Beyond Obamacare

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So you didn’t believe that Obama was going to pick and choose who will be getting care. I guess we all will have to take the risk. As you will see the sick will be flocking in and the others will be paying.

Beyond the Obamacare glitches, some consumers face dramatically higher rates. My daughter’s health insurance increased $400.00 for next year.  Wages going down, hours being cut, so companies don’t have to offer health care. Who do you think caused this?

As Obamacare begins to roll out, some people who already buy insurance on the individual market are getting cancellation notices – and offers for coverage at double and triple their old rates.

Problems with the main Obamacare website, HealthCare.gov, have dominated headlines since the site opened for business on Oct. 1.

But another problem is surfacing: Some consumers who have been buying their own insurance are getting cancellation notices – and offers for insurance at dramatically higher rates.

There are multiple reasons this is happening.

First, the Affordable Care Act (ACA) sets minimum standards for benefits, including mental-health and substance-abuse treatment, maternity care, prescription drugs, and rehabilitative care, which were not included in many of the old plans. Also, insurance companies are now required to take all comers, regardless of their health status, and so rates are rising to cover their costs as well.

In the debate before the ACA passed, there was plenty of focus on people who lacked insurance, either because they couldn’t afford it or had a preexisting condition. Now, newspapers around the country are chronicling the stories of the other category of consumer – people who make too much money to be eligible for federal subsidies and are being charged double and triple their old rates. They didn’t tell you who was going to pay for all this new health care, did they?

“The upper-middle class are the people who are essentially being asked to foot the bill, and that’s true across the country,” Jonathan Wu, co-founder of Value Penguin, a consumer finance website, tells the San Jose Mercury News.

Michael Yount of Charlotte, N.C., is one such unhappy customer. He and his wife, retired and in their late 50s, have been buying their own health insurance from Blue Cross and Blue Shield (BCBS) in North Carolina, paying about $380 a month with an $11,000 deductible. BCBS is offering them a new plan for three times the cost, $1,124.50 a month, still with an $11,000 deductible.  So can you afford this?

“We are an insurance company’s dream,” Mr. Yount tells the Monitor. “We pay our bills, we hardly ever get sick, no prescription drugs. And now this.”

Reluctantly, he says, they plan to drop out of formal health insurance, pay the penalty, and “self-insure.”

“No question, there’s risk there,” Yount says. “The question is, how much are you willing to pay someone else to mitigate that risk?”

He also understands that the law is meant to help those who have not been able to buy insurance because of preexisting conditions. But he objects to how it’s being done. When I got a divorce I had to go out and get my own health insurance. I had a preexisting condition. The only thing they did was add a rider to my policy for a year. So that condition wouldn’t be covered for that period. What is wrong with that?

“If the only way to get it to them is forcibly taking it from everybody else, how is that any better?” Yount says. “I’m struggling with what is the greater evil and injustice. I don’t think it’s any more right to take it from one person forcibly. It’s coercion.”

Yount has been trying since Oct. 1 to get onto HealthCare.gov to see what his options are on the federal exchange, but with no success. Obamacare was not even ready to open its doors but they went ahead and did it anyway.

Most of the exchange websites crashed on the first day, a development that led some of the law’s supporters to conclude that there was overwhelming demand for Obamacare’s insurance products. But the Obama administration isn’t releasing figures as to the number of Americans who have actually signed up for exchange-based coverage. Enrollment In Obamacare’s Federal Exchange, so far, may only be in ‘Single Digits’ “Very, very few people that we’re aware of have enrolled in the federal exchange,” said one anonymous insurance industry official to the Washington Post. “We are talking about single digits.” I hear most of the traffic was to see what was going on. Not to sign up.  We are talking about a very small amount of sign-ups.

Indeed, after undergoing repairs over the weekend, HealthCare.gov is still experiencing significant difficulties. When the problems first became apparent, after open enrollment began on Oct. 1, administration officials blamed high traffic – a sign of the high demand from among the millions of Americans who have been unable to buy insurance until now.

Obamacare will increase Avg. Individual-Market Insurance Premiums By 99% For Men, 62% For Women.

AAF: 30-year-old men face average premium hikes of 260%

A new study from the American Action Forum that looks at healthy 30-year-old men finds that underlying premiums for those individuals will increase by an average of 260 percent. The AAF study compared the least-expensive plans available today to the cheapest plans on the Obamacare exchanges, as did the Manhattan Institute study. The MI analysis, by contrast, adjusted those pre-ACA rates to take into account sicker individuals.

In a sense, the AAF study is more relevant to the problem at hand. Obamacare makes healthy people pay more for insurance in order to subsidize sicker people. It makes younger people pay more to subsidize older people. It makes men pay more to subsidize women. It makes everyone pay more to cover benefits, taxes, and fees that consumers might not ordinarily want.

Health-insurance consultants who have been tracking the roll-out of the ACA say that if HealthCare.gov is not functioning smoothly by early November, the enrollment backlog will become critical. To be covered by Jan. 1, when the law’s mandate for individuals to carry insurance goes into effect, one must have signed up by Dec. 15.  I believe I will just be paying the penalty. So will a lot of the younger generation and the ones that don’t meet the Government standards. Can’t win for losing.

A postscript from Michael Yount of Charlotte: He got back in touch to say that if he or his wife were to become ill, then they would buy health insurance – since the plans are now barred from turning anyone away. Yep that is what so many of us will be doing. How is that going to lower the cost of health care.

One problem with that idea is that people can buy insurance on the government exchange only during the open enrollment period. In the first year, it goes from Oct 1, 2013, to March 31, 2014. Enrollment reopens on Oct. 7, 2014. So what happens if Yount or his wife get sick or have accident during the “blackout” period?

“As we discussed – there is risk,” Yount says in an e-mail. “But the odds are that the most likely scenario for a major medical problem is a car accident. That’s covered with my auto insurance.”

And in the event of an expensive illness, he says, “we spin the wheel.”

Keep an eye on who enrolls, not just how many,

I fully expect that the people who get a good deal out of Obamacare—poorer and sicker individuals—will sign up. The enrollment figures will increase. But the real question isn’t how many people enroll: it’s what kind of people enroll. Two-thirds of the uninsured in America are under the age of 40. What will be the average age of an enrollee on the exchanges? If most enrollees were born before or during the Nixon administration, start worrying.

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