (a figure that includes uninsured dependents who have the penalty paid on their behalf). An estimated $4 billion will be collected from those who are uninsured in 2016, and, on average, an estimated $5 billion will be collected per year over the 2017–2024 period.”
- A chart included in the report revealed that 200,000 of those estimated to be paying the Obama Care penalty will be earning less than 100 percent of the poverty line.
- An additional 800,000 Americans are considered low-income, earning between 100 and 199 percent of the poverty level, will also be paying Obama Care penalties
Apparently, that view was just for the campaign since his signature piece of legislation, Obama Care, did exactly that, mandated poor Americans to pay a fine for not buying something they could not afford. Insanity.
2) In another illegal move by the Obama administration, it is again going against the schedule and requirements of passed legislation by allowing 18 states to continue delaying a key part of Obama Care’s health insurance exchange for small businesses, “employee choice.” This latest delay puts off this component of the legislation until 2016, if then.
Which raises the same question that has been raised any number of times after this administration unilaterally and arbitrarily delayed numerous pieces of this legislation: if the President thinks he can change approved legislation according to any whim that strikes him, then why are we still paying the 500 members of Congress? We apparently do not need them if their only function is to pass legislation that turns into mere suggestions, rather than law, and Obama does what he wants? Obama Care is not only the worst piece of legislation ever passed it is turning into the most lawless piece of legislation ever passed.
3) We have previously discussed the top line results of a recent University Of Minnesota study that concluded that health care costs will accelerate because of Obama Care and that there will actually be more uninsured Americans five or so years down the road then there are today as a result of Obama Care.
I recently came across a more in depth discussion of that work by one of the analysis’s authors, Mr. Parente, who is an associate dean of the Carlson School of Management and director of the Medical Industry Leadership at the University of Minnesota. Highlights of his analysis and what drives his conclusions include the following:
- Health-insurance companies who deal with Obama Care policies are expected to soon begin releasing insurance policy rate estimates for next year's plans, with most industry experts expecting consumers to experience far significantly higher premiums.
- It is not expected by that Federal subsidies will increase by the same amount to keep current Obama Care policy holders financially whole, meaning that those policy holders will experience higher out of pocket costs in 2015.
- If this happens, both in 2015 and in the follwing years as expected, lower-income and some middle-income consumers will be forced out of the private insurance market, viewing the expense as more and more unaffordable.
- Using the 2014 health-insurance exchange enrollment data and a micro-simulation model funded in part by the Department of Health and Human Services, Mr. Parente estimated the national and state impact of Obama Care on insurance prices and enrollment from 2015-24 to illustrate this phenomenon.
- The average premium for an individual exchange health plan (Silver) will increase by $1,375 by 2019 while the average family premium for the same plan will increase by $4,198.
- The steepest price increases will not occur until 2017 and after, when three things happen.
- First, Obama Care‘s "essential benefits" requirements will kick in. All Obama Care insurance plans, including those currently exempted for hardship and old plans extended for various reasons, must provide all of the law's mandated benefits from January 1, 2017. On average, roughly 15% of plans offered in 2013 do not qualify for sale on the insurance exchanges once all of the time extensions run out. Depending on the state, as many as 60% of the plans sold in 2013 would not be permitted for sale going forward since they do not cover all of the essential and mandated benefits, forcing people to buy more expensive plans or drop health insurance altogether..
- Second, Obama Care’s program to subsidize those insurance companies that provide Obama Care policies will also expire in 2017, i.e. the bailouts end in 2017.
- Other insurance companies subsidies also end in 2017. For example, health insurers will no longer be able to bill the government for 80% of a patient's health-care costs when they make more than $45,000 in annual claims. As all of these subsidies end, the insurance companies are highly likely to pass the now unsubsidized costs unto their policy holders, further increasing the cost of Obama Care policies, leaving consumers to pick up the tab through premium payments. Federal subsidies will be unable to keep up with such dramatic rate spikes.
- Faced with all of these upward cost pressures, consumers will react the only way they know how: by looking for cheaper options such as the remaining high-deductible health plans offered by private companies and the exchanges as well as plans with very limited physician and hospital networks established to maximize efficiency but not quality care for the average patient. These plans are likely to provide no or limited access to specialized facilities and physicians.
- And finally, rising premiums will create a death spiral exodus from insurance plans, with increasing departures forcing insurance companies to raise premiums even more on the remaining customers to make up for the shortfall which will drive out more customers from Obama Care plans, etc.
- And these disasters and death spirals exclude what might happen with employer provided health insurance plans. It is expected that many businesses will find it less expensive to drop their company insurance plans and pay the Obama Care fines, forcing millions (the Congressional Budget Office estimate that the ACA will lead to a seven-million person decline in insurance provided by employers by 2020) of Americans to find health insurance coverage on the individual market at the same time that individual market insurance policy costs are spiraling upwards.
This leaves the newly uninsured with two options: If they qualify by their income, sign up for Medicaid or stay uninsured and face a penalty. Many will choose the first option but that will cover a relatively minor set of uninsured Americans since those people exceed the income limits of Medicaid.
Whatever these millions of Americans do, there will be a significant number of uninsured Americans unwilling or unable to pay for the constantly increasing cost for health insurance available on the exchanges and forced to pay penalties. By 2024, the authors of this analysis and research estimate that there will be more than 40 million uninsured, roughly 10% more than today.
Thus, here we have another well researched and thought out piece of analysis that shows again that Obama Care will do the exact opposite of what it set out to do: rather than decreasing the cost of health insurance and making health insurance affordable for millions of Americans, it will make health insurance more and more unaffordable for every American and eventually result in a net gain of uninsured Americans when it was supposed to reduce the number of uninsured Americans.
4) One last piece of bad news today to chew on about Obama Care. The original legislation is supposed to be about 2,500 pages long. The number of pages of regulations that were created to implement the law is reported to be well over 10,000 pages. As we have said many times before, there is nothing elegant about this legislation. It is a Rube Goldberg-like contraption that is so complicated it will eventually collapse and implode into itself from its own complexity and idiocy.
Someone actually tried to flowchart the actual information and process flows of Obama Care. This is legitimately what they came up with:

No way something this complicated has any chance of ever succeeding, especially if the Washington political class and Federal government bureaucracy are operating the levers.
Based on this flowchart, one of my favorite sayings comes to mind: “Try to pare things down, Very few moves to a lot.” It looks like Obama Care got this wisdom backwards, like it got everything else backwards: “Never pare things down. A lot of moves, spread over 2,500, pages accomplishes very little."
We will finish up our latest Obama Care analyses tomorrow. As you read through these posts it becomes very clear that we have been right all along. We have always maintained that the legislation never went after the root causes of our escalating health care problems, a view we will explore tomorrow using some very interesting data and research.
Because at the end of the day, regardless of what Obama Care does, Americans will still be overweight, they will still eat too much of the wrong kind of foods, they will not exercise enough, and they will still smoke too much. Those and a few other factors are the drivers behind our escalating health care costs, not whether or not someone has a bronze insurance plan from Obama Care. Obama Care will never succeed since it never understood the root causes of the problem, mistaking a public health crisis for a health insurance coverage crisis.
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