When my oldest sister was dating the guy who would eventually become my brother-in-law, I learned how to play chess so that I could have something in common with him, other than my sister.
I got quite good at the game. By the time I reach high school I was one of the top 5 players in my high school. While the other guys were “shooting hoops” I was working on logic puzzles.
I learned from my success two lessons.
- Chess savants do not date a great deal.
- In order to win, a good chess player learns to anticipate what his opponent will do in the future.
The first lesson convinced me that I would need to be a closet chess-player in college. I only ever played in the men’s dorm and took care not to get a reputation as a chess “enthusiast.”
The second lesson is one that I have continued to apply as an adult. I have tried to teach my children, and sometimes I think I failed, to ask themselves, “What could go wrong?” before they do anything.
Now that the boys are grown and out of the house, I still apply the lesson I learned through chess many decades ago. With all the hype about Obamacare, I have to remind myself to ask, “What could go wrong?”
In this post I will share my thoughts about “What could go wrong?”
I have tow concerns about the future of programs in Medicare.
- There is a bi-partisan movement in congress to completely over-haul Medicare and Medicare Supplement insurance. Legislatures, both Republican and Democrat think that if they lower the Medicare A deductible, raise the Medicare B deductible and eliminate all Medigap plans that offer to pay those deductibles for people, they can save billions of dollars in Medicare expenditures.
- The PPACA completely changed how Medicare Advantage plans are paid by the federal government. Since Medicare Advantage plans are annually renewable contracts with Medicare, insurance companies who now charge little, if any, premiums for plans loaded with benefits above what is offered by Original Medicare, may raise premiums, eliminate benefits or both in order to secure a profit.
There is nothing to prevent either possibility from happening in the future.
Since Medigap is a lifetime contract, if my first concern happens, people who already have Medigap will probably not be affected. However, people who are new to Medicare will not be able to get plans with “first dollar” coverage.
I am more concerned about the second possibility. Roughly 1/4 of people, who are eligible for Medicare, have elected to have Medicare Advantage plans. In the short run, those plans are excellent. My fear, however, is how they will look in the long-run.
Medicare Advantage contracts are not like Medigap. While the only thing that can change with Medigap is the premium, insurance companies can change both premiums and benefits each year when they contract with Medicare.
A Medicare Advantage plan could go from a $0 premium to a monthly premium of $100 or more in the future and still have the geographic limitations that most Medicare Advantage plans have.
At this point in history, there is much talk about the high cost of health insurance. Supporters of Obamacare love to scream about the tax-credits and subsidies that will offset the increase in health insurance premiums.
I am concerned about two things in Obamacare.
- Under the current law, people who live in households that make more than 400% of the Federal Poverty Level but do not have access to group health insurance at work are not eligible for any help with the higher health insurance premiums.
- As a future congress and president look to find ways to pay down the national debt, what is to prevent them from lowering the tax-credit eligibility guidelines in the future so that even more Americans are required to pay high health insurance premiums with no help?
Every day I am called by someone who is either self-employed or works for a small business that does not offer group health insurance. Most of these people have been law-abiding Americans for their entire adult life.
Unfortunately, in America, citizens are punished for being successful entrepreneurs. While lower-income Americans get subsidies to help pay their mandated health insurance, these people are not eligible for subsidies. They have to pay much more for a health insurance plan with fewer usable benefits. It does not seem fair.
It reminds me of being a kid who does not want to do what his parents tell him. When he asks them why he must clean his room, he is answered with, “Because I said so.”
Yes, there are many positive changes in Obamacare, however, there is nothing to prevent a future congress and president to try to save federal money by tightening the eligibility criteria for “subsidies” to help pay for private health insurance. In fact, I would be surprised if that did not happen during the next presidential term.
If that happens, millions of Americans who are getting a subsidy in 2014 will not get one in the future. They would have to pay high health insurance premiums just like most of my clients.
Why? Because congress said so!