Obamacare   

It is now March 23, 2017 and much has changed since the Affordable Care Act (Obamacare) became law.  The Republicans now have the house and senate and Donald Trump occupies the oval office. 

Today may be the day that the Republican plan to repeal and replace the ACA comes to a vote on the floor of the House of Representatives.  Win or lose, there is no doubt that big changes are in the wind.  After the dust settles and we know the outcome, this page will likely be amended to reflect the new reality or possibly just deleted from the website.  We will see. 

In the meantime, following is an overview of Obamacare from its inception and a bit of history on its evolution.

Obamacare was signed into law on March 23, 2010 which makes it almost seven years old as of this date, yet it is still very much a work in process, evolving into "who knows what".  It started out at over 2500 pages of incredibly complex minutiae and much of it is still being drafted.  Few members of congress actually read what they were voting for including then Speaker of the House, Nancy Pelosi, who infamously said, "We have to pass the bill so you can find out what's in it".  As an unnamed doctor said, "it sounds like a stool sample to me".  

The main objective of Obamacare is to bring equality for all into the healthcare system by making sure that everyone in the U.S. has health insurance.

The following paragraphs attempt to examine the original Affordable Care Act including its main objectives, who it affects, how it is paid for, the quality and quantity of care it provides and its impact on the economy. 

To start out, it’s a miracle that Obamacare became a reality at all.  It was and still is one of the most hated pieces of legislation to come down the pike in many, many years.  Against all odds it became law with 219 votes in the house for it and 212 votes against it; a seven vote win is hardly an overwhelming show of support.  The senate vote wasn't much better, coming in at 56 to 44 without even one vote from the opposition (read that as Republican) party.

Having barely passed the congressional hurdle, the next test came from the Supreme Court where it was upheld by one vote.  It ended up in front of the Supreme Court due to 26 states filing lawsuits against it. 

Chief Justice John Roberts cast the deciding vote which had the result of siding in favor of the President on all points including the controversial individual mandate.  This was the provision that mandates every American must obtain health insurance or pay a fine.   Roberts justified his vote under the guise that the fine wasn't really a fine, it was a tax and allowed under the government's power to levy taxes. 

It wasn't so lucky where the states were concerned.  The Court ruled by a 7 to 2 vote that the government could not compel individual states to expand Medicaid coverage against their will and if a state decided not to participate, it could not be penalized by losing its Federal matching funds that pay for over half of Medicare's cost in each state.  

This could still prove to be very problematic to the Administration if numerous states opt out of the Medicaid expansion.

Why Obamacare?

Obamacare was created to try to solve four main problems. 

The first is to give all Americans access to healthcare.  This is where the individual mandate enters the picture; either buy insurance or pay a fine.  That's what John Roberts called a "tax" much to chagrin of Obama who had promised no new taxes to finance the Act. 

Well what if someone can't afford to buy health insurance?  Then they get it through Medicaid with financial assistance or subsidized through the health exchanges that the Federal government will eventually setup in each state.

The next big problem was to bring down out of control healthcare costs.  Obviously this is a vital goal but as we will discuss shortly, just is not going to happen.  All indications are that costs will skyrocket under Obamacare; well it is a government run program after all; has there ever been a government program that got cheaper with time.

The third objective was to remove so-called inequities from the current healthcare system such as refusing insurance coverage for pre-existing health conditions, eliminating lifetime or annual caps on payouts or charging higher premiums based on age or having a chronic condition.  These efforts tend to transform health insurance providers into charities rather than for-profit insurance companies.

The fourth issue of Obamacare was to cover a host of issues with very different problems and goals.   A couple of these are the need for prevention and wellness programs and providing more help for those needing special assistance or long term care.  One other was to figure out how to deliver healthcare more efficiently while reducing costs.  So far, prevention seems to be focused more on early detection and more vaccinations instead of enhanced nutrition through supplementation, stress management and other lifestyle adjustments. 

How will I Fare Under the Act?

As described in Nick Tate's book, Obamacare Survival Guide, how you make out under the Act depends on a number of things including your age, profession, economic position, state of health and a few others. 

Everyone has surely seen this book advertised on TV by now and it is a must read to get a quick, very excellent, overview of the new  healthcare system. You can click on the click on the books image to the right to buy it from Amazon.com. 

In general, the people with the lowest incomes and currently uninsured or uninsurable make out the best.  Medicaid will be significantly expanded and anyone falling under the 133 percent of the federal poverty threshold is in.  If you happen to live in one of the states that have stated they will not participate in the expanded Medicaid program, the federal government will step in and provide subsidies so you can get your insurance through one of the new state exchanges.

There are quite a few groups drawing short straws under the new healthcare scenario.   These are the ones that will be called on to fund Obamacare and they include senior citizens who will see their Medicare benefits cut by somewhere between $455 billion and $716 billion over the next 10 years.  It will become harder and harder to find a doctor willing to accept Medicare patients.  If you are senior citizen and enjoying benefits of the Medicare Advantage program, forget it.  This program will likely go away due to cuts in benefits and increased costs for the remaining coverage.

Taxpayers and rich people, defined as couples earning $250,000 per year, will get hit with a smorgasbord of new taxes and increased taxes to pay the tab.  At the other end of the spectrum, the unemployed will find it even harder to find a job because businesses are hit with much higher taxes (or penalties) for each employee due to the many mandates that Obamacare imposes on them.

Doctors, other healthcare workers and patients also have drawn a short straw.  Doctors have already seen their Medicare payments cut by 2% and the administrative load imposed on doctors to support the insatiable need for data inputs required by the government is horrendous. 

Surprise, surprise...it looks like drug companies and insurance companies will make out like bandits.  Drug companies will enjoy a massive increase in the market for the pills and vaccines they pump out and, in spite of the new rules on insurance companies; they will enjoy a huge influx of about 30 million more paying customers.  The real kicker is that insurance companies are free to pass their cost increases from Obama's mandates to their policy holders.

If you hate Obamacare and happen to be in a union, live in Nevada or are a member of Congress, be of good cheer since you are most likely exempt from the Act.

Had enough yet?  OK, moving on.

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When Does All This Take Place?

It all started in March, 1010 when President Obama put pen to paper and signed the Act into law.  After that, changes started coming fast.

Just four months later in July, high-risk pools were set up by the government to cover adults with pre-existing conditions.  In 2014 insurance company plans will have to take over the "pre-existing" burden.

September 2010 saw the mandates that children under 18 can no longer be rejected by insurers for pre-existing conditions, kids up to age 26 can be covered under their parents plans, lifetime caps and annual limits and rescissions for other than fraud are no longer allowed.  Small businesses with fewer than 25 employees now get a 35 percent tax credit.

Jumping to January 2011, we see the Medicare donut hole for prescription drug plans disappearing and Health Savings Accounts (HSA) and Flexible Spending Accounts (FSA) cannot be tapped to pay for over-the-counter drugs.

Almost a year later in October 2012, Obamacare's long-term, assisted-living program, known as CLASS (Community Living Assistance Supports) was suspended indefinitely by the White House. 

Starting January 1st of 2013, the tax deduction for medical expenses rose from 7.5 to 10 percent of adjusted gross income (AGI).  Not all that many people were able to use this deduction anyway unless they were extremely sick and had huge medical bills.

Beginning in January 2014, the fun really begins.   First off, Medicaid expands to an income level of 133 percent of the federal poverty line.  Several states, including Texas and Florida, have already said they won't play that game especially since the Supreme Court has ruled that the feds can't punish them if they don't play.

2014 is also the year that the health exchanges open their doors in each state unless the state refuses to do so.  If Florida or Alaska don't set up an insurance exchange, then the feds will set one up for them and run it.  

The individual mandate tax kicks in wherein anyone who does not purchase or otherwise obtain health insurance gets to pay a penalty of $285 per year.  The penalty rises to $975 in 2015 and $2,085 in 2016.  Forget that the Supreme Court justified it under the taxation authority of the government.  No matter what you call it, it is still a punitive penalty...you are being punished by your government for not buying insurance.

Also in 2015, no adult over can be rejected for pre-existing conditions, adults under age 30 will be allowed to buy catastrophic coverage through the state exchanges and insurance plans must include coverage for essential health benefits, however that will be defined.

In 2017 state health exchanges will be open to large businesses with over 100 employees.

In 2018 the Independent Payment Advisory Board goes into action and a new tax on so-called "Cadillac" plans kick in.  A Cadillac plan is one that exceeds specified thresholds for coverage and the tax is 40 percent of the plan value above the threshold.

The Independent Payment Advisory Board (IPAB)

In the previous paragraph, the IPAB was first mentioned.  This promises to be a very, very powerful board with almost dictatorial power.  It was dreamed up because most politicians are scared to death to pass unpopular legislation that just might clean up the healthcare system.  

The purpose of IPAB is to lower healthcare costs in Medicare by making binding recommendations.  They are binding unless Congress blocks them with a three-fifths majority, an almost impossible feat.  Thus we have more unelected officials making binding laws that affect every citizen without the slightest bit of representation on behalf of the citizenry.   This board of 15 people chosen from academia, the healthcare industry and so-called think tanks will be commissars in every sense of the word.  So once again, Medicare gets extorted to provide more funding to support the younger, healthier segment of the population so the administration can say that everyone has insurance.  

The bottom line on Obamacare is that will certainly penalize older people when they need healthcare the most while lavishing all kinds of entitlements on the younger sector who won't need much healthcare for decades to come.

Weaknesses of Obamacare

The biggest failure of Obamacare is that it fails to reduce the cost of healthcare.  Creating the huge bureaucracy to run and regulate all aspects of healthcare will drive costs through the roof to the tune of an added $1.08 trillion dollars.  Most of the providers in the industry such as the drug companies, hospitals, medical equipment manufacturers have done very well in keeping the debate focused on "who will pay" rather that the real question of why healthcare costs so much.

President Obama is on record now as holding title to the biggest liar after his famous statement to the effect that "if you like your insurance, you can keep your insurance" and "if you like your doctor, you can keep your doctor".  Well it turns out that as of early 2014 at least 6 million people have lost their insurance.  These were affordable policies and the insured were very happy with but policies that the administration said weren't good enough.  It is estimated that before the dust settles, at least 20 million people will lose their private coverage. 

Another surprise is that many people who were happily employed in full-time jobs suddenly became part-time employees so their employers would not have to pay as much to the government for every full-time employee.  So now they are not only seeing their take home pay drastically lowered but find themselves without employer provided insurance.  How's that for radically transforming America?  

This issue of why healthcare costs so much was thoroughly explored in the March 4, 2013 issue of Time magazine in a special report by Steven Brill titled "Bitter Pill - Why Medical Bills are Killing Us".  The video below is about 3 and half minutes and features author Steven Brill talking about the article he wrote.  When the Time article went to press, we were able to access it on line and read the whole piece however a search for it now does not bring it up to read, at least not free.

Another problem with Obamacare is that it focuses on treatment and merely pays lip service to prevention.  Where it does address prevention, it mostly addresses early detection and is light on nutrition and life style education.  By our way of thinking, prevention means just that...you don't get sick in the first place.  Early detection is good but it still means that you got sick and will need treatment.

One of the greatest things Obamacare could have done would be to make dietary supplements tax deductible and to get the FDA off the backs of supplement manufacturers.   That statement that must appear on all supplement packaging and containers to the effect that the product is "not meant to cure, mitigate, treat or prevent any disease condition" has to be the most blatant attempt to protect the drug industry every created.  It is simply another big lie perpetuated by bigger government.  Proper use of nutritional supplements can and do prevent, mitigate and often cure illnesses.

 
And of course the biggest weakness of the Act is that Medicare bears the brunt of the cost to the detriment of our older population. 

How Do We Protect Ourselves from Obamacare?

Sunburst Superfoods

The most obvious thing we can do to protect ourselves from the Affordable Care Act is to keep pressure on our politicians to kill it and if the current crop won't do it, in 2014 vote in those who will.

In reality, it is unlikely that the Act will die and there is little an individual can do to protect himself but a few items are worth addressing now.

First off is if you are on a Medicare Advantage plan, start looking for alternatives now and not be pressured to do something at the last minute.  These plans are going to continue to cut benefits while raising premiums and other charges such as co-pays and deductibles.

If you are an early retiree still under the age of 65 and have insurance from your former employer, prepare to lose it in 2014 and get ready to explore the state insurance exchanges.

If you are on the low end of the income spectrum, see if you are eligible for Medicaid since this program will be greatly expanded in 2014.  Remember that Medicaid is not the same as Medicare; learn the difference.

Avoid paying the Individual Mandate Penalty, oops, I mean tax.  If you currently have insurance coverage, no problem.  You will not have to pay the penalty. 

If you are in that 16% or so that do not have coverage you will have to get insurance or pay the penalty.  See if you qualify for the expanded Medicaid program or can get coverage through a state exchange with a government subsidy.  If you have to pay something for insurance at least you have coverage; if you pay the penalty, you get nothing for your money.

When they become available take advantage of the approved preventive tests.  You may be able to get them without a co-pay or possibly even free.

If this is of interest, get familiar with the Electronic Preventive Services Selector.  Their website is comprehensive and geared to professionals and consumers as well.  It is also adaptable to most mobile media.  It can be tedious and has lots of links but could save you some money.

For employees and employers there are a couple of special things to watch for.   If an employee, see if your company offers a personal wellness reward program.  If you meet the program standards, well and good.  If you don't, you could get penalized by having to pay higher premiums and co-pays than your peers. 

If you think you can't meet the standards, see if it is possible to opt out of program.  If you are an employer, especially a small business owner, be sure to calculate the health costs of each new hire.  A valuable tax credit is available to small businesses with fewer than 25 employees and even better if under 10.  The message here is to evaluate expanding your employee base very carefully.

Finally, the best thing to do is stay informed and stay healthy.  Start consuming superfoods, botanicals, breakthrough supplements and making smart lifestyle changes.  Obamacare could change dramatically over the coming months and years but is not likely to go away. 

After all, Obamacare is still the most unpopular piece of legislation ever passed and much of it is still a work in process.

Stay tuned.

 



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