Failed Obamacare Promises


Obamacare 1Author:  Tim Barnes

Most everybody has seen the movie, “Top Gun.”  It is a modern-day classic.  In the movie, the commanding officer tells a hot-shot pilot, “Son, your mouth is writing checks your body cannot cash.”  In other words, the hot-shot pilot was making verbal promises that he could not keep.

Unfortunately, that phenomenon is not limited to the fantasy of movies.

Over the last few years the United States has been divided over the Patients Protection and Affordable Care Act that the 111th congress rushed through.

In my opinion, reform of 1/6 of the national economy should have been handled as a constitutional amendment so that all the citizens of the United States could voice their opinions and desires.  However, the politicians in D.C. did not ask me.

The politicians in congress elected to listen to people like Nancy Pelosi and Harry Reid rather than the people who elected them.  The bottom line is that whether I like it or not, the PPACA, aka Obamacare, goes into full effect at the end of this year.

In this post I want to share with you some of the promises that were made during the Health Care Reform debates that will not be kept.

Use the form to ask your insurance question.
Use the form to ask your insurance question.

NO MORE BANKRUPTCIES

One of the louder arguments that politicians made in support of the PPACA was that many Americans were finding it necessary to file bankruptcy after they got severely sick even though they had health insurance.  Obamacare was supposed to make that impossible.

Unfortunately, that is not going to happen for 2 reasons.

  1. If people had health insurance, the medical providers got paid.  The thing that caused most bankruptcies were pressure from non-medical creditors.  Although the hospitals and doctors got paid, the landlord and car payments did not.  The ones who were forced to file for bankruptcy protection either did not have sufficient savings or insurance supplements.  If you do not have sufficient savings you will need either Disability Income or Critical Illness insurance until you have saved enough money.
  2. All of the proposed Essential Benefit Plans have cost-sharing elements like deductibles and co-insurance.  Although they are required to have an out-of-pocket maximum to limit your personal liability, they do not provide money to pay for your non-medical bills while you recover.  You still face a possible bankruptcy if you do not have sufficient savings or the right insurance supplements.

MORE COMPETITION

The politicians in the 111th congress promised that if Obamacare was passed, it would stimulate more competition in the marketplace.  It had the exact opposite effect.

As the new mandates of the PPACA became active, insurance companies tried to deal with the new regulations with lay-offs and eliminating home office jobs along with alterations to their portfolios.

However, the new regulations were too much for some companies.  Most insurance companies stopped writing lines of business.  For example, when medical underwriting was outlawed for juveniles, most insurance companies stopped offering coverage for children only.

Some insurance companies consolidated and withdrew from states.  One insurance company, who was a major provider in the state I live, anticipated Obamacare in the last quarter of 2009.  They sold their Texas business to another insurance company and left the state completely.

Other insurance companies did more than just consolidate.  I am aware of several insurance companies who gave up and went out of business.

Americans were promised that we would have more competition if only we accepted Obamacare.  Well, Obamacare is law but the number of options you will have in 2014 are less than what we had in Texas in 2009.

If you are going to be a law-abiding American, you will need to choose an Essential Benefit Plan in 2014 but you will need to choose, in many cases, from a smaller list of approved insurance companies than what was available in 2009.

LOWER PREMIUMS

One of the big things that Americans were expecting were for their premiums to be lowered as a result of the PPACA.  That is not going to happen for most Americans.

Only the oldest Americans, who are approaching Medicare eligibility, will see any premiums that are lower.  The majority of Americans are going to see premiums increase.  From what I am reading, the younger you are, the bigger your “Rate Shock” is going to be.

Each week I send an educational email to my clients on recent trends in insurance.  In 2013, most of the information is about recent developments in Obamacare.  It is no problem to send that email to you at the same time.  If you want to be added to our email list, click the banner below.

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