Obama Quietly Dissolves Obamacare

Recently, President Obama quietly withdrew the most important element of the Affordable Health Care Act, "The Mandate." The Mandate that everyone must purchase insurance or face a tax penalty has been postponed for two years.

The original goal of the Affordable Care Act was to encourage the millions of Americans without insurance to sign up for coverage. Americans were told they would save an average of $2,500 per year in premium.  This may be true for people with significant pre-existing conditions, and those on Medicaid or tax-payer subsidies, but that's a minority percentage of the population. Why don't the millions of people that are being offered free (taxpayer subsidized) insurance sign up for insurance? Because, the free insurance plans stick them with deductibles they can't afford. So, what's the point?

Prior to the law, those who didn't have insurance either couldn't afford it or choose to go unprotected (The ER was their best option).  Not much has changed.

Effects of the Law:

• there are millions more uninsured than there was prior to the law
• the costs of insurance is dramatically higher for many healthy people
• many unhealthy people took advantage of the “guarantee issue” (can’t be turned down)
• many older people are paying a reduced premium for their insurance
• most young, healthy people are not opting to buy insurance

Let's focus on the last issue: most young, healthy people are not purchasing coverage. This is the real killer for Obamacare since the idea was to force these young healthy people by law to pay for coverage to support the cost of insuring older and unhealthy people. The Mandate ruling that the IRS could enforce a tax penalty for non-compliers was brought to the Supreme Court and passed saying it was a "tax,"  therefore it was possible to enforce the penalty through the IRS. Two Fridays ago, this Mandate (the IRS will not penalize non-compliers) was pushed back two years for most people if, “your individual insurance plan was cancelled and you believe other Marketplace plans are unaffordable.”

Just another change on top of all the other changes to the law including the change that has delayed millions of people being cancelled from their employer coverage prior to the election. They would have received their cancellation notices this October if the delay was not ordered. The title wave of people being dropped from their group insurance plan was pushed back until after the election.

The Insured and the Doctors

The insured people are losers in this game too.  I went to get a checkup yesterday and wanted to ask my general practitioner about my foot pain and knee surgery, which is scheduled later this month. My doctor informed me he’s no longer able to get paid for his time looking at these issues while I am there for a “normal check-up.” Prior to the law, he could look at my “non-wellness” issues and simply add the medical code to his claim paperwork that he sent to my insurance company, but now he said, I have to schedule another appointment. I wish I was able to receive his opinion as my surgery is in two weeks and I’ll be limping around on vacation this week not knowing what’s wrong with my feet!

My clients and friends, who are doctors, are feeling the pinch from this new law too. Private doctor/patient records have always been under lock and key, secured in the doctor's office. Now they are required to be filed in a cloud, which is accessible to many, including potential hackers. This has added additional business costs - software ($1,000/month) and a full-time IT employee ($30,000 salary) just to manage one doctor's digital records. Where does that money come from? A doctor has no choice, but to comply. This new software and employee will not grow revenue for the practice so the cost of the new regulations forced him to shut down pension plan contributions to employees in order to follow the new regulations.

What’s next?  More cuts to doctor reimbursement fees...

What my crystal ball is telling me:

• As more and more people join Medicare and Medicaid, I wouldn’t be surprised if they have a difficult time finding a doctor that will treat them. It’s not financially worth it to the doctor.
• Obamacare has yet be successful if the administration’s underlying goals was to create a massive entitlement program very possibly with a universal HMO style system on the way, eliminating insurance companies altogether. Our president is on record saying it will take a while to get to his goal of the “single-payer” health care system.
• Medical care will truly be a “Have” vs. Have Not” system where the “have not’s” will wait forever to get an appointment or a procedure (socialized medicine) and get minimal help, while those with significant financial resources will have their own personal concierge doctor arrangement set up.
• 28 changes to the law have already been made. I’m not sure how many additional changes can be made now that the most important delays were announced. List of At Least 27 Significant Changes Already Have Been Made to Obamacare
• Prices will go up across the board and access to care will go down for everyone.

There is plenty left to happen with this law as the administration may continue to make Executive orders to change the law as necessary to keep it alive, but it certainly looks nothing like what was passed in 2010.

Stay Tuned.

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