Thursday, December 13, 2012

The Problem with the Patient Protection and Affordable Care Act is that Nobody Can Afford It

Obamacare is officially known as the Patient Protection and Affordable Care Act. Unfortunately, patients are not protected and nobody can afford it. When the Democrats passed Obamacare they were sufficiently astute to NOT implement its most egregious horrors until after the 2012 election and for darn good reasons. The real problem with the US government controlled healthcare system is that it's unaffordable at any price. 

Aetna CEO Sees Obama Health Law Doubling Some Premiums Bloomberg
Health insurance premiums may as much as double for some small businesses and individual buyers in the U.S. when the Affordable Care Act’s major provisions start in 2014, Aetna Inc. (AET)’s chief executive officer said.

While subsidies in the law will shield some people, other consumers who make too much for assistance are in for “premium rate shock,” Mark Bertolini, who runs the third-biggest U.S. health-insurance company, told analysts yesterday at a conference in New York. The prospect has spurred discussion of having Congress delay or phase in parts of the law, he said.

“We’ve shared it all with the people in Washington and I think it’s a big concern,” the CEO said. “We’re going to see some markets go up as much as as 100 percent.”
This is no isolated concern and the New York Times reported on this issue and disclosed that health insurance premiums will soar under Obamacare.

Ambiguity in Health Law Could Make Family Coverage Too Costly for Many
In 2011, according to an annual survey by the Kaiser Family Foundation, premiums for employer-sponsored health insurance averaged $5,430 a year for single coverage and $15,070 for family coverage. The employee’s share of the premium averaged $920 for individual coverage and more than four times as much, $4,130, for family coverage.

Under the I.R.S. proposal, such costs would be deemed affordable for a family making $35,000 a year, even though the family would have to spend 12 percent of its income for full coverage under the employer’s plan.
Over $15,000 a year for family health insurance coverage is very high, especially for middle class wage earners, and that's before Obamacare kicks in and vastly drives up healthcare costs even further.  It was recently reported that Blue Cross of California was seeking 20% rate hikes, here.

How do US healthcare costs stack up with healthcare spending in other industrialized nations?  We spend a whole lot more money on healthcare and by a huge margin.

Not only are US healthcare cost much, much higher than healthcare costs in other industrialized nations, they are expected to climb in the US.

Health Care Costs To Reach Nearly One-Fifth Of GDP By 2021

Why is the US healthcare system such an expensive disaster?

ObamaCare’s Crony Capitalism and Crooked Concealment
It was inevitable that a behemoth law such as ObamaCare, the result of much political wrangling and lobbying, would lead to crony capitalism. What was not inevitable, however, was that the cronyism — and a subsequent coverup — would occur so quickly; but that is the accusation leveled against the Obama administration and a major healthcare corporation by Jeffrey H. Anderson in the December 10 issue of the Weekly Standard.

ObamaCare requires that each state set up an insurance exchange where individuals can choose from a variety of health plans by January 1, 2014. A state may opt out of creating its own exchange, at which point the federal government will step in and create one for it. As of now, 17 states plus the District of Columbia have indicated that they will establish their own exchanges, and about the same number have balked.

That has put the Department of Health and Human Services (HHS) in a bind. It now has to set up exchanges for each of the recalcitrant states (plus any that subsequently refuse to play ball), which it was clearly not anticipating; and it must do so by October 1, 2013, when open enrollment begins. HHS is, not surprisingly, behind schedule — one reason for the coverup Anderson alleges in a report based on previously published accounts and information from an anonymous “insurance industry insider.”
The real healthcare disaster in America is that America really doesn't have health insurance. The definition of insurance is as follows (here):
Insurance is a form of risk management primarily used to hedge against the risk of a contingent, uncertain loss. Insurance is defined as the equitable transfer of the risk of a loss, from one entity to another, in exchange for payment. An insurer, or insurance carrier, is a company selling the insurance; the insured, or policyholder, is the person or entity buying the insurance policy. The amount to be charged for a certain amount of insurance coverage is called the premium. Risk management, the practice of appraising and controlling risk, has evolved as a discrete field of study and practice.

The transaction involves the insured assuming a guaranteed and known relatively small loss in the form of payment to the insurer in exchange for the insurer's promise to compensate (indemnify) the insured in the case of a financial (personal) loss. The insured receives a contract, called the insurance policy, which details the conditions and circumstances under which the insured will be financially compensated.
By definition, insurance is a voluntary contract and coercion should never a factor, otherwise it's not insurance but government force and taxation. Folks voluntarily choose to purchase insurance for various purposes to mitigate against unforseeable catastrophic events like an automobile accident or the house burning down. Decades ago before government intervened in the healthcare business, America had a low cost world class medical system because folks only bought medical insurance for catastrophic medical events such as a major illness requiring large but unexpected medical expenses. All other routine medical expenses, such as doctor visits and perscriptions, were paid for out of pocket.

As Americans are about to learn, nothing is free.  Obamacare was designed accomplish 3 things.

1.  Force folks to pay for mandated healthcare services that they wouldn't voluntarily choose to pay for in a free market if they actually had the option to buy  REAL insurance at free market prices.

2. Create a healthcare system so expensive that more folks will be forced into government run healthcare programs.  It's nothing more a backdoor single payer government run healthcare system.

3. Mandate a slew of new taxes, here, to create new tax revenues for the government, revenues that may never be spend on healthcare.

Obamacare will hit the poor and middle class the hardest.  The middle class who can afford healthcare will be paying higher healthcare costs in the way of new and higher taxes, and government mandated insurance costs to subsidize the socialized healthcare system and the poor will be paying taxes to cover at least a portion of all their free healthcare.

More Middle-Class Americans Hit by Obamacare Tax
Of the 30 million Americans whom Obamacare leaves uninsured and without affordable insurance options, 6 million will have to pay the penalty, an increased estimate from 2010.....

Despite claims made by Obamacare’s advocates that the law will help middle- and low-income Americans, CBO’s table reveals that the distribution of the tax falls heavily on those making less than 400 percent of the federal poverty level (FPL)—meaning the majority of this new tax falls on the very people the law was supposed to help. For instance, a family of four making about $24,600 per year, the projected FPL in 2016, could be subject to this egregious tax penalty.

Regardless of whether or not these 6 million Americans want health coverage, they are going to pay a hefty tax and still won’t have it. Moreover, the individual mandate tax is only one of Obamacare’s 18 new or increased taxes and penalties that will cost Americans $836 billion over the next 10 years.
According to website of the White House, here, federal revenues and expenditures are as follows but the government doesn't even seem to know how much it collects and spends as evidenced by the figures being estimates.

Year      Receipts     Spending
2011     $2,174        $3,819   Estimated
2012     $2,626          3,729   Estimated
2013     $3,033          3,771   Estimated
2014     $3,333          3,977   Estimated

It's clearly evident that the government government is anticipating a windfall in Obamacare tax receipts and collections.  Meanwhile, the IRS is beefing up its staff to collect all these new taxes.

How many, exactly? Numbers range from 2,700 to 16,500:
The IRS says it is well on its way to gearing up for the new law but has offered little information about its long-term budget and staffing needs, generating complaints from Republican lawmakers and concern from government watchdogs.
The IRS is expected to spend $881 million on the law from 2010 through 2013, hiring more than 2,700 new workers and upgrading its computer systems. But the IRS has not made public information about its spending plans in the following years, when the bulk of the health care law takes effect.
Not surprisingly, the US has the most expensive healthcare system in the world and by a wide margin. Moreover, the US healthcare system ranks 37th in performance and quality.

U.S. health care: Highest in the world in cost, 37th in performance. This system has already been declared guilty.
The health care system in the U.S. is 40% more expensive per capita than the next most expensive OECD developed countries

As a country, approximately 18.2% of our GDP is devoted to healthcare spending. Switzerland and France (#2 and #3) spend respectively 12.3% of 12.0% of their GDP for health care. The U.S. spends the second greatest amount of GDP for health care among all members of the United Nations, topped only by East Timor.

For its money, the U.S. obtains health outcomes that are near the bottom of the OECD rankings, and, in fact, rival some of the outcomes of Third World countries.
Americans seem to overpay for everything because our entire economic system is based on corporatism, oligarchy, fascism, statism, socialism, political corruption and rent seeking cronyism.   Meanwhile, Americans will happily cling to their delusion that healthcare is free.


What the hell are we paying for?  God only knows but whatever it is, it's hugely expensive and there is definitely no bang for the buck.  The health of the American people are the first victims.

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