Saturday, June 8, 2013

Throwing Good Money After Bad

Trey Smith

In compliance with the Patient Protection and Affordable Care Act (ACA), signed into law in 2010 by President Barack Obama, the state of California is the first to implement its own health insurance market under the name Covered California. The 13 carriers available will include both for-profit and so-called non-profit insurers, as well as local entities.

Covered California includes four main coverage plans — bronze, silver, gold and platinum — the lowest of which (bronze) only covers 60 percent of average annual costs, resulting in an annual out-of-pocket maximum cost of $6,350/individual or $12,700/family. The most expensive plan (platinum) will cover 90 percent of average annual costs with an annual out-of-pocket maximum cost of $4,000/individual and $8,000/family.

A fifth, so-called catastrophic plan will be available to people under 30 and will trigger only after $6,000 in medical costs has been paid by the insured.

For working people, the plans are not inexpensive to begin with. Insurance companies will charge 25-year-olds up to $190 per month for a bare-bones plan in Los Angeles, while a 40-year-old in San Francisco will pay up to $525 per month for decent coverage. Uninsured Californians must pick from between one and six companies, varying by location.

One of the most reactionary provisions of the law is the “individual mandate,” which will legally coerce people who are not covered by Medicare or Medicaid, and who do not receive coverage from their employer, to purchase private insurance or pay a penalty. This is the feature that insurers have enthusiastically welcomed, as it creates a new market worth hundreds of millions of dollars for the insurance industry.
~ from California First US State to Implement Health Care Exchange by Danielle DeSaxe and Marc Wells ~
For all of you who have hailed Obamacare, take a gander at the figures presented in the second paragraph above. Not only will poor folks be forced to cough up monthly premiums, but at the bronze level, they still may be on the hook for spending thousands of dollars more per year. What this may easily mean is that the lower classes will end up paying more under this reform than they presently pay now! (Ooh, what progress!)

As I have pointed out before, one of the chief problems with this legislation is that it does NOTHING to rein in costs. My guess is that premiums and annual out-of-pockets expenses will increase each year. All this will do is place the working poor and the middle class between a larger rock and a harder place. Either you play by the rules of the system or you run the risk of being fined for opting out. Either way, a lot of people will find that they are spending more money for less services.

In my estimation, Obamacare is nothing more than an unstated bailout of health care insurers. Far worse, it's not a one-time bailout, but one that will go on year after year after year. And even worse than that, this is an industry that doesn't NEED a bailout in the first place!!! 

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