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A catastrophe that cannot be fixed.

Posted by on Dec. 10, 2013 at 6:03 AM
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Obamacare is a Catastrophe That Cannot Be Fixed   (December 6, 2013)


Obamacare is a catastrophe that cannot be fixed, because it doesn't fix what's broken in American healthcare.

I just finished a detailed comparison of my current grandfathered health insurance plan from Kaiser Permanente (kp.org), a respected non-profit healthcare provider, and Kaiser's Affordable Care Act (Obamacare) options. I reviewed all the information and detailed tables of coverage and then called a Kaiser specialist to clarify a few questions.

First, the context of my analysis: we are self-employed, meaning there is no employer to pay our healthcare insurance. We pay the full market-rate cost of healthcare insurance. We have had a co-pay plan with kp.org for the past 20+ years that we pay in full because there's nobody else to pay it.

What we pay is pretty much what employers pay. In other words, if I went to work for a company that offered full healthcare coverage, that company would pay what we pay.

Kaiser Permanente (kp.org) is a non-profit. That doesn't mean it can lose money on providing healthcare; if it loses millions of dollars a year (and some years it does lose millions of dollars), eventually it goes broke. All non-profit means is that kp.org does not have to charge a premium to generate profits that flow to shareholders. But it must generate enough profit to maintain its hospitals, clinics, etc., build reserves against future losses, and have capital to reinvest in plant, equipment, training, etc.

As an employer in the 1980s, a manager in non-profit organizations in the early 1990s and self-employed for 20+ years, I have detailed knowledge of previous healthcare insurance costs and coverage. As an employer in the 1980s, I paid for standard 80/20 deductible healthcare insurance for my employees. The cost was about $50 per month per employee, who were mostly in their 20s and 30s. In today's money, that equals $108 per month.

In other words, I have 30+ years of knowledgeable experience with the full (real) costs of healthcare insurance and what is covered by that insurance.

Our grandfathered Kaiser Plan costs $1,217 per month. There is no coverage for medications, eyewear or dental. That is $14,604 per year for two 60-year old adults. We pay a $50 co-pay for any office visit and $10 for lab tests. Maximum out-of-pocket costs per person are $3,500, or $7,000 for the two of us.

We pay $500 per day for all hospital stays and related surgery; out-patient surgery has a $250 co-pay.

So if I suffered a heart attack and was hospitalized and required surgery, I would pay a maximum of $3,500 for services that would be billed out at $100,000 or more were Kaiser providing those services to Medicare.

(Yes, I know Medicare wouldn't pay the full charges, but if Medicare is billed $150,000--not uncommon for a few days in the hospital and surgery-- it will pay $80,000+ for a few days in the hospital and related charges. All of this is opaque to the patient, so it's hard to know what's actually billed and paid.)

In other words, this plan offers excellent coverage of major catastrophic expenses and relatively affordable co-pays for all services.

The closest equivalent coverage under Obamacare is Kaiser's Gold Plan. The cost to us is $1,937 per month or $23,244 a year. The Gold Plan covers medications ($50 per prescription for name-brand, $19 for generics) and free preventive-health visits and tests, but otherwise the coverage is inferior: the out-of-pocket limits are $6,350 per person or $12,700 for the two of us. Lab tests are also more expensive, as are X-rays, emergency care co-pays and a host of other typical charges. Specialty doctor's visits have a $50 co-pay.

The Obamacare Gold Plan would cost us $8,640 more per year. This is a 60% increase. It could be argued that the meds coverage is worth more, but since we don't have any meds that cost more than $8 per bottle at Costco (i.e. generics), the coverage is meaningless to us.

The real unsubsidized cost of Obamacare for two healthy adults ($23,244 annually) exceeds the cost of rent or a mortgage for the vast majority of Americans. Please ponder this for a moment: buying healthcare insurance under Obamacare costs as much or more as buying a house.

A close examination of lower-cost Obamacare options (Bronze) reveals that they are simulacra of actual healthcare insurance, facsimiles of coverage rather than meaningful insurance. The coverage requires subscribers to pay 40% of costs after the deductible, which is $9,000 per family. Total maximum out-of-pocket expenses are $12,700 per family. This coverage would cost us $1,150 per month, and considerably less for younger people.

How many families in America have $9,000 in cash to pay the deductibles, plus the $13,800 annual insurance fees? That totals $22,800 per year. If some serious health issue arose, the family would have to come up with $12,700 (out-of-pocket maximum) and $13,800 (annual cost of insurance), or $26,500 annually.

Is healthcare that costs $26,500 per year truly "insurance"? I would say it is very expensive catastrophic insurance in a system with runaway costs.

The entire Obamacare scheme depends on somebody paying stupendous fees for coverage which then subsidizes the costs for lower-income families and individuals. How many households can afford $23,244 a year for Gold coverage plus $12,700 out-of-pocket for a total of $35,944 annually? How many can afford $26,500 for Bronze coverage?

Recall that the median household income in the U.S. is around $50,000.

How many companies can afford to pay almost $2,000 a month for healthcare insurance per employee? Even if employees pay a few hundred dollars a month, the employers are still paying $20,000 a year per (older) employee.

If an employer can hire someone in a country with considerably lower social-welfare/healthcare costs to do the same work as an American costing them $2,000 per month for healthcare insurance, they'd be crazy to keep the worker in America, unless the worker was so young that the Obamacare costs were low or the worker was a contract/free-lance employee who has to pay his own healthcare costs.

Uninformed "progressives" have suggested that "Medicare for all" is the answer. Their ignorance of exactly how Medicare functions is appalling; recall that Medicare is the system in which an estimated 40% of all expenditures are fraudulent, unneccessary or counter-productive, where a few days in the hospital is billed at $120,000 (first-hand knowledge) and a one-hour out-patient operation is billed at $12,000, along with a half-hour wait in a room that's billed at several thousand more dollars for "observation." (Also first-hand knowledge.)

Medicare is the acme of an out-of-control program that invites profiteering, fraud, billing for phantom services, services that add no value to care, and services designed to game the system's guidelines for maximum profit. If an evil genius set out to design a system that provided the least effective care for the highest possible cost while incentivizing the most egregious profiteering and fraud, he would come up with Medicare.

Does Medicare look remotely sustainable to you? Strip out inventory builds and adjustments from imports/exports and the real economy is growing at about 1.5% annually. As noted yesterday in What Does It Take To Be Middle Class?, the real income of the bottom 90% hasn't changed for 40 years, and has declined by 7% since 2000 when adjusted for inflation.

Here is Medicare's twin for under-age-65 care for low-income households, Medicaid:

As I have observed for years, Obamacare and Medicare/Medicaid do not tackle the underlying problems of Sickcare costs in America. If you haven't read these analyses, please have a look:

Why "Healthcare Reform" Is Not Reform, Part I (December 28, 2009)

Why "Healthcare Reform" Is Not Reform, Part II (December 29, 2009)

Type sickcare into the custom search box at the top of the left-hand column of the main blog page and you will find dozens of essays addressing what's broken with American healthcare.

Obamacare is a catastrophe that cannot be fixed, because it doesn't fix what's broken in American healthcare. It is a phony reform that extends everything that makes the U.S. healthcare unsustainable sickcare.

by on Dec. 10, 2013 at 6:03 AM
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Replies (1-10):
pvtjokerus
by Platinum Member on Dec. 10, 2013 at 6:04 AM

"The real unsubsidized cost of Obamacare for two healthy adults ($23,244 annually) exceeds the cost of rent or a mortgage for the vast majority of Americans. Please ponder this for a moment: buying healthcare insurance under Obamacare costs as much or more as buying a house"

malibucj
by Member on Dec. 10, 2013 at 6:16 AM

If I'm not mistaken, Obamacare is based somewhat on your income.  Those pieces of information are left out. 

romalove
by Roma on Dec. 10, 2013 at 6:29 AM
3 moms liked this


Quoting malibucj:

If I'm not mistaken, Obamacare is based somewhat on your income.  Those pieces of information are left out. 

Sort of.

For my family, we would be eligible for a subsidy of about $1200 a month.  The cheapest plan for us would still require us to pay about $250 a month for coverage, or $3,000 a year in premiums.  Then we also would have an individual deductible of $2500 and a family deductible of $5000.  Then we would have copays of $50 per doctor visit and the insurance would pay only 60 percent once deductibles have been met.  This means, for my family, we would be out of pocket about $8K a year before having any insurance benefit, and even when we have the benefit, we'll be paying 40 percent of costs.

Well visits are covered at no charge, but sick visits are not.  Right now if I'm sick I can go to the doctor for $85 without insurance.  With this insurance I likely can't afford to go to the doctor if I'm sick at all.

It's a very very expensive catastrophic coverage.

smalltownmom03
by Member on Dec. 10, 2013 at 6:30 AM
The cost of insurance is outrageous. I havent signed up for insurance and I wont because of the cost. My state didn't expand medicaid and we don't make enough for a substidy. We never spend more that $500 a year on medical care so it doesnt make sense to spend more in a month on insurance than I would spend all year. Even a $50 copay isn't that good. DH's dr doesn't accept insurance and only charges $45 per visit. Mine and the kid's dr only charges around $50 without insurance. My mom uses the same dr that the kids and I do and her appointments always cost her over $100 with a standard 80/20 insurance.
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pvtjokerus
by Platinum Member on Dec. 10, 2013 at 7:00 AM

 I believe you are referring to the bottom level of Obamacare.  Anything worth a crap is going to cost you more.  That is why you are now seeing all of the publicity of the top cancer hospitals left out of the program.  The coverage won't cover it.

Quoting malibucj:

If I'm not mistaken, Obamacare is based somewhat on your income.  Those pieces of information are left out. 

 

pvtjokerus
by Platinum Member on Dec. 10, 2013 at 7:02 AM

 And you can thank the government for the outrageous prices.  Amazing, they are the ones that helped cause the prices and now they are sending the prices through the roof but yet many still praise Obamatax.

Quoting smalltownmom03: The cost of insurance is outrageous. I havent signed up for insurance and I wont because of the cost. My state didn't expand medicaid and we don't make enough for a substidy. We never spend more that $500 a year on medical care so it doesnt make sense to spend more in a month on insurance than I would spend all year. Even a $50 copay isn't that good. DH's dr doesn't accept insurance and only charges $45 per visit. Mine and the kid's dr only charges around $50 without insurance. My mom uses the same dr that the kids and I do and her appointments always cost her over $100 with a standard 80/20 insurance.

 

candlegal
by Judy on Dec. 10, 2013 at 8:08 AM
1 mom liked this

You do realize you aren't going to have a choice, right?  Either insurance or pay a fine.

Quoting smalltownmom03: The cost of insurance is outrageous. I havent signed up for insurance and I wont because of the cost. My state didn't expand medicaid and we don't make enough for a substidy. We never spend more that $500 a year on medical care so it doesnt make sense to spend more in a month on insurance than I would spend all year. Even a $50 copay isn't that good. DH's dr doesn't accept insurance and only charges $45 per visit. Mine and the kid's dr only charges around $50 without insurance. My mom uses the same dr that the kids and I do and her appointments always cost her over $100 with a standard 80/20 insurance.


sweet-a-kins
by Emerald Member on Dec. 10, 2013 at 8:18 AM


Quoting romalove:


Quoting malibucj:

If I'm not mistaken, Obamacare is based somewhat on your income.  Those pieces of information are left out. 

Sort of.

For my family, we would be eligible for a subsidy of about $1200 a month.  The cheapest plan for us would still require us to pay about $250 a month for coverage, or $3,000 a year in premiums.  Then we also would have an individual deductible of $2500 and a family deductible of $5000.  Then we would have copays of $50 per doctor visit and the insurance would pay only 60 percent once deductibles have been met.  This means, for my family, we would be out of pocket about $8K a year before having any insurance benefit, and even when we have the benefit, we'll be paying 40 percent of costs.

Well visits are covered at no charge, but sick visits are not.  Right now if I'm sick I can go to the doctor for $85 without insurance.  With this insurance I likely can't afford to go to the doctor if I'm sick at all.

It's a very very expensive catastrophic coverage.

and that is less than I pay currently

I pay $450 approx a month

Copays vary, but I recently had to take my daughter for a non routine visit and it cost $90.

1 well visit a year for both kids are free

My husband has two chronic conditions and needs to go to the dr's 4 times a year minimum

and takes two prescriptions year round plus an inhaler and preventative inhaler (which isn't covered)

yes, the coverage you are talking about is better and cheaper than ours


romalove
by Roma on Dec. 10, 2013 at 8:21 AM


Quoting sweet-a-kins:


Quoting romalove:


Quoting malibucj:

If I'm not mistaken, Obamacare is based somewhat on your income.  Those pieces of information are left out. 

Sort of.

For my family, we would be eligible for a subsidy of about $1200 a month.  The cheapest plan for us would still require us to pay about $250 a month for coverage, or $3,000 a year in premiums.  Then we also would have an individual deductible of $2500 and a family deductible of $5000.  Then we would have copays of $50 per doctor visit and the insurance would pay only 60 percent once deductibles have been met.  This means, for my family, we would be out of pocket about $8K a year before having any insurance benefit, and even when we have the benefit, we'll be paying 40 percent of costs.

Well visits are covered at no charge, but sick visits are not.  Right now if I'm sick I can go to the doctor for $85 without insurance.  With this insurance I likely can't afford to go to the doctor if I'm sick at all.

It's a very very expensive catastrophic coverage.

and that is less than I pay currently

I pay $450 approx a month

Copays vary, but I recently had to take my daughter for a non routine visit and it cost $90.

1 well visit a year for both kids are free

My husband has two chronic conditions and needs to go to the dr's 4 times a year minimum

and takes two prescriptions year round plus an inhaler and preventative inhaler (which isn't covered)

yes, the coverage you are talking about is better and cheaper than ours


Your plan is nuts too.  I wouldn't take it if offered.

We always had insurance through my husband's work.  I think we paid about $400 a month, divided out of two paychecks, but there was no deductible and the copays were $30 for a doctor visit (well or sick) and $15 for generic prescriptions, $30 for name prescriptions, and $45 for a three month supply of any prescription mail-ordered.

It was really good insurance.  What is being offered now is ridiculous and nonsensical.  I can pay better for my medical needs out of pocket without the insurance than with.

sweet-a-kins
by Emerald Member on Dec. 10, 2013 at 8:23 AM


Quoting romalove:


Quoting sweet-a-kins:


Quoting romalove:


Quoting malibucj:

If I'm not mistaken, Obamacare is based somewhat on your income.  Those pieces of information are left out. 

Sort of.

For my family, we would be eligible for a subsidy of about $1200 a month.  The cheapest plan for us would still require us to pay about $250 a month for coverage, or $3,000 a year in premiums.  Then we also would have an individual deductible of $2500 and a family deductible of $5000.  Then we would have copays of $50 per doctor visit and the insurance would pay only 60 percent once deductibles have been met.  This means, for my family, we would be out of pocket about $8K a year before having any insurance benefit, and even when we have the benefit, we'll be paying 40 percent of costs.

Well visits are covered at no charge, but sick visits are not.  Right now if I'm sick I can go to the doctor for $85 without insurance.  With this insurance I likely can't afford to go to the doctor if I'm sick at all.

It's a very very expensive catastrophic coverage.

and that is less than I pay currently

I pay $450 approx a month

Copays vary, but I recently had to take my daughter for a non routine visit and it cost $90.

1 well visit a year for both kids are free

My husband has two chronic conditions and needs to go to the dr's 4 times a year minimum

and takes two prescriptions year round plus an inhaler and preventative inhaler (which isn't covered)

yes, the coverage you are talking about is better and cheaper than ours


Your plan is nuts too.  I wouldn't take it if offered.

We always had insurance through my husband's work.  I think we paid about $400 a month, divided out of two paychecks, but there was no deductible and the copays were $30 for a doctor visit (well or sick) and $15 for generic prescriptions, $30 for name prescriptions, and $45 for a three month supply of any prescription mail-ordered.

It was really good insurance.  What is being offered now is ridiculous and nonsensical.  I can pay better for my medical needs out of pocket without the insurance than with.

We don't have that choice

My husbands medical needs alone would bankrupt us in three months or less

My daughter's recent diagnosis would ALSO (and may still) bankrupt us

or I could choose to not get them treatment, in which case my husband would probably die of a stroke like his Dad did (his Dad died at age 35).


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