Obamacare and More

Well, it looks like another big wave is starting to break.  Probably shouldn't have turned our backs on the ocean.

The "Affordable Care Act," aka "Obamacare," is over 900 pages long.  Nobody knows all that's in it; nobody knows how all the different sections of the law will interact with each other in practice; nobody knows what the next big surprise headline will be.  But we DO know a few things:

1.  Obama was genuinely surprised to find out that he'd been lying to people for years when he told them not to worry, because if they already had health care they liked, they could keep it despite the enactment of Obamacare.  Not good that the principal architect doesn't know what he's built-- "Frankenstein," anyone?

2.  Premiums for individual health insurance policies "in compliance" with Obamacare requirements are going to be at least triple what most people were paying for "non-compliant" individual policies before the enactment of Obamacare, and although there was a lot of talk about some non-compliant plans being "grandfathered in" that won't happen with any plan that's undergone a "major change" since enactment of the law-- i.e., virtually all of them.

3.  If you can't afford to pay for a "compliant" individual policy because the premium is too high, people who make very little money will be eligible to have a big chunk of their premium paid for them by the government-- i.e., the taxpayers-- but ONLY if they buy "compliant" insurance available through the exchanges set up by the Federal government or several of the states.  (In case you're worried about insurance company profits, don't.  They don't care whether they get paid by the individual policyholder or the government, so long as they get paid, and there's no limit as to what they can charge for the insurance they sell.)  Bad news: no matter how little money you think you make, you're still likely to be paying more for your insurance when the dust settles... even after factoring in a subsidy, if applicable.  But good news: even if you're 80 years old, you'll have maternity coverage.

4.  The plans available through the exchanges provide coverage through "narrower" networks of providers, meaning that only a fraction of the doctors in the insurance company's "regular" networks will be accessible by persons insured through the exchanges, and the odds of a particular doctor being accessible are lower across the board.  In some cases, it will be very hard indeed to see a doctor with a particular specialty, and long drives and long waits for an appointment are going to be in a lot of futures.

5.  Many of the plans offered through the exchanges offer "good quality healthcare at an affordable price" by simply bypassing major medical centers like UCLA or Cedars-Sinai (to name a couple of L.A. favorites.)  Where will the "insureds" be going instead?

6.  Not to harp on a small point, but so far it doesn't look like the government has the capacity to sign up all of the necessary participants by the deadlines it set for itself (and for the signer-uppers, too, if they want to avoid paying a tax penalty.)  The Federal website still doesn't work, and EVERYBODY is keeping a tight lid on how many people have actually managed to sign up so far.  This is fairly alarming, given that the sign-up deadlines are fast approaching, and the Feds have mentioned figures like 16 million as the numbers of people they've got to sign up in the first year to make this plan work.

7.  The plans won't work anyway unless a lot of young, healthy people, presumably those without insurance from their job or school,  sign up and pay those premiums instead of simply skipping it, as most young healthy people with no money have traditionally done.  After all, the penalty, at least for the first couple of years, is a small fraction of the premium, even factoring in a subsidy.  On the other hand, everybody with a pre-existing health condition who does want insurance is going to sign up for sure, (well, they will if they can get onto the website) and maybe get a subsidy.  The math is not looking good.

8.  The people who actually manage to sign up for insurance may not understand just how little they are getting.  "Bronze" insurance plans available through the exchanges are basically the same as having no insurance at all, except that they come with the privilege of paying hundreds of dollars a month (or for some, helping the government pay hundreds of dollars a month) to insurance companies for the privilege of not receiving benefits.  These plans, like most of the others, include high out-of-pocket limits, and pay only 60% of covered medical services.  Not a good deal, especially if you're a gambler and understand the odds. Besides, a real gambler would just "go bare," anyway, since the emergency rooms will still have to treat you even if you're non-compliant.

There's more, of course... and we'll continue to have more nasty surprises as the law goes into effect.  For example, many or even most small employers (under 50 "full-time" employees as defined by the statute) may bail on providing health insurance benefits once they realize that a) they don't have to; and b) it's O.K. because the government has guaranteed "affordable" health care to their employees who buy individual policies; and c) they don't really have a choice,because it's too complicated and expensive to offer the benefit any more anyway.  As for the large employers, who will (eventually) be required to provide coverage for their employees, they too have a choice.  They can reduce the size of their workforce to keep the cost down; they can eliminate jobs so as to avoid the requirement; they can provide a really crappy (but cheaper) benefit; or they can pay a fine (which, as with the individual penalty, might actually wind up being cheaper than being compliant.)  Employers have to watch out:  if they provide an insurance benefit that costs too much, they will wind up paying a penalty, too, which is actually higher than the penalty for not providing the coverage at all.

Over the last couple of weeks, it has become apparent that even the proponents of this crazy 900+ page law-- up to and including the Proponent-in-Chief himself-- have absolutely no idea of what it says in the aggregate or what its pitfalls will ultimately turn out to be.  Mr. Obama, for example, "didn't know," (until 2010, anyway) that people would lose their health plans and their doctors because of the provisions of his Brave New Law.  The Administration (in particular Kathleen Sebilius) "didn't know" that the government website, which was rushed online without being tested, wouldn't work.  And nobody but the health insurance companies seems to have realized that this law does absolutely nothing to "rein in the cost of health care," while at the same time providing a Wall Street Bailout-style windfall of increased (and now mandatory) premium payments for the health insurance companies.

The Tea Party is full of anarchistic, incoherent rabble-rousers, but it's got one thing right.  This particular law, ostensibly designed to "fix" the "health care crisis" in America, is actually making it worse.  It needs to be scrapped, and a new law written to take its place, one that requires universal healthcare (whoops!  Just lost the Tea Party)-- not semi-universal health insurance-- and provides for a single payer (i.e., the U.S. Government.  Yes, I'm a Socialist on this one) and if we can't get it together to do that, we should leave it alone.  Although the "marketplace" wasn't doing a good job of delivering "quality health care at an affordable price," it was doing better for most people than the Affordable Care Act will do.