A few years ago President Obama appeared on television and told the American public he was going to give them the ultimate free lunch – he said his new Affordable Care Act (ACA) would not only cover 30 million uninsured people, but also reduce the cost of insurance premiums for the typical American family by $2,500. What were we thinking? Was everyone drinking his Kool-Aid?
Now, as we suffer the heat of reality, it is becoming very likely that Americans will be put through extraordinary pains and expense in order to buy a very similar apple for the same price (or more) as an older apple – it will just be called an orange.
This administration and its bought-and-paid-for lawmakers chose to tinker with, and add to, an already complex and teetering framework, rather than to tear it down and build a more sensible and less elaborate structure. The ACA doesn’t really change, but rather tries to reinforce, the basic structure of US health insurance, with its essential reliance for the non-elderly population on employer provided private health insurance. In addition, the ACA system is way too complicated and will take years to be fully operative. (Medicare only took a year to implement.) But the truth is, when has our government ever done anything within the timeframe and for the price they first announced? (If you believe differently, see Kool-Aid in paragraph one).In addition, experts are announcing that the ACA will not actually reduce administrative costs for the multitude of private insurance companies at all. On top of that, faced with the need to keep premiums as affordable as possible in “the exchanges,” it already appears that the state directors and ACA federal administrators will be under extreme pressure to reduce the benefit package required of all insurers participating in the exchanges. One of the latest articles in Forbes Magazine states that Obamacare will actually increase Healthcare spending for a typical family of four by $7,450. In that same article, it is mentioned that the experts working for Medicare’s actuary have again reported that in its first 10 years, Obamacare will boost health spending by “roughly $621 billion” above the amounts Americans would have spent without this misguided law.
A friend of mine who works in the insurance industry and whose job is explaining the Affordable Care Act, sent me the following eye-opening summary on America’s already failing experiment:
First off, the ACA is mainly a set of regulations imposed on health insurers, employers, and our citizens. Very little, if anything, has been done to reduce the cost of medical care, which is the main cost-driver of health insurance premiums.
On Jan. 1, 2014, the following mandates on health insurers become effective:
Guaranteed Issue: Health insurance is meant to be underwritten. It is a risk-based product. What has been overlooked by ACA’s regulations is the reserve requirements health insurers must have for incurred and future claims. Guaranteed issue will increase claims. Higher claims require increased reserves. Beginning next year, health insurers can no longer underwrite a risk. They will have no choice but to increase premiums significantly. Guaranteed issue was tried in the individual health insurance market in 1995. The result was major increase in premiums. The mandate was eventually rescinded.
Waiver of Pre-existing conditions: Again, another method to limit exposure, which helps keep premiums lower. The maximum pre-x period is 12 months. This provision will be eliminated by ACA. This becomes another high cost issue for insurers, which impacts claims paid, thus increasing reserve requirements.
Community Rating: Does away with normal demographic rating. Gender is eliminated. Limits maximum premium on older insured’s (65). The limit is three times the rate charged for a 20 year old. This will cause premiums for the under 30 age group to increase by 30%. Premiums for employers with 2-49 employees will be per employee “age” based. No longer will average premiums be used.
Exchange Navigators: These enrollers are not required to have a health insurance license. They will be marketing health insurance but not licensed as agents and brokers are. They are not required to have taken ethics courses – no CE requirements or errors and omissions insurance. The PUBLIC BEWARE.
Exchanges: Employees eligible for an employer’s plan are not eligible for exchange enrollment. Dependents who do not enroll in their spouse’s employer medical plan are not eligible to enroll in an exchange. By 2015, exchange medical carries face premium increases. Penalty for not Having Health Insurance: Minimum $95 annual fine to a maximum of 1% of income. Can only be collected if a refund is due. Young persons facing premium increases will opt for the fine and walk away. (Where does that leave the older people depending on their financial input into the system?)
Written in secret, brought to the floors of the House and the Senate without committee hearings, and voted on by people who had never read it, Obamacare represents the American Titanic. And what you’re seeing here is only the tip of the iceberg – this does not even address the usurpation of control of government written into and never addressed in this document.
I will leave you with a statement by Democratic Minority Leader Nancy Peloski, speaking to her constituents, which pretty much sums up the frightening inanity of our situation: “We need to pass Obamacare so that you can find out what’s in it.”
Michael Reisig has been writing professionally for 15 years. He is an award-winning newspaper columnist and a best-selling novelist. Be sure to check out Reisig's "Road To Key West" novel series. High adventure and humor as Kansas Stamps and Will Bell cavort through the Caribbean, from Key West and Cuba to Central and South America.