In a recent article I wrote about misdirection in healthcare and I asked the following question:
What is the worst health insurance plan one can buy? Answer: Obamacare
Obamacare only pays the bills, no one is any healthier; it forces the young to pay for insurance when they are healthy, thus producing pure profit for the insurance companies and robs the young of purchasing a car or a home
I received a number of negative emails about my criticism of the ACA: Affordable Care Act (aka Obamacare). One physician even demanded I write a retraction given that a few million Americans now have healthcare insurance who wouldn’t have insurance coverage without the ACA.
I responded by saying all healthcare insurance plans are unaffordable, including the ACA. A prime reason I gave was that it doesn’t make Americans any healthier, but it does pay doctor bills, which is why doctors favored it out of their own self-interest, which gives them a biased view.
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Furthermore, by virtue of the expansion of coverage it actually raised the total cost of care. The passage of the ACA added hundreds of billions of dollars to Medicaid budgets as many low-income families discovered they qualified for Medicaid rather than ACA subsidies. For example, Medicaid spending rose $107 billion in 2014 as the ACA was promoted throughout the U.S.
Insurance industry-led reform
Furthermore, the ACA was schemed up in the White House when the Executive Branch met with health insurance executives in 2013 who were in negotiations over the problematic issue of insurance plans not accepting new applicants who had preexisting health conditions. (A photo of that meeting can be found here.). In other words, it was an industry-led rather than a consumer-led effort.
The insurance industry said it would offer insurance to individuals with prior health conditions if the federal government would find some way to force young healthy Americans to buy health insurance. What resulted was a law that forced young people to buy health insurance or face a fine. Young healthy Americans who generally don’t buy health insurance were now forced to buy insurance and pay the same premiums as people with serious illnesses.
A lot of game playing ensued. Healthcare insurers, knowing it would look like President Obama was playing footsie with them, initially feigned opposition to the ACA and gave the Chamber of Commerce $86 million to oppose the law.
Young workers can’t pay for health insurance and buy a car
This resulted in young workers having to forgo buying automobiles because they couldn’t afford them and still make monthly payments for health insurance. Auto sales by young Americans tumbled in the post ACA era. The deductibles were so high in the ACA plans offered that they represented pure profit for the insurers.
The health insurance industry needs healthy young Americans who generally need little or no health care to help pay for the growing number of older adults who generate most of the healthcare costs today. The ACA helped to fix some of that problem, but subsequently many insurers found the ACA to be unprofitable and backed out of what has been coined as Obamacare (which actually started during the Bush administration, so let’s not solely tag this broken plan on Mr. Obama). However, Obamacare became the signature legislation by which Mr. Obama wanted to be known for as he left office.
Employers balked
The ACA also required large employers to provide health insurance coverage for their full-time employees (defined as a 30-hour work week) or face penalties up to $3000 per employee. Even small employers were forced to eventually provide health insurance at a staggering increase in the cost of doing business.
Major employers balked and threatened they would shift their workers to part-time status. To escape the pressure building in Washington DC that Mr. Obama’s prize health insurance plan for the uninsured was coming unglued, Barack Obama left town dragging his tail and ended up in South Africa.
Business interests lured George W. Bush to go there bring him back to save his reputation. That was early July, 2013. By October of 2013 Americans began shopping for health insurance on exchanges. News agencies never reported it this way.
Employers shifted to part-time workers
Employers eventually couldn’t financially bear the burden of Obamacare and the National Bureau of Economic Research reported 28,000 to 50,000 businesses had slashed the number of full-time employees during the period 2014-16. Hundreds of thousands of full-time positions were eliminated. All this for the first black President of the United States to declare the ACA as his chief achievement while in office.
Obama “owns” the ACA and took umbrage when a judge in Texas recently ruled the individual mandate of the law as unconstitutional. He continues to communicate with his voter base over this issue. Despite needed reforms, Mr. Obama posted a statement on Facebook: “The only way to convince them to stop trying to repeal this law, and start working to make health care better, is to keep voting, in big numbers, in every election, for people who’ll protect and improve our care.”
In 2017 Congress eliminated financial penalties associated with failure to comply with the mandate, which becomes effective this year 2019. The penalty for not buying health insurance was reduced to $0. Elimination of the mandate is predicted to reduce the number of insured by 3 to 6 million.
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Insurance companies ask government to cover their losses
Forbes.com reports, after two years offering uninsured Americans subsidized products on public exchanges, health insurance companies have been hard-pressed to find financial success in this segment of the Affordable Care Act with losses reaching billions of dollars for the industry. A major insurer, Aetna, completed its full withdrawal from Affordable Care Act insurance exchanges in 2018.
Now more than 100 health-insurance companies are suing you and the rest of America’s taxpayers to pay for their losses incurred under the ACA. Insurers want taxpayers to bail them out for money they lost trying to sell Obamacare plans — a whopping $15 billion. A ruling on this from the Court of Appeals for the Federal Circuit is expected soon.
Trump vs. Obama
A problem is that Mr. Obama has taken all this on his chin. Many disenfranchised minority and low-income Americans express their gratitude for what they felt Mr. Obama did for them. This healthcare insurance drama is part of the ongoing political polarization in America. On the other end of the pole is President Trump who looks like an ogre, dismantling the ACA piece by piece.
In enclaves of Obama voters, cities are adding Barack Obama’s name to streets, highways and landmarks. Many Americans hold Mr. Obama dear to their hearts, especially as the first African American President. Any criticism of Mr. Obama seems unjust to his supporters, regardless of the failings of the ACA.
Historically Mr. Obama didn’t appear principled on his ideas about healthcare insurance coverage. He once advocated universal health care and was reported to be a vocal critic of mandated health insurance, then excluded single-payer advocates from White House healthcare summits and strongly embraced mandates on employers and individuals.
President Trump has responded by moving to make cheaper Obamacare alternatives eligible for employer-based subsidies. These plans are 80% cheaper than the Obamacare average. But Trump is not likely to get much credit for that.
President Trump also announced expansion of a program that would allow employers to give workers cash to buy their own healthcare coverage elsewhere. Trump wants choice and competition to prevail. Trump may be doing what is best for the nation and employers but it is uncertain whether his actions will be recognized by an antagonist news press or rewarded at the voting booth come 2020.
Mindless Democrats persist; race card played
Democrats want to cement Obamacare into practice and Governor Andrew Cuomo of New York wants the legislature there to copy all of Obamacare’s statues into state law even though those regulations resulted in premiums more than doubling in a five-year period!
The pro-Obama news press wants to give the nation’s first African American President a legacy. Any opposition to Obamacare is even considered racism. A commentary published in the Boston Globe said: “the naked truth is that racial resentment directed toward Obama set off a chain of events that will likely cause 20 million people to lose their health insurance…” A report in Time Magazine said: “Racism is Part of the Health Care Debate.” In Louisiana the Democratic Party chair said: “Those who oppose Obamacare are racist.”
I am not an apologist for Trump’s past immorality and unfaithfulness to his wife, and I loathe when our President makes sometimes impulsive and ill-advised statements, but any health insurance plan has to be fiscally sane. Billion-dollar losses by the insurance industry cannot continue to give Mr. Obama an undeserved legacy.
Cult of the Presidency
The cult of the Presidency persists, twisting current history to produce false imagery. I’m glad George W. Bush eventually didn’t brandish that infamous “Mission Accomplished” banner at his Presidential library, a banner that was displayed on the USS Abraham Lincoln in the aftermath of 9-11 and the height of the Iraq war as Mr. Bush gave a speech on the deck of that aircraft carrier. The Iraq war went on for 8 more years after his speech was delivered in 2003. Later Mr. Bush conceded: “Obviously some of my rhetoric has been a mistake.”
Back to reality
In rural Kentucky where Obamacare produced a record drop in the number of uninsured, 82% of voters supported Trump, citing their real frustrations with high premiums and deductibles. So there are substantive, not just political or racial reasons, for objecting to Obamacare.
What’s next in the battle over healthcare insurance? “Medicare for All? Democrat Presidential hopeful Kamala Harris wants to “eliminate all that (private insurance) and “move on.” That may resonate with voters (Harris drew applause when she said this), but it is an impossibility, not only because America doesn’t have enough doctors to deliver universal care, but it simply can’t afford to deliver universal care, as I show below.
My response to the physician who took me to task for claiming Obamacare as “the worst health insurance one can buy” was as follows:
I’m not sure physicians understand the financial predicament of the country.
According to economist John Williams of SHADOWSTATS, the country generates ~$19 trillion in GDP and collects ~$3.4 trillion in taxes.
There are 3 major funds:
General fund
Medicare
Social Security
Due to the population bulge of Baby Boomers and the decline in birthrate (US is population neutral or in slight decline because women are only having 1.8 babies) there are fewer young workers making FICA payments than there are RETIREES. The ratio is ~2.5 workers contributing to FICA (Medicare/Social Security) for every retiree. (As an aside, this is the reason immigrants are allowed across the southern US border, to increase the number of younger workers.)
The MEDICARE and SOCIAL SECURITY TRUST FUNDS are empty, only holding prioritized IOUs (Federal Reserve Notes or Treasury Bills – T Bills). So, the GENERAL FUND has been merged with the MEDICARE and SOCIAL SECURITY FUND and some of the funds needed for MEDICARE now come out of current tax collections and the rest every two weeks from FICA payroll deductions from young workers. So essentially MEDICARE is broke.
The above chart confirms part of Medicare outlays now come from the general fund.
The country spends ~$6 trillion and only collects $3.4 trillion and is essentially printing electronic money into existence to pay its bills and thus creating a dollar that is losing ~6-8% of its value due to inflation annually because of the flood of available money into the economy (data ShadowStats.com). Therefore a worker who earns a salary needs to ask for a 6-8% raise in pay every year to keep up with inflation.
This is why salaries need to increase and Mr. Trump knows this and attempts to give tax cuts to the middle class because pay increases by employers are largely out of the question as the cost of goods and services would rise commensurately.
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It is in this scenario that OBAMACARE and other UNIVERSAL health plans are mandated or proposed. The US not only doesn’t have enough doctors to deliver UNIVERSAL health care, but it certainly doesn’t have the funds.
Balance the budget and the economy collapses. This is why you see PRESIDENT TRUMP attempting to reduce large government expenses, Korean military expenses being a large line item in the Federal Budget, so Mr. Trump attempts a disarmament plan, and outlay for NATO and United Nations also coming under his budget knife. Mr. Trump refuses to enter into the PARIS ACCORDS and make a $1 billion progress payment for the control of global warming because the US simply doesn’t have the money. That is also why you see Mr. Trump going after trade imbalances with CHINA (Trade imbalance $500 billion; Trump wants $200 billion of concessions out of China, China offered $70 billion). Love him or hate him, Mr. Trump is at least financially sane. Otherwise insolvency looms.
Any day a foreign entity like Japan or China holding a trillion dollars of US T-bills could sell them off at 30% discount and crash the value of the US dollar in foreign trade which would cause a rise in the cost of imported goods. So, you see Mr. Trump pushing for US-made products. (The real unemployment rate is ~20% not the quoted 3.7%). And the US keeps aircraft carriers off the coast of any country that dares to sell off our T-bills at a discount.
Hence, my claim SELF CARE is the only affordable care. Everything else is simply not affordable.
