Obamacare - a HEALTHy discussion

Where does the money come from to pay for the subsidies?

Ah, the $64,000 question.  Actually…the $64,000,000,000.00 question.  Getting exact details on where the money comes from is difficult.  There is a section of obamacarefacts.com that explains in detail where the money comes from.  If you’re skeptical of the information on obamacarefacts.com, I completely understand, but it’s at least a starting point.  Basically, the money comes from taxes and budget cutting.  The claim is that “It’s paid for”.  That’s a complicated statement.  If premiums keep going up, eventually money will have to be added to the deficit.  As of now, it seems to have very little affect on the deficit, and it’s not being paid for by a “credit card”, which is a good thing.  But who knows what the future will hold as far as the ACA being “paid for”.  

Why would insurance companies sign up to be a part of Obamacare if they are making money already?

From a business perspective, the ACA offered a way for insurance companies to tap into a segment of the market they couldn’t break into:  People who can’t afford insurance.  The hard part for the insurance companies was figuring out what this segment of people were.  Were they really sick people that couldn’t get coverage because of pre-existing conditions?  Were they healthy people that weren’t big risks?  Were they young or old?  There were lots of questions, and lots of unknowns.  Now that we have had Obamacare for a few years, here are some things we know.

1.  There were more people without insurance that wanted it than originally thought.  One of the questions was how many people out there wanted insurance, but it was just a little too expensive.  It turns out there were more than projected, which for the exchanges was a good thing.  Enrollment surpassed projections the first year, and is well over 20 million enrollees as of now.

2.  Some insurance companies guessed right about costs…some guessed wrong.  Since this was an unpresidented (sorry…I mean unprecedented) policy, insurance companies had to guess on their costs.  Some of the insurance companies priced their plans appropriately, and have made money.  It has been a positive thing for them.  Some companies guessed wrong about the prices, and have lost money.  This is one of the reasons that the cost of the ACA exchanges have gone up for some.

3.  This is a big one.  One of the projections of the ACA was that people would get catastrophic insurance to start off, and once they saw how nice it was to have insurance, they would increase their coverage.  This was something the President and insurance companies were banking on.  Unfortunately for them, it hasn’t happened as much as they had hoped.  People have been signing up for their plan, and they haven’t upgraded.  This stagnant movement for insurance companies have made it hard for them to add costs to peoples plans for additional coverage.

So why have insurance premiums gone up?

In the ACA exchanges, the insurance companies guessing wrong, and people not signing up for additional coverage have increased premiums.  The other thing that has happened is that some insurance companies are charging people outside the exchanges higher premiums to make up for the money losses on the exchanges.  The ACA also reduces other costs such as birth control, not charging for pre-existing conditions, younger people staying on parents plans longer, etc.  All these things have contributed to higher premiums.  So who’s to blame:  the greedy insurance companies wanting as much money as possible?  Or Obamacare for invading the private market, and disrupting the businesses?  I guess that depends if you watch FOX News, or MSNBC.  I don’t think there’s a right or a wrong answer to that question.  Obamacare aimed to get insurance to people who haven’t been able to afford it, and has succeeded, but has increased premiums to others.  If you have a policy through the ACA exchange, you’re probably for the ACA.  If you don’t, and your rates went up anytime the last 8 years, you’re probably against it.

One of the confusing things to people is the messages coming from both sides.  Perfect example is this:  Lots of analysis show that since the ACA, premiums have gone up, no question.  But they would’ve gone up even more without the ACA.  And because of the ACA, we are getting more for less than without.  The analysis say that premiums were going up no matter what because that’s what insurance companies do.  Republicans claim that there are other studies that show that insurance is more expensive because of the ACA.  For me, this is what gets so frustrating.  How can you have our leaders telling us two COMPLETELY DIFFERENT THINGS ABOUT THE SAME THING?  How can those of us that want to understand the ACA before making a decision about it be getting such different messages?  It’s sooooo frustrating.

The beginning of Obamacare should’ve told us what the future of it, politically speaking, would be.  Republicans refused to participate in the process of creating it, Obama pushed it through quickly, Republicans said from day 1 it would be a disaster.  So of course, the Republicans have to stick to their guns about it being a disaster no matter what.  And Obama and the Dems have to stick to their guns that it is a success.  Meanwhile, you and me get to wait in a healthcare abyss waiting for our fearless leaders (whose families are covered by kush government insurance plans for life by the way, so most of them don’t understand what the problem is!!!) to continue arguing.

Replacement plans

Obamacare isn’t perfect.  But I appreciated the effort by Obama to identify a serious problem, and make a serious attempt to fix it.  The health care system as of 2007 wasn’t working.  Prices were skyrocketing, and more and more people were being left out.  Left or Right, most people can agree with that at least.  I wish Republicans and Democrats could’ve worked together originally, but because of the rocky start both sides are dug in.  I wish a Democrat would come out and say, “Obamacare isn’t perfect, but it was a good starting point.  Lets identify the good and that bad, and try and improve the bad and keeps the good”.  I wish a Republican would come out and say, “Obamacare isn’t ideal, but we like the idea of insuring people that couldn’t normally afford it, so we would like to build on it with some ideas that we have”.  But that would require independent, and free-thinking people who are concerned with the United States citizens best interests ahead of their own.  The exact opposite of most of our congresspeople.

I have tried to be non-partisan in this issue, but I’m going to take up two issues with the Republicans.  As a business owner, I’ve learned that I have to come up with ideas constantly.  I have a friend who is an employee at a company, and he’s always complaining about his company’s owner.  I tell him the same thing over and over again:  It’s easy to be on the sidelines complaining about the decisions the leader makes.  But it gets REAL tough when you’re in charge and all of a sudden you have to make all the decisions.

From the very beginning I’ve heard Republicans complain about Obamacare, but I haven’t heard a serious plan from them.  I’ve heard “Repeal and Replace” over and over and over.  But now that they have the President and the Congress…it’s very obvious that have absolutely no plan whatsoever.  Congressmen are now coming out saying they are worried about repealing Obamacare with no plan in place.  And now to hear them say they will repeal, and worry about replacing later?  Sorry…That’s not what true leaders do.  That’s what followers do.  Complain about the leader and offer no solutions.  Complaining about Obama doing something to try and improve the healthcare system, and getting your base all worked up about “Repeal and Replace”, and then when it comes time to deliver it becomes apparent to everyone that you never really had a plan is weaker than weak.

SIDE RANT:

And now my biggest complaint about anything that has ever been said about Obamacare…

Paul Ryan saying that because of Obamacare, Medicare is going broke.

The first time I heard that, I did a double take.  I thought I knew a lot about Obamacare, and Medicare, but that caught me off guard and I wondered if I had missed something.  I’ve looked into this statement, and my conclusion is that this is such a lie…that it cannot be classified as a lie.  It’s past a lie.  It’s beyond a lie.  I just can’t believe someone in his position says something like this with a straight face.  Is it because the politicians have lied their whole lives and are just so used to it they can do it with a straight face?  I don’t know…but here’s the deal with Medicare and Obamacare.

Medicare is made of 4 main parts.  We’ll call them A, B, C, and D.  This is important because the claim is that Medicare is going broke, and we need to know if it is going broke, and in part because of Obamacare.

Parts A, B, and C of Medicare are paid for through premiums.  If the cost of parts A, B, and C go up…the premiums go up, so there is no chance for those parts of Medicare to go broke.  It’s part D that’s the motherf*cker.  That’s the part that pays for Hospital visits, Hospice, and Nursing Homes.  This part of Medicare is paid for through taxes.  Payroll taxes are around 1.5%…self-employed people, such as myself, get to pay 2.9%.  You’re welcome everyone for paying twice as much as you :) .  This is the part that both sides say is going broke.  But that’s not true.  It’s not going broke.  It’s getting depleted.  When the baby boomers start hitting Hospice and Nursing Homes, the money in part D of Medicare won’t cover the costs.  It will cover approximately 75%-80% of that cost, but not all of it.  So if we keep on the course we are currently on, my generation and the one below me will have to make up that extra 25%-20%.

But let’s get to the part where Mr. Ryan claims that Obamacare is causing Medicare to go broke.  We know that it’s not going broke, so that’s not true.  In fact…not only is Obamacare not making Medicare  go broke…it’s not actually hurting Medicare…it appears as if it’s actually HELPING Medicare.  How so you ask?  Glad you asked…

Remember the Bush Tax cuts to people making over $200,000?  It was a .9% tax cut for them that ran out during Obama’s term.  He let the tax cut expire, and took that money and put it towards that part D of Medicare.  Between 2011-2019 it will put around $60 billion into Medicare’s part D we’ve been talking about.  Obamacare also cut costs, which when all is said and done, will end up well over $200 billion in savings.  All these combined will extend the life of that part D of Medicare by over a decade.  12 years at most.  The fund was looking to become short of money in 2017…now it is projected to be short of money in 2029…a 12 year extension.

Look, I get having an agenda, and wanting to present things from your point of view.  If you want to pass a certain law you’re going to present your side of the facts, and that’s just politics.  But to say something like this does a complete disservice to the people that voted for you.  They vote for you because they believe in what you believe in, and they look to you for the right information.  And when you say something so untruthful to the people that vote for you, it’s a slap in their face.  It also doesn’t help get support for your cause if you have to blatantly lie so bad to get people behind you.  And if you have to lie about something to get your policy passed…maybe your policy isn’t that good.

Back to Replacement plans

Healthcare is such a difficult, and complex thing in this country, I don’t think we’ll ever get the perfect solution.  So here some of the options, according to my friend who owns the insurance company.  He doesn’t like what Obamacare has done to the costs of his insurance, but he admits that it’s a good thing that people that couldn’t get insurance 9 years ago, can get it today.  He also didn’t vote for Hillary or Trump.  He said he couldn’t bring himself to vote for either one.

1.  Keep Obamacare and do nothing-Probably not ideal.  Costs will continue to rise, insurance companies will back out of the exchanges, and it will get messy.

2.  Repeal Obamacare and go back to the old way-Not a chance.  The costs were skyrocketing for people too fast.  It was headed for a bad ending.  Unless you worked a big company that was part of a big network, the costs would eventually get too high.

3.  Single Payer-An interesting thought, but probably not applicable to the US.  My buddies wife was born in England and lived there for 30 years.  She has horror stories about Single Payer.  My friends on the other hand, live in Ireland and they like it.  The problem with most Single Payers is that they just don’t bring in enough revenue for great health care.  Taxes would have to be super high, and people probably wouldn’t go for it.  You could argue that we spend so much on health insurance as is, how bad could it be to get rid of premiums, and just have it taken out in taxes?  The US is so big, and there are so many insurance companies, hospitals, doctors, etc…it would be next to impossible to implement.

4.  Individuals can pick their own - My buddy likes this one the best.  His theory is that if individuals had free reign to pick whatever insurance company they wanted, anywhere in the country, that companies would drop their rates.  If you work at a company that has a big group, you obviously get a discount, but the company and self-employed people are limited to states, and insurance companies inside those states.  Because of this, insurance companies don’t have the competition that’s needed to drive prices down.  But if individuals could get insurance through their work, OR they could shop in nearby states…it would create more competition between insurance companies nationwide.  This would force insurance companies to negotiate more with hospitals and doctors which would force them to lower costs, insurance companies would work harder to negotiate prices with prescription drugs which would force them to lower costs, etc.

That’s his two cents.

There’s that saying, “At least I have my health”.  Unfortunately, for lots of us our health lies in the hands of our currently elected officials, and healthcare is officially politicized.  I am self-employed, and I have asthma.  This is probably the most important issue for me over the next decade.  Whatever the plan is moving forward has a direct effect on my health, and my income.  But I don’t feel like any of our politicians care about that, and that has me worried.  How can our congresspeople who have full coverage for them and their families (or our billionaire President) possibly know what it’s like to have to worry about health insurance and health insurance costs when you’re middle class, and with a family?  It’s become an issue all about how they will get re-elected, and without term limits for congress they will never have the motivation to get it right.  I would hope that people would learn more about healthcare because it is an issue that literally affects all of us.  It’s too important to not have as much information as possible.  

It looks like there are only a few options that could happen.

1.  Repeal and Replace-If this happens, it won’t be till way later this year or maybe even 2018.  The Republicans don’t have a plan right now.  Rand Paul is working on one, but it’s tough to come up with one that quick, and even if they did pass it that quick it would take years to try and implement.  Rand Paul can be a little out there with his ideas, so I have to believe that if his plan is the only one on the table, there will be some traditional Republicans that aren’t comfortable with his out of the box plan.

2.  Repeal and don’t Replace-This is becoming less and less popular with Republicans.  Obamacare money let states expand Medicaid.  And Republican states who hate Obamacare, apparently love the money that Obamacare provided them and they want to keep that money.  Hmmmm…almost sounds like they do like Obamacare.  There are congresspeople that will see this option as a real liability in the 2018 elections.  It just feels like the more and more Republicans get closer to repeal, the more and more we realize they like a lot of the pieces, they just don’t like the guy who came up with it.

3.  Leave everything as is-No clue if this may actually happen, but if enough Republican Senators aren’t comfortable with the new plan, this could very well be the outcome.  For Congresspeople, it’s easier to vote no than to vote yes.  If you vote to pass something, it can be seen as a liability.  If you vote no to everything, you can always say you didn’t vote for anything bad.

Prediction:  I have no prediction.  I have no clue what will happen.  The only thing that will surprise me is if everyone works together on a plan moving forward that will benefit the citizens that elected them.  The only thing I know for sure is that the healthcare issue will be a highly politicized issue moving forward for many, many years, and as of now, there is no end in sight.