The (Un)Affordable Care Act
By Rick Bronstein
November 18, 2013
As more people are learning every day, Obamacare is not the solution to our health insurance needs. As of mid-November over 5 million people have had their insurance cancelled because it does not comply with some of the provisions of the ACA. These “substandard” plans might not have included pediatric dental and breast pumps so important to single men.
But even if the website had worked after over 3 years of time to build it, and even if policies had not been cancelled, this law has many problems. We’ve heard many say that there are many good things already in place so let’s see how these changes work.
Children can remain on parent’s plan until age 26
Adult women, married or not, are covered for maternity. So the 25 year old unmarried daughter now can go on their parent’s insurance and the company will now pay for her expenses. If that 25 year old gives birth to a premature baby, the insurance company is on the hook for several hundred of thousands of dollars of costs. This is a pre-existing condition that was caused by a voluntary act yet somehow covering this occurrence is a good thing?
Additionally, many group insurance plans have one rate for 2 or more children. So adding an adult to the policy if there are already other children on the plan generates no additional premium for the insurance company, yet they are on the hook for claims for additional people – in this case, adults.
Eliminate pre-existing conditions for children (and everyone after 1/1/14).
I wonder how Allstate insurance would respond if I call them and say I want to buy an automobile policy because my car is on fire? That is the same as calling an insurance company and asking them to cover me even though I have a medical condition that will cost them thousands.
While many people have lost their group insurance and find themselves unable to buy an insurance policy due to pre-existing issues (we can discuss the stupidity of our health insurance system mainly employer based another time), there are even more people that are “invincible” and would rather buy that 60 inch TV than insurance. When they have an illness why should insurance be available to them? We now force insurance companies to “bail out” someone because they were irresponsible.
This actually causes more problems than might be obvious. When people are healthy (or good drivers), the money they pay for insurance is used for those who are unhealthy. By allowing the healthy to avoid paying for all the prior years but force insurance companies to now insure them when unhealthy, premium must rise.
Makes insurance more affordable
In a way, this is correct IF everyone paid into the pool. But with the employer mandate delayed a year (executive orders trump law apparently) and “you can keep your policy if you want” not actually being true, the number of people being insured may very well be lower.
Through the first month of enrollment most of the newly insured are for Medicaid, a plan that is 100% paid by taxpayers. And the only reason it can even be called affordable for others is if they receive a premium subsidy – again, taxpayers are on the hook.
As Margaret Thatcher said, “The problem with socialism is that you eventually run out of other people’s money.” When we run out of taxpayers, what happens to Obamacare.
My 26 year old son had a great policy. He would be on the hook for the first $4,000 and Aetna would pay the next $3,000,000. His premium was about $80 each month. But it didn’t comply with ACA nor did any of the other Aetna individual plans in California. So they are leaving the state for these policies as of Jan 1. My son now can get a similar plan with a $6,350 out of pocket cost for only about twice the cost. But at least he can get a free breast pump.
This will encourage competition
Fewer companies with fewer plans is not more competition. In Los Angeles County there are only two PPO plans. Let me repeat this. Only Blue Shield and Health Net offer PPO plans in L.A. And if you want to use Cedars Hospital, you better not have any plan other than Health Net with a $5,000 deductible.
One of my clients lives just north of L.A. in Ventura County. His wife has a rare heart condition but is doing well because of the treatment from a specialist. After Jan 1 he will only be in the Health Net PPO network. No problem, right? Well, Health Net will not be offering coverage in Ventura County. So either she loses her doctor and risks her health, or “moves” to someone’s address in Los Angeles County.
Several years ago Rep. Alan Grayson (D-Fla.) warned Americans that “Republicans want you to die quickly” during an after-hours House floor speech. Given the complete lack of republican support for this law and given my friends plight, I just wonder if the democrats are the ones that “want you to die quickly.”
Just the start
As this monstrosity rolls out, more and more problems will arise. I’ve just touched the surface here with all this is wrong. There is no doubt in my mind that this law (we have to pass it to know what’s in it) was designed to fail. This can’t be accidental.
When it does fail, what do we go back to? The insurance industry has already been hurt by this and I can see the what the democrats will be saying: “We told you that health insurance companies can’t do this so the only solution is single payer.”
It’s coming. We’re turning into Europe. Socialism for all!
Rick Bronstein
Green Sky Insurance Services
Encino, CA
800-550-0155
Rick Bronstein in an insurance broker in Southern California, specializing in health insurance. He was the Libertarian Party of California’s candidate for Insurance Commissioner in 2010, coming in third with 362,037 votes and 4 % of the total. He wrote this article for publication here at IPR at my request.
Those are some good ones, among others.
The only other suggestions are have are nowhere near important enough to fix the problem, but they should help:
1. Allow Physician’s Assistants to do some of the work only doctors can do now:
2. Allow midwifery for those who wish to give birth that way, and have no complications prior to delivery; and
3. Relax inter-state restrictions, thereby making private health insurance more competitive and available.
Michael Wilson has good ideas on this topic. Maye he’ll visit us and comment int he next few days.
I would recommend reading that chapter online if you want to understand the health care issue even if you don’t have time to read the whole book yet.
Thanks. I admit that I bought Mary’s book, and added it to the ever-growing stack of books to get to when–I stop spending so much time on the computer. I really need to make it my next book to read.
You have to look at how we got where we are:
http://www.ruwart.com/Healing/chap5.html
Rick, I don;t remember the high risk pools. I remember the COBRA program, and yes, it was extremely expensive. So much for the only solution I can come up with.
The healthcare problem has been a mess for years, which is why the Affordable Care Act was written in the first place. Are there any countries with models that work?
Good question.
It’s in the blurb about the author.
Charity hospitals operating with donations seemed to do the trick nicely for a long time. Why fix something that is not broken?
California used to have a program for people with pre-existing conditions, as did many of the 58 states. It was one of two high risk pools. One was for people whose COBRA was expiring; the other for those who simply had no other options. Both were very expensive.
Third party solution? That’s a toughie. It kind of depends on how bad things are allowed to get before the law is finally repealed, and since I’m convinced it simply can’t work, I expect it will be repealed sometime in 2014. How many months will some people have gone without insurance? How long have healthcare providers not been properly paid for their services, if they worked at all? What about all those people who make their living in the health insurance business, from salespeople to claim adjusters to service people? We could have economic chaos like this country has never seen next year. Many of these insurance workers would have lost their jobs if people aren’t buying the products companies thought they’d buy. Some of the companies will have withdrawn from doing business in some states. Will the state insurance commissioners say, “Sure, come on back, and go ahead and charge the premiums you think are actuarially appropriate”? Some maybe, but certainly not all will.
Most Libertarians would say to just let the free market come in, and probably the fewer rules and restrictions, the better. I differ from most Libertarians in that I propose an arrangement similar to the California Earthquake Authority program to cover those who are uninsurable because of pre-existing conditions.. All the premiums paid for earthquake coverage are put into a separate fund. If the fund should run short, all the participating carriers have agreed to pay their proportionate amount of the difference. For example, if State Farm has 20 % of the houses insured in the state, they’d
pay 20 % of the shortage. The program is NOT government-funded at all, nor is it run by government employees. Premiums would be high for those with pre-existing conditions, but at least they could find some coverage.
What’s the third party angle?
I agree with everything the dude says though, with the possible exception of the law being designed to fail. I’m not sure about that.
ObamaCare: What You’re Not Being Told
http://www.youtube.com/watch?v=XQtxcKT-u_Y
Here’s more discussion of healthcare:
http://fff.org/explore-freedom/article/the-libertarian-angle-the-healthcare-disaster/