Opinion | Obamacare needs revisions to ensure benefits for the future
Published: Monday, January 28, 2013
Updated: Monday, January 28, 2013 23:01
It is finally 2013: nearly four years after the passage of The Affordable Care Act (ACA) better known as Obamacare, and the year that a majority of its provisions take effect. So how will this bill affect our generation?
The ACA requires insurers to have no more than a three times difference between their highest and lowest rates.
The goal of this is to curb the cost of health insurance for older folks as healthcare costs rise.
Currently, it is up to 12 times higher, so the rates are being compressed.
For example, if your average rate for a young person now is $100 and older person is $1200, how will they get to the three times difference?
They will get there by increasing the lower rates that young and healthy persons pay and decreasing the higher rates for the older population.
Let’s say they go to a ratio of $300/$900 as the low and high and I ask you as a young healthy adult who goes to the doctor once a year: would you pay a $750 fine annually, or would you pay the $3,600 in premium?
You may buy the insurance, but simple economics states many more will not.
The penalty for not adhering to the individual mandate is not an incentive at all because the law requires the insurer to take anyone at any time, so there is nothing stopping someone from waiting until they get sick to sign up for health insurance.
You can technically be diagnosed with a serious illness, sign up the next day, and the carrier is stuck with the bill of the treatment.
So the theory of having the largest pool of healthy adults is pure fantasy.
It sounds good and that might be the intention but it is nowhere near reality.
None of the people who crafted this have an ounce of experience in the insurance industry.
Let’s say you are 60 years old and not yet eligible for Medicare and have diabetes and a heart condition.
Just because the carrier has to take you does not mean you can afford the premium, even with the tax credits.
We need to bring more into the pool of covered individuals but in the real world, the ACA will not even come close to doing it.
It is the skyrocketing costs of health care that is the problem, and what may bankrupt our country. Americans are generally fatter and in poor health.
Over 30 percent of the population is obese and the incidence of diabetes has skyrocketed over the last 20 years.
MD’s will tell you they practice preventative medicine, and all that means is that they run up to 50 percent too many tests to prevent themselves from being sued.
The ACA did nothing to lower the cost of care, which is the real issue.
As cost of care goes up, that’s what drives up insurance rates.
Medicare is one of the largest drivers of private insurance cost. Medicare reimburses at a very low level.
For example, if an office visit is $50, Medicare might reimburse at $30. The physicians make it up in the private sector.
So you and I pay $70 instead of $50 since the physician has to make up his costs somewhere. This is indisputable.
If Congress and the President passed tort reform to drive the lawyers out of the system and had the guts to require some co-pays or co-insurance on Medicare, this would have solved almost the entire problem.
The states are going to be burdened to put more people on Medicaid, medical care for poor people.
Right now, according to the Ohio OMB, the state of Ohio spends nearly 50 percent of their budget on Medicaid.
However, they are anticipating this to go up to 60 percent when the ACA takes full effect.
At that point, what happens to their other largest expense when Medicaid goes up by 20 percent? Education gets cut or state taxes skyrocket.
There is little doubt about this. So with all these downsides, what has this bill accomplished?
Yes, I’m glad kids up to 26 years old can stay on parents’ plans and lifetime maximums have been removed.
2013 has finally arrived so my assertions may now be put to the test, but I doubt the coming years will have much to offer our generation, unless much of the ACA is revised.