Friday, February 22, 2013

Obamacare - Does Less and Costs More

Obamacare - Nothing to Brag About.

I had breakfast a few weeks ago with friend and colleague who I must leave nameless as I do not have permission to share him as a source. He works as an executive within the national healthcare insurance industry arena and is in contact with customers and clients who are business owners and employers across our great nation. He shared with me some rather shocking news.

More than likely in the past months you have seen articles published in the media about companies like Papa John’s Pizza Restaurants; who have come out and stated that the draconian costs placed on them within the mandates of Obamacare will force them to rethink or restructure their business model with regard to staffing and employees. My healthcare insurance industry friend tells me that virtually all of his clients (employers) will be crunching numbers and business and finance models through the course 2013 as they get ready for full implementation of the healthcare reform in 2014. Virtually every one of them is leaning toward reducing hourly employees below 30 hours a week. In some cases, they would look to reduce salaried staff in order to handle some of these costs; that means lay-offs.

Those of you reading this post - how many of you have friends or family or even neighbors who work hourly wage jobs; say between 30 and 40 hours a week, and even count on some overtime? How devastating would it be to their family budgets if they are among the millions of employees who will see their work hours reduced to below 30 hours a week? Remember, a provision of the healthcare reform law states a definition of a full-time employee as any employee who works 30 hours per week or more. Full-time employees will be required to be given access to healthcare insurance from their employers according to the law; or they must pay the penalty and move these employees to the exchanges.

The more I learn of the details within Obama care, the more absolutely unsettling the picture becomes that is revealed. Pray tell me, can anyone give me an example of any programs that come from “central planners” that have actually delivered what they promised and/or operated with any decent level of efficiency?

I have said before – and I will say it again. What President Obama and so many other progressives say they will achieve with their big plans and programs – almost never comes to pass. They continue to sell the American people on the idea that they are the only ones really looking out for the little guy – but they do not deliver. The actual outcome of Obamacare will end up harming millions of American’s – most of whom will be lower income or younger workers and hourly employees. With all of that – we will still have somewhere between 25 and 30 million Americans still without health insurance (according to the latest analysis by the CBO). Not a very good trade off huh?

Regarding the Exchanges

Insurance premiums are set to explode. Already health insurers, citing the increased cost of various Obamacare provisions, are seeking and winning double-digit premium hikes. For example, California health insurers are proposing increases for some customers of 20 percent or more: 26 percent by Blue Cross, 22 percent by Aetna, and 20 percent by Blue Shield.

Young people are especially likely to face higher premiums. Obamacare’ s “community rating” provisions prohibit changing premiums based on health status and limit the degree to which insurers can charge based on age. Thus, premiums will rise more slowly for older and sicker individuals, but will shoot up for young people. According to a survey by the American Action Forum, healthy young people in the individual or small-group insurance markets can look forward to rate increases averaging 169 percent.

Further, a study in the American Academy of Actuaries’ magazine found that 80 percent of young adults aged 18–29 not eligible for Medicaid will face higher costs, and that 20- to 29-year-olds on the individual market not eligible for subsidies will see their premiums increase 42 percent.

The real theme for Obamacare: costs more, does less.

For example, the Congressional Budget Office has again lowered its estimate for the number of people who will gain insurance coverage as a result of Obamacare. Just 27 million more Americans will be covered by 2023 than would be otherwise, leaving 30 million Americans still uninsured. And roughly 12 million of the 27 million newly insured won’t actually get a real health-insurance plan but will simply be dumped into Medicaid.

At the same time, the CBO now estimates that 7 million Americans can expect to lose their current insurance because their employer will decide to pay the penalty/fine/tax rather than provide Obamacare-compliant insurance (this number is up from 4 million). Not only does that belie the president’s oft-stated promise that “if you have health insurance today, and you like it, you can keep it,” it means that as many as 11 million fewer Americans will have private unsubsidized insurance than before Obamacare, making it look more and more like a government takeover of the insurance industry.

…the exchanges need to be set up by this October if they are to be operational by January 1, 2014, as the law mandates.

Yet there is little evidence that HHS has the money, manpower, or expertise to meet this deadline. While HHS insists that everything is on schedule, they have refused to disclose their plans or release their implementation schedule. Even Democratic Senate Finance Committee chairman Max Baucus is alarmed: He recently ordered detailed accounting of the efforts to set up the federal exchanges by February 26. At the same time, industry groups and others have quietly begun to talk about the possibility that the opening of the exchanges, and therefore the commencement of other key Obamacare provisions, may have to be postponed.

No wonder the president had so little to say about Obamacare. It increasingly looks to be nothing to brag about.

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