Obamacare: Insurance and Government Exchanges

August 2, 2012

By Nancy Thorner and Jane Keill – Continuing series about the ramifications of Obamacare.

On March 24, 2007, at the SEIU’s (Service Employees International Union) New Leadership Health Care Forum, President Obama said:

“My commitment is to make sure that we have universal health care for all Americans by the end of my first term as President.”

And,

“As I indicated before, I think that we’re going to have to have some system where people can buy into a larger pool. Right now their pool typically is the employer, but there are other ways of doing it. I would like to — I would hope that we could set up a system that allows those who can go through their employer to access a federal system or a state pool of some sort. But I don’t think we’re going to be able to eliminate employer coverage immediately. There’s going to be potentially some transition process. I can envision a decade out or 15 years out or 20 years out where we’ve got a much more portable system. Employers still have the option of providing coverage, but many people may find that they get better coverage, or at least coverage that gives them more for health care dollars than they spend outside of their employer. And I think we’ve got to facilitate that and let individuals make that choice to transition out of employer coverage.”

And, on June 15, 2009, Obama made an address to the annual meeting of the American Medical Association. For patients, he made a sweeping pledge that:

“No matter how we reform health care, we will keep this promise: If you like your doctor, you will be able to keep your doctor. Period. If you like your health care plan, you will be able to keep your health care plan. Period. No one will take it away. No matter what. My view is that health care reform should be guided by a simple principle: fix what’s broken and build on what works.”

The large majority of American workers have health insurance through their employers. Some are insured by large well-known companies, like Blue Cross-Blue Shield and United Healthcare and Aetna. Many others have coverage with smaller companies that offer insurance to smaller businesses. Some companies are self-insured whereby they pay their own medical costs.

For many years, the Federal government has been putting more and more controls on these employers and insurance carriers through mandated benefits. The government has told the insurance companies they must cover things like contraceptives, in vitro fertilization, Viagra and other services which may, or may not, fit the population of workers covered by their employer’s clients. But even with federally imposed mandates, the same mandates often impact state employers and insurance carriers differently as rules and regulations vary from state-to-state despite these required coverages.  

For example, most states mandate coverage for chiropractors, but the number of allowed visits may vary from state to state from four to twelve visits a year. As chiropractor services can be expensive, health insurance premiums may be greater in states where more yearly visits are permitted. 

As an increasing number of mandated benefits are added to insurance policies, it is a given that insurance costs will rise higher and higher. Mandates are one of the major reasons why health insurance costs have risen steadily for many years.Now that Obamacare has become law, the additional mandates to cover all pre-existing conditions, 26 year old ‘children’, certain medical tests for free and no lifetime maximums, no insurance company could possibly raise their premiums high enough to cover all of these requirements. If they did, nobody could afford the cost of the premiums to purchase health insurance.

One of the provisions of Obamacare is for each state to set up an Exchange that will cover those people who don’t have or can’t get health coverage. The Federal government will stipulate what constitutes a ‘qualified’ exchange plan and what must be covered, and enrollees can choose which plan they want to have.

On Friday, July 27, 2012, the Obama administration said it was on track to set up federal health insurance exchanges by 2014 in all states that fail to establish their own regulated insurance markets under Obamacare.

Fourteen states that have already set up exchanges. Gov. Quinn of Illinois has stated he will set up an exchange because the state needs the federal money provided for Medicaid. (Note that his emphasis is on the money, not the health care for the residents of Illinois.)

A number of states, however, have announced they will not set up the exchanges, (i.e., TX, LA, MO, KS, FL) and more are expected to make this choice. Even though refusing to set up exchanges will cost states new federal Medicaid funding, many are willing to give up these monies.  In Missouri’s situation, the state’s already costly Medicaid program would have to expand because of an increase of individuals who would become eligible to participate in its Medicaid program.  Missouri would have to pick up between $431 and $773 million in new Medicaid spending.

Some states have indicated they will not make the decision to set up an exchange until after the November election. If Mitt Romney wins the White House, and repeals Obamacare as he has promised, these states would not spend the time, effort and money to set up their state exchanges.

Now that Obamacare has also been declared a tax by the Supreme Court, every insurance company must either provide coverage for all their policyholders, or they must pay a tax if they don’t provide coverage.  

Beginning in 2014, employers will also be faced with a tax penalty if they employ more than 50 full-time employees during the preceding calendar year.   

For a pretend example: XYZ Company has health costs of $12,000 per employee, per year. The Obamacare tax is $8,000 per employee per year. XYZ Company is going to pay the Obamacare tax, cancel their employees’ health insurance plan and dump their employees into the government health exchanges wherever they can. It will simply be cheaper for them to pay the tax and let the government pay for health care.    

In a recent study on July 28, 2012, the consulting firm, Deloitte, reported that one in 10 companies plan to do away with health care coverage for their employees over the next few years. In another survey it’s more likely to be one in three companies.

As young adults are the largest group of uninsureds in the nation, the Obamacare mandate for all to buy insurance will not really register with many young people until age 26. Until that age, many young people will elect to remain under their parents’ insurance even if they move away, graduate from college, or get married, a perk that will surely delay the push needed for young people to go out and really look for a full-time job.

What will happen at age 26 when those covered under their parents’ insurance will be forced to buy their own health policies as mandated under Obamacare?

According to the nonpartisan Congressional Budget Office (CBO), many young people without children, feeling they are healthy enough to skip buying insurance, will choose to pay a penalty each year instead of purchasing health insurance. The penalty will be small in 2014 and 2015 before rising to their full levels in 2016

Why would you buy a $5,000 insurance policy if you could pay a $695 Obamacare tax, and still get the same policy if you later became ill and needed it?  Most younger, healthy people will opt to pay the $695 Obamacare tax and take the chance that they’ll never need the actual health policy.    

Once the government exchanges have been set up and the employers authorize their employees to be transferred to them, the insurance companies will disappear. Obama’s long-time dream of a single-payer system will be the only option available to the American people – Medicare for all! There will be no other recourse.

If you receive poor, delayed or negligent care, you will have no alternative. There will be no private health care available. There will be no lawsuits against the Federal government. They can, and will, tell you what you will get, when you will get it, and if you will get health care. Or, the IPAB (Independent Payment Advisory Board) and the Mandate Task Force will tell you what you won’t get.Often heard is how government healthcare in England is quite unacceptable. Yet it is common for those who live in England to talk about how dreamy and wonderful their healthcare system is and that any reports to the contrary are lies.

As reported on June 21, 2012, by Patrick Pullicina, a professor of clinical neuroscience at the United Kingdom’s University for Kent, doctors within the U.K.’s healthcare system are using ‘Death Pathways’ to euthanize patients. It’s a number’s game. Once someone is deemed terminally ill they are immediately cut off from care and left to die in order to control costs.

Is it any wonder why the majority of Americans oppose government healthcare where one shoe is expected to fit all, but where older Americans are asked to sacrifice formerly covered Medicare health procedures, like heart transplants and knee replacements, so there is more money for the rest of the American people?

Let’s not kid ourselves, death panels are an inescapable, necessary component in any socialized, government-run healthcare system.  It is also a denial of reality to believe that our nation can afford Obamacare. Despite the more than $1 trillion Obamacare spends on its mandate to have everyone covered, the CBO predicts 30 million Americans will still remain uninsured.

According to Kate Nix of the Heritage Institute, “The law will now add $1.17 trillion in new government spending over 10 years, paid for by massive tax hikes on all Americans.

Obamacare is definitely not free. Is it any wonder why the increase in insurance premiums and the penalties imposed for not heeding the Obamacare mandate to buy healthcare through exchanges leaves a sour taste and a sense of apprehension among the American people?  With the implementation of Obamacare, many businesses and insurance companies will receive their death knells.

Other Related Stories:

Obamacare:  In the Beginning        Nancy Thorner and Jane Keill    Tuesday, July 17, 2212  2012

Obamacare:  Death Panels         Nancy Thorner and Jane Keill   Friday, July 20, 2012

Obamacare:  You can keep your doctor    Nancy Thorner and Jane Keill  Tuesday, July 24, 2012

Obamacare:  The Popular Benefits   Nancy Thorner and Jane Keill     Friday, July 27, 2012

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