There are a lot of reasons why Obamacare is doomed to failure, but I only intend to go over the biggest and most devastating of those. In their rush to pass a bill, the demoncrats really created a mess.
1) At first glance, the preexisting condition clause looks good. The problem is they made it absolute and didn’t put any barriers on it. Let me explain further. The IRS announced that the Bronze Plan (cheapest) for a family will run 20,000 dollars. Not true. If both parents smoke the premiums can go up 25% for a younger couple and it rises by age up to 50%. . That 20k policy could cost $25k. The thing is that 25k price applies to all income levels. In other words, the same policy would cost the same if you make 30k or whether you make 10 million. And since the poor smoke at a much higher rate, the cost could cripple the poor and middle class, especially with the various scenarios and the way they could play out.
(A) The employer sees the rapidly rising cost of insurance and decides to forgo coverage and pay the penalty. Let’s say they have 10,000 employees and they average 50k a year. Suppose half of them need family policies. 5000 x 10,000 (single policy rate in 2016) 5000 x 20,000 (family rate in 2016) That comes out to 150,000,000 a year. If you multiply that number by 80% (the amount the employer normally pays) you get 120,000,000. That number would be higher for the smoking surcharge. Those 10,000 who average 50k would create a payroll of 500 million. If you multiply that by .08 (The penalty for not covering your employees) you get 40 million. So by dropping employee’s insurance, the company saves 80 million a year.
(B) The company decides to keep their policies for their employees, but the lower paid employees can’t afford the insurance. They in turn will pay a penalty. So in essence, they still don’t have insurance but will now have to pay for not getting it.
(C) The rich would also have incentive to pay the penalty rather than buy the insurance. They can afford to pay for doctor visits and their medications out of pocket. If any member of their family becomes seriously injured or ill, they can then run out and buy a policy and cannot be refused. Of course this is disastrous for the insurance companies who operate on the principle that many hands make a light load. In the fourth quarter of 2012, these companies lost as much as 49% of their profit from the prior year. They take no premiums from these people paying the penalty, but will have to lay out millions when they do get sick or injured.
Had they just laid out a few parameters, they could have avoided this mess. Limit preexisting coverage to people who previously had insurance before losing their job and all people who pay the penalty instead buying a policy. This they did not do.
2) The idea of Obamacare is to cover more people. But it can sacrifice the working poor to the benefit of the nonworking lazy. How so? Simple. If a company offers insurance and you cannot afford it, you are not eligible for government subsidies, but if you sit on the street corner with your crew, smoking cigarettes and drinking beer, you are eligible. And as I previously stated, the working poor would have to pay the penalty and would be subsidizing the bums who sit on their asses.
3) Obamacare is depending on adding 11 million to the Medicaid rolls but the states have balked in alignment with the SCOTUS decision that they did not have to participate. That puts a burden on the federal government and forces them to pay 100% of the cost in perpetuity. Now, Obama is offering the states a deal. They casn make these people pay a 1500 dollar a year premium, plus deductables and copays. Well, duh!!! If they make 30k a year and bring home about 25k of it, how much of a hardship would 2 to 3 thousand be? Again, these people would pay the penalty and only buy the coverage when they got desperately ill or injured.
4) The funding depends heavily on finding 714 billion dollars in savings, during the first 7 years and 3 years prior to the law taking effect. That means each and every one of those years, we need to save 71.4 billion in savings. In the first three years, those savings never appeared. Expecting Obama to cut waste and fraud in spending is like asking Bernie Madoff to hold your wallet while you go swimming. A tax hike will become necessary.
5) By lowering the amount of hours a worker must put in to be eligible for company paid benefits has done nothing but cause companies to cut hours and the rules on when companies must provide insurance (50 employees) has caused companies on or near the bubble to lay off workers. Even the Obama administration agrees this is happening.
6) A relatively few people drive up the medical costs. The top 5% receive 50% of all treatment and the top 1% get 22%. That means the majority could save money by paying the penalty.
7) The IPAB board is made of of 15 people all bereaucrats. They have one weapon in their arsenal to contain costs. Lowering payments to doctors and hospitals. However, they can do backdoor rationing. Say a hospital or a doctor do a procedure that costs them 3000 dollars to perform. IPAB can determine that they will reimburse them at a rate of 2000 dollars. Either the doctors and hospitals will take the loss (wanna bet on this?) or the patient will have to make up the 1000 plus the profit needed to keep the doctor and hospital operating. We already see this happening in Medicare and Medicaid. Many doctors now refuse to see Medicare patients and even more refuse Medicaid patients.
8) The cost for the first 10 years rose almost double. That means there is a huge funding gap. And remember, the Obamacare bill expenses were figured out entirely on the basis of the cost of coverage. It does not include the cost of developing 118 new offices, administration costs, or the additional employees needed at the IRS.
There are many more reasons that Obamacare will fail, but the ones I’ve listed here are the ones I think most define the problem. My advice? Don’t get sick.