Arlington VA January 6, 2014
There is an old song, that starts, "The good guys hate the bad guys, and the bad goys hate the good guys...". Sounds a bit like Washington and the political establishment in DC doesn't it?
Well, there are a lot of good guys and bad guys in DC--it's just hard to figure out who is who. One thing they all agree upon is that the Affordable Care Act - Also called Obamacare, is clearly changing the landscape. Aside from the pure politics among the good guys and the bad guys, is it really doing something good for the economy?
Let's take two real examples, both from my own neighborhood. Both are faced with applying for Obamacare--one because his employer decided to stop offering insurance (He could do it because all his employees are now 'part-time'), and the other had left her job, and was faced with overwhelming premiums from her COBRA-related after employment insurance (Which would expire anyway in 2014).
The first guy makes just enough money that his family of five is over the threshold for getting wither medicaid or a signficant Federal benefit from Obamacare. He selected a 'Silver' Plan, with a cost over $300 a month after his subsidy (It was $325 to be exact), and got a lower deductible. The deductible was $4000 for the family. His premiums for 2014 will be $3,900.00. His 2013 expenses for medications were about $300.00, and his medical expenses for the family last year were about $3200.00, for a total out-of-pocket of about $3600.00 for the family. That is below his deductible for his new plan. He will pay his premiums ($3900) plus his co-payments under his new Obamacare policy (approx $240), and his deductibles ($3200) for total out-of-pocket under Obamacare of $7340.00, assuming his family has about the same medical expenses as last year. The insurance company gets paid ($3900), but has to put nothing out, unless he has some catastrophic problems in the family. The doctor gets paid ($3440) for services rendered. Of course, that figure may change, since our guy's present doctor will not take his Obamacare insurance, and he has to get a new one.
Our second person lost her job, managed to find a part-time one, and pay the COBRA premiums (Over $900 a month) so her son and daughter would have health care. Of course, that means paying both her share and the employer share from her old plan. Technically, she is better off under Obamacare, since she can now get Medicaid, and pay essentially nothing--the public pays her medical expenses, and those of her children. She also loses her doctor, and has to find a new one because her old doctor does not take medicaid patients. Her old COBRA-related payments of $10,800 simply go away.
From an economic point-of-view, both families are living on the economy. The guy gets a subsidy (at least for a couple of years until the government stops subsidies) to reduce his costs that comes out of public funds. He still cannot really afford what he has chosen, and is seriously consiering simply paying the fine. At least that way, he saves on premiums for several years, until the IRS fine scheme catches up. The gal, on the other hand, gets everything out of Federal and State budget.s Here again, the Feds expect to reduce their share over time, leaving the states with expanded programs they have to pay for through their state budgets.
The net effect here, if you read carefully, is that Obamacare simply delays the inenvitable. Insurance companies will be coming in with new rates after 2014, based on experience rates in 2013, and the mix of signups. They have to make money of course, and guess who pays enough for them to provide dividends to their shareholders--YOU and ME.
The politicans in DC are removed from the realities people with modest incomes face in their daily lives. yet, they, and rabid liberals brought in by Obama to run his government, also far removed from people of modest income, have decided they know what is best. They insist this economic disaster-in-the-making is good for the American people. Do the numbers for yourself, and see if you agree.