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America’s mostly unaffordable health insurance.

October 25, 2016

No matter how you try to sugarcoat it, unsubsidized Obamacare is becoming largely unaffordable for a lot more people. Premiums in Arizona could be more than doubling for some classes of insured persons, from $196 to $422 a month.

Also, if you are uninsured for more than three months in 2016, you must pay a compliance fine of 2.5% of your total household adjusted gross income, or a flat fee of $695 per adult and $347.50 per child, to a maximum of $2,085, whichever is greater.  For 2017, the penalty remains at 2.5% of household income, but the flat fee will be adjusted for inflation. There are also nine conditions for exclusions that may exempt you from the penalties.

For the 5 to 7 million people who are not subsidy-eligible, they may now be effectively uninsured again, making too much for Medicaid and Obamacare and not enough to afford private insurance.

Apparently that means that up to 7 million more people will owe the government 2.5% more of their income.

As numerous news stories have pointed out, the imbalance in healthy younger vs. unhealthy and older policyholders has made for a sharp drop in the insurance companies bottom lines.

Like any other business, insurance companies can’t hold on to products that are losing money hand over fist forever.  Ergo, goodbye Obamacare participation.

The ripple effect

And it isn’t just affecting Obamacare policyholders. America’s seniors are affected as well.

While most employer-provided plans are not going to see the average 27% increases, some Medicare Advantage plan holders are finding that their insurers have pulled out of the market in their area.

Humana for instance has dropped completely out of some of the state markets for  their zero-premium Advantage plan products, often leaving just one or two companies still in the marketplace. For seniors who depend largely on Social Security for income, the average extra $100.00 plan cost for all-in-one plans is simply unaffordable when combined with the mandatory Part B premium deducted from their checks each month.  Even the plans that do not include prescriptions are now at least an additional $50/mo with no zero-cost premium choices available.

Politics, as usual.

But back to plain old Obamacare policies.

Of course this will be politicized, with Democrats alternately proclaiming that subsidies will provide insulation for most of the 9.9 million people still enrolled in plans authorized by Obamacare and offering single-payer health insurance as the future of healthcare payment strategies.

Republicans will point to the quality of care delivered by the VA as an example of what consumers could expect from what is sure to be called Clintoncare, while pointing out that without even a semblance of competition the government can charge whatever it darn well pleases for a policy.

The ACA never did reach the rosy estimates for coverage nor the total number of insured necessary for its own survival. People did not save $2500 per household, and they didn’t get to keep their doctors either.

In fact most of the really low-income people are insured under Medicaid or CHIP government plans, not insurance policies from companies. Various websites put the number of Medicaid insured persons at somewhere between 7 and 9 million people, although not all of those are new enrollees.

Equality of healthcare is a pipe dream

The truth is, there has never been a way for every American to receive Cadillac-quality  healthcare because the money available wouldn’t even buy a cheap used Chevy.

At best, most of the 32% of Americans tabulated as making  less than $32000 (0-199% of the poverty level) in 2015 can expect to have only bare bones healthcare policies, or what is commonly called catastrophic coverage.

The only thing at issue is whether ANY American “deserves” Cadillac care.

Democrats and socialists like Bernie Sanders would argue that they don’t, even if they can afford the best insurance coverage available, which is why Obamacare taxes Cadillac employer health plans as income, even if you don’t use the benefits.

Republicans would like to say that you can get what you can afford, which comes across as unfeeling and discriminatory unless you factor in health savings accounts.

Those accounts at least provide some measure of relief for the shrinking middle class, but still do nothing for the 32% that can afford neither HSA’s or the $5-15,000  total family deductibles.

The other side of the equation

The flip side of the argument is obviously reducing the actual cost of the care.

Toi do that, Americans need to be better informed consumers, but for that they need accurate data.

It is almost impossible to get a reasonably accurate estimate of what your particular medical procedure will cost.

For instance, say you need diagnostic tests such as an MRI or CT scan for back or neck pain.  A quick look online shows estimates from as little as $300 to as much as $3200, depending on variables such as whether your doctor wants you to be hospitalized for the tests.

By the same token, just assigning an arbitrary payment figure to all providers isn’t the answer either. It doesn’t drive costs down across the board and probably shouldn’t. A level 1 trauma center obviously has legitimately higher costs than a neighborhood clinic.

There have been studies  that have attempted to pinpoint areas of cost savings, particularly as regards administrative costs, purchasing policies, tort reform and even adjusting patient expectations to accept less care as the norm.

So far, no one has come up with a better system than we’ve had in the past, meaning that anything a politician tells you he or she is going to do to “fix” anything is just so much hot air, without a detailed and fully implementable plan.

Until then, enjoy your “affordable” health insurance.

From → op-ed

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