Obamacare problems worsen with Burwell on the horizon

Copays and deductibles are up under Obamacare, rates are following, and now with King v Burwell, the Supreme Court may gut the law. How is ACA doing for you?

Obamacare General - Kicking Americans to the Curb
Obamacare General - Kicking Americans to the Curb

WASHINGTON, May 26, 2015 — Recently released information about the effects of Obamacare indicates that the negative impacts of the law are getting worse. The impending Supreme Court decision on King v Burwell could completely gut the law. What will happen next?

President Obama calls the Affordable Care Act a success, noting that 11 million previously uninsured Americans now have coverage. He says that total spending on health care is rising at the slowest rate in a decade. He says the data show that the law is working. Is it?

Prior to the passage of law, which was supported by every Democrat in Congress and opposed by every Republican, about 275 million Americans had health insurance.  Studies indicate that up to 90 percent of them were generally happy with their plans, although rising cost was always a problem. Today, polls show fewer than 50 percent are happy with their plans.

The reason total spending on health care is rising at a slower rate is that Americans are skipping doctor visits and necessary diagnostic tests. They are also not filling essential prescriptions. Why? They can’t afford it. In order to keep the cost of the Obamacare plans down, high deductibles were set.This year the maximum deductible is $6,600 for an individual and $13,200 for a family.

These high deductibles mean that an individual must pay the first $6,600 of non-covered medical costs out-of-pocket before the insurance begins to pay the bills. The result is that people skip diagnostic tests, prescriptions, and procedures.

Another problem is that rates for the Obamacare plans are about to skyrocket.

While all states will not see large increases in rates, states like New Mexico, where the market leader Health Care Service Corp. is asking for a 51.6 percent hike, could see huge increases. In Oregon, Tennessee and Maryland, market leaders are asking for increases of more than 30 percent.

Most analysts say that the reason for this is that the young and the healthy are not signing up. The only way Obamacare comes close to working is to have a large number of people pay for insurance that they essentially don’t want or need, which helps to cover the cost of people who are older and sicker. The young find it is cheaper to pay the fine than to buy the insurance. If they develop a serious condition, they can simply enroll in Obamacare the next day since there is no pre-existing condition clause.

While Obamacare has helped about 4.5 percent of the population by having the taxpayers cover most of the cost of their insurance, the vast majority of Americans who do not have employer based plans are becoming underinsured.

According to the Commonwealth Fund, a private U.S. foundation whose purpose is to “promote a high performing health care system,” approximately 23 percent of the entire adult population between the ages of 19 and 64 are underinsured.

The next problem for the ACA will come within the next few weeks when the Supreme Court issues its verdict on King v. Burwell. Most believe that the court will rule in favor of the plaintiffs. This means, among other things, that about 8 million Americans, who have most of their health insurance bill paid by the taxpayers, will lose their subsidy.  This will likely result in the entire law collapsing.

Although this appears to be a bad thing for many Americans, it will be a benefit to the vast majority, in the long term. Since the Obama administration claims to have no back-up plan, and since Congress is debating a number of possible back-up plans with no consensus, a compromise will have to be reached.

Historically the President would bring in the leaders of the opposing party and hammer out a solution, much like President Reagan did with Tip O’Neill and President Clinton did with Newt Gingrich. This president has a poor relationship with the opposing party, mostly because he seldom considers their position. Now he will be forced to deal with them.

In the end a new health care law should emerge that not only considers the needs of the lowest income earners, but also considers the needs of the silent majority of Americans.

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