Obamacare: When The Other Shoe Drops – Thorner and Ingold

November 30, 2013


By Nancy Thorner and Edward Ingold – 

As reported by Fox News on November 22, President Obama postponed the 2014 sign-up date for Obamacare until two weeks after the mid-term elections: Obamacare enrollment for 2015 to reportedly be delayed until after midterms.

On the same day, November 22, David Martosko, U.S. Political Editor at the Daily Mail, United Kingdom, reported Obama’s arbitrary change of the Obamacare sign-up date in far more strident and honest terms with this headline than were found in U.S. media account with this headline:  ‘How nakedly political can you get?’:  Obamacare year-two signups delayed until after 2014 election .

Following were these statements made by Martosko:

1. Voters in the insurance exchanges won’t know 11 days after the 2014 election just how much they’ll pay for coverage in 2015.

2. The Treasury department has already delayed implementation of the employer mandate, and its fines, until Election Day has come and gone.

3. Millions of Americans are receiving private-insurance cancellation letters, with many experiencing sticker shock when they learn their options.

4.  One poll released Wednesday [November 20] shows that 48 per cent of taxpayers now want the Obamacare law repealed.

As was conveyed in the UK Mail headline, there was no plausible reason to postpone the 2014 sign-up date for Obamacare other than to keep bad news from reaching voters until after the General Election in November. What could they be?

As set forth in terms that put the cheese on the cracker:

  • Insurance mandates for employee benefit plans were previously deferred until 2014. At that time, all insurance plans must include the ten mandates specified in the Affordable Care Act of 2010. These same mandates resulted in the cancellation of about 6 million private insurance policies, and doubled the cost of insurance of policies offered in their place. Most of the added cost comes from two popular mandates – coverage for pre-existing conditions, and the elimination of lifetime benefit limits.
  • The huge price increase is concealed in two ways. Nearly half of those affected will receive subsidized health care, and the maximum out-of-pocket expense (deductible) have been doubled or tripled for most policies. Cost of these subsidies are supposed to come from higher premiums for those can afford it, resulting in a charges of up to 4 times the pre-Obamacare costs. In other words, income will be redistributed from those who have to those to do not. It is such a politically toxic term, that the term “redistribution” has been banned from the White House lexicon.
  • Many insurance companies wishing to participate in state and federal insurance exchanges were required to cancel all non-conforming policies as a condition of doing business with the government

But the other shoe is yet to drop.

  • Pricing for insurance offered through the exchanges is based on young, healthy participants in the insurance pool. The strategy behind the millions of cancellations this fall was to force those people into participation. However, the unemployment among this age group is very high, as much as 25% for college graduates. They simply can’t afford health insurance, and will probably either pay the fines do nothing at all. The “fines” for failing to secure health insurance are imposed on income tax refunds (the Democrats were not willing to impose them directly, or call them a “tax.”) If you aren’t working, or working at minimum wage, you probably don’t owe taxes, hence no refund, hence no Obamafines.
  • The early adopters of Obamacare fall mainly in two categories – those who couldn’t get insurance due to pre-existing conditions, and those who couldn’t afford insurance without subsidies. The majority of early adopters were, in fact, seeking Medicaid at no cost to themselves. The Affordable Care Act doubled  the maximum allowed income to qualify for Medicaid to $32,000, which is twice the presumed poverty level. Subsidies will be granted to those making up to $62,000, four times the “poverty level,” and nearly twice the median wage ($35,000) for working citizens. Somebody has to pay for those shortfalls and subsidies.
  • Finally, the deeply flawed www.healthcare.com software has greatly delayed applications through the exchanges, and unresolved security questions will keep many from even trying. This further skews the risk pool and increases the deficit.

The facts so far presented offer a grim picture.  It is little wonder why so many Americans are duped, confused and running scared?  With such a scenario present, Steven Hayward who writes for Forbes, made this prediction on Monday, November 11th: 

Even if HealthCare.gov is fixed by the end of the month (unlikely), Obamacare is going to be repealed well in advance of next year’s election.  And if the website continues to fail, the push for repeal — from endangered Democrats — will occur very rapidly.  The website is a sideshow:  the real action is the number of people and businesses who are losing their health plans or having to pay a lot more.  Fixing the website will only delay the inevitable.

It remains to be seen, as predicted by Haywood, whether endangered Senate Democrat up for re-election will lead the charge for repeal perhaps as soon as this January after getting an earful over the Christmas break  Unclear also is whether the delay to sign-up for Obamacare until after the November election will mask the bad news the American people will receive regarding sticker price, etc., that will follow in the election’s aftermath.

If Obamacare should remain in place and limping along, Insurance rates for 2015 will be based on a more realistic risk pool, which is weighted to those who will use a lot of health care. As a result, as many as 160 million people, including those now covered by employee benefit plans, will see those plans greatly increased in cost or cancelled altogether. This will drive up the cost of both private policies and of employer benefit plans.

If these plans exceed $10,200 for individuals or $27,500 for a family, they will be deemed a “Cadillac” plan, and subjected to a 40% tax on the difference. Unless the quality of coverage is reduced, for example, by greatly increasing the out-of-pocket deductions, nearly all of these plans will fall victim to this surcharge. The more likely outcome is that the benefit plans will be dropped, and employees sent involuntarily to the government exchanges.

By 2016, Obama will have applied a wrecking ball to the health care industry, our lives and our fortunes. The only way out is for Republicans to gain a majority in both houses of Congress in 2014, and the White House in 2016.

Friday, November 29, 2013 at 07:00 AM | Permalink

Technorati Tags: Edward Ingold, Illinois Review, Nancy Thorner, ObamaCare, repeal




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