Obamacare's Side Effects on Citizens & Consumers
Effect: Higher Premiums
- This is a great Heritage Foundation article that comprehensively lists all the factors that will make the insurance premiums rise.
- Due to the rising cost of healthcare, businesses (especially small businesses) are gravitating towards smaller health plans that have lower premiums and a smaller network of participating doctors and hospitals. However, despite the promise of Obama that the consumer would have a variety of choices, these types of health insurance may stop to exist due to the premium rates going up. The reason for the higher premiums is because under the new law, the government will dictate what benefits the health plans will offer. Therefore, the more generous the required benefits package, the higher the insurer will have to increase the premiums. On top of that, Medicare will be vastly expanded. This means that doctors will be treating more patients at Medicare's below market rates. To cover their losses, the doctors will have to charge the private insurance even more. This will drive up the health costs even higher. A side effect of the higher costs is that insurers and employers will look for ways to save. One such way is to restrict provider networks, which will narrow the quality and the choice of doctors for us patients.
- Starting September 23, 2010, insurers cannot deny coverage of children based on pre-existing conditions. This sounds nice, but it actually has bad side effects. Most children are covered under their parents' insurance plans. However, some parents do buy individual insurance plans for their kids. Since insurers are now required to essentially cover all kids who sign up a policy with them, this destroys the entire idea of insurance. As a result, families will not buy the children's policies in advance. Instead they will wait until their kid gets sick then buy the policy, where upon the insurers are required to pay for the medical bills of the child. Obviously this will cost the insurers more money. As a result, they will be raising their premiums or stop offering these children coverage policies since they are too expensive for the insurers. In fact, premiums could increase by up to 20 %. Blue Cross and Blue Shield, Aetna, and Golden Rule, as well as many insurers in Florida, Oklahoma, and Kansas are all no longer offering children's policies.
- A new analysis by Rand Health predicts that premiums for young adults could rise by up to 17% due to a new age rating requirement, which bars insurers from charging older patients much more than the younger.
- Obamacare also now adds kids under 26 years old to be added to their parents' health plan. Obama announced this in front of a roaringly cheering college crowd.(At 11:59) However, this is not free. Contrary to President Obama's claim that the new healthcare law will end up saving each American family about $2500 in annual premiums, this adding of kids will cost each American family about $3380 per dependent whether the parent wants it or not.
- According to a study by Aon Hewitt Associates from September of 2010, premiums will continue to go up in 2011 by an average of 8.8%, employee contributions will go up by 12.4%, and the cost of healthcare will be the highest in the last five years.
- Even Democrat Senator Dick Durbin of Illinois admits on the Senate floor that premiums will go up if the healthcare bill is passed.
- In September of 2011, this Wall Street Journal article showed that employer's healthcare premiums went up 9%.
- In February of 2011, Californians are bracing to pay for more healthcare costs.
Effect: Higher Taxes
- Obamacare will tax all "Cadillac" health plans, which are expensive plans rich in benefits. Even the Democratic special interest group, the Unions, complained about it. As a result, the Democrats have delayed the tax until 2018.
- Obamacare will also tax the drug benefits of retirees. This is doubtlessly encourage companies to either scale back or drop their retiree drug benefits altogether, seriously disrupting retiree's health plans.
- There is also a real estate tax for a married couple making more than $250,000 in adjusted gross income or $200,000 if you are single who receive a capital gain on the home sale exceeding $500,000.
Effect: No More Medical Savings Accounts
- Health savings accounts are popular features of many people's health plan where you can set aside a certain amount of money you choose into a savings account. This amount you set aside is not taxed as part of your income and can only be used to pay for healthcare related expenses. This can include co-pays, over-the-counter drugs, deductibles, eyeglasses, and even dental work. This idea allows the patient to be in charge of how their money is spent on healthcare. This encourages people to be responsible with their money so that overall healthcare costs can remains low. Without this, healthcare costs can easily be raised by hospitals and other providers when consumers are not involved but only the employer who provides the insurance.
- If your plan comes with a Health Savings Account (HSA) or Flexible Spending Account (FSA), Obamacare now makes it far more difficult and unappealing to use these accounts to the point where they will become obsolete.
- Obamacare restricts the type of health products you can purchase with your HSA money and the new law reduces the amount of money you'll be able to put into your FSA.
- In addition, Obamacare imposes a 20% tax penalty for withdrawing HSA funds to cover non-medical expenses.
- Obamacare also prohibits using your FSA on certain health aids such as over-the-counter drugs used to control many chronic illnesses. There will also be a cap at $2500 per year.
- But the worst part is that Obamacare requires all policies to cover at least 60% of the actuarial value of the benefits offered. No one knows what the "actual" value of the benefits is, since the Health and Human Services Department issue regulations on how to calculate it. If HSAs are not included in these actuarial calculations, then high-deductible health plans with HSA will be invalid and those health plans will be gone. These medical savings accounts allowed patients have a say in how their money is spent. But with Obamacare, that decision-making power is now shifted to the government.
- In fact, the state of Indiana has a health savings type of plan for their low income people and for its state workers which has been wildly successful in curbing costs and effectively treating the consumers. These plans will be wiped out by Obamacare, which will have terrible consequences for these people who have these successful plans, as well as future tax hikes that will cost Indiana between $3.1 to 3.9 billion dollars.
- In fact, here is the beginning of this law that goes into effect starting January 1, 2011 that says you cannot use FSA money to buy over-the-counter drugs unless it is accompanied by a prescription. This is a beat-around-the-bushes way of saying that you cannot buy over-the-counter drugs alone with FSA anymore. More of these restrictions to come.
- Starting on January 1, 2011, you'll no longer be able to set aside pretax dollars in that account to use for medicines bought without a doctor's prescription. That change — and another coming in 2013 that will limit the amount of money that can be saved pretax in the accounts to $2,500 per year — is intended to help pay for the new health overhaul law. That's because every dollar a worker puts into a health FSA is a dollar that worker doesn't pay taxes on. So limiting how much the worker can save, or what the money can be used for, increases the workers' tax bill.
Effect: The Cost of Prescription Drugs Will Increase
The Congressional Budget Office released a letter that shows a study where the cost of prescription drugs will increase due to the billions of dollars of new fees the drug companies must pay under Obamacare.
Effect: Senior Citizens Will Particularly Be Hurt By This Law
- According to a Heritage Foundation study, seniors will especially be negatively impacted by Obamacare. This is because the new law will cut Medicare Advantage by half, reduce healthcare access due to more baby boomers entering Medicaid, further reduce Medicaid payments, and new higher taxes on drugs and medical devices. This great Wall Street Journal article articulates in details how $200 billlion will be cut from Medicare Advantage to expand Medicaid. It uses a real life family as an example, where the son's diabetic conditions may be covered by the expanded Medicaid by the cutting from his mother's medical costs.
- In September of 2010, Harvard Pilgrim Health Care dropped its Medicare Advantage program. Medicare Advantage is a supplemental program to Medicare, which only covers about 60% of the medical bills. Medicare Advantage covers that 40% gap for those who cannot pay for that gap. About 24% of those on Medicare are on Medicare Advantage. This leaves some 22,000 senior citizens to find some coverage for portions of their insurance no longer covered by Medicare Advantage. Harvard Pilgrim did this because of Obamacare's plans to cut Medicare, which will fund Obamacare. This will effect people with an income of $32,000 or less per year. And so it really hits those who cannot afford further coverage. Also within four years, some 7.4 million seniors will be dropped by Medicare Advantage. Plus Obamacare creates a panel of unelected bureaucrat known as the Independent Payment Advisory Board (IPAB). Their sole job is to cap Medicare spending. The reimbursement rate of Medicare is not 100%. In other words, the government is not able to always pay the full bill of the seniors that use Medicare. This non-payment is what's causing many doctors to not accept Medicare patients, leaving them with fewer choices of doctors. The IPAB's decisions will further lower the Medicare reimbursement rates, leaving more seniors without medical coverage. Despite all this money being cut, Obama will be spending millions of dollars on advertisement campaigns to sell this law as a good thing.
- Many of these seniors are happy with Medicare Advantage (88% according to a poll) and a study shows that it lowers costs and creates substantial savings. Despite this, Obamacare will decrease the benefits of those receiving Medicare Advantage. This will especially affect those residents in Florida, home to some 3 million Medicare Advantage enrollees.
- This great Wall Street Journal article articulates in details how $200 billlion will be cut from Medicare Advantage to expand Medicaid. It uses a real life family as an example, where the son's diabetic conditions may be covered by the expanded Medicaid by the cutting from his mother's medical costs.
- A senior citizen writes that Obamacare will ultimately play with their lives since it will result in rationing.
- This careful research study by the Heritage Foundation show the impact of the Medicare Advantage reduction by each region:
Effect: Young Persons Will Also Be Especially Hurt By This Law
- Obamacare also makes it difficult if not impossible to provide certain college students with health insurance. Although Obamacare says that it will cover children on their parents' insurance plan until the children are 26 years old, there are many college students who either do not have a parent or whose parent does not have any health insurance. What do these students do for health insurance? Colleges actually offer some health insurance on a smaller scale but they do not meet the requirements of Obamacare and so they cannot be offered. The American Council on Education wrote a letter to HHS Secretary Kathleen Sibelius about this concern and many colleges are seeking exemptions from Obamacare.
- This research paper from the Cato Institute thoroughly explores the impact of Obamacare on young persons in a simple and easy to understand manner. The result of this law include: how young persons will end up paying more for older persons' health insurance despite accessing the healthcare system less, avoiding jobs that offer health benefits because they prefer jobs with higher pay, and how the individual mandate will drive up premiums for young persons.
Effect: Tax Dollars Will Go Towards Abortion
According to a new Congressional study, the abortion restrictions applied to the new law would not apply towards high-risk pools run at the state level. This loophole would allow tax payer money to fund abortions. The high-risk program, called the Pre-Existing Condition Insurance Plan, was meant to help those denied coverage over pre-existing conditions until the broader provision of the law go into effect in 2014. The law set aside $5 billion in federal subsidies for the program, which is supposed to be either administered by the state or the Health and Human Services Department.
Effect: Disincentive to Marry
Americans will find it more advantageous to stay single than marry because it will be easier to afford health coverage. Obamacare provides generous subsidies for those without insurance so they can buy it on the new exchanges, but the subsidies are tied to one's income level, which is based on families rather than individuals. Two singles would each be able to earn $43,000 and still receive help to purchase health insurance, but if they got married and combined their earnings to $86,000, they would be far above the limit. Great law.