Terry Corbell, The Biz Coach
By Terry Corbell
Business Consultant

ObamaCare: High Court Upholds Subsidies…What Now?

June 25, 2015 –

So the U.S. Supreme Court has ruled in King v. Burwell that it’s OK for ObamaCare to allow the federal government to subsidize health-insurance premiums.

The high court’s justification for its decision defies logic for economic, legal and moral reasons.

The so-called Affordable Care Act (ACA) unambiguously states the subsidies can only be given to people based on their income via an “Exchange established by the State.”

stockimages doctorBut only 13 states, including Washington state, have exchanges. Individual Americans are required to enroll in the federal government’s exchange. If they don’t, they face fines as high as $695 in 2016.

ObamaCare architect Jonathan Gruber has said the law’s authors wanted the subsidies to force states to participate in the program.

Good economic sense

When the majority of states, 37, used good economic sense to refrain from establishing exchanges, the Obama Administration circumvented the law by issuing an IRS regulation.

“Virtually all of the state-exchanges are experiencing financial difficulties, including Washington state,” blogs Roger Stark, MD, the health care policy analyst for the Washington Policy Center (WPC), www.washingtonpolicy.org.

Fearing exploding costs, 23 states declined to take part in the resulting Medicaid expansion. In the participating 27 states, a major injustice is occurring. Able-bodied unemployed men are receiving free care.

The uninsured 33 million people have hit a wall – the plans are too expensive even with subsidies and the coverage is too limited.

But even moms and their children, who are eligible for coverage, are being rejected as new patients by doctors. Physicians simply cannot afford the drastically low-government reimbursement rates. They’re already overwhelmed with the required complex paperwork.

Few enrollees

In addition, only about 17 million people, who were among the 50-million uninsured before the law’s passage, are enrolled in the federal and state exchanges. Many enrolled in Medicaid, which puts a bigger burden on taxpayers.

Why so few enrollees?

For seemingly countless individuals, the four ACA-mandated insurance plans are out of their reach. The uninsured 33 million people have hit a wall – the plans are too expensive even with subsidies and the coverage is too limited.

Therefore, many Americans – the working poor, self employed and middle-income folks – have opted out. For them, it’s more financially feasible to pay the federal fine, negotiate health-care provider fees and hospitals, and seek low or no-cost deals from drug companies.

Many others are struggling to pay for health insurance.

The law’s bronze plan, for example, costs a minimum of $500 and inflicting deductibles that cost as much as $13,200 for a family of four – with extremely limited provider networks. The latter means such people can’t reliably choose their doctors or hospitals.

Furthermore, small-insurance companies have been forced out, which means only a handful of companies are participating and it constitutes a monopoly of insurers. It will only get worse as Aetna is acquiring Humana.

The consolidation also means there’s been a similar constriction of hospital and doctor services.

The individual plans are mired in a quagmire. What used to be routinely covered, no longer is. When an insurer denies coverage, the patients have no recourse as the insurers are unresponsive to the complaints.

There’s more mass confusion and waste that could be mentioned. It would require additional voluminous explanations in this article, but you get the idea.

Premium increases

With the dramatic decrease in insurance options, premiums for individuals are forecast to jump as much as 20 percent in 2016.

“Health insurance premiums will continue to rise, ultimately forcing the government to put some type of price controls on the industry,” predicts Dr. Stark. “Health insurance companies will then essentially become public utilities.”

There are other onerous implications.

“Taxes will continue to rise,” adds the WPC analyst. “The federal debt will increase and future generations will have a huge financial burden. Cuts to Medicare to pay for the ACA will get worse and access to health care for our seniors will decrease.”

Had the Supreme Court ruled the subsidies to be illegal, it’s true about 6-million low-income beneficiaries of this ghastly law would have lost their subsidies.

But for millions more, the monopolies – that drive the massive premium increases and less coverage – would have ended. For the uninsured 30-million+ Americans, a free-market system would likely provide affordable premiums and wider choices.

Ironically, a free market – with lower premiums and better choices – would have fulfilled the original intent of the law. ObamaCare is the poster child for heavy-handed government dysfunction.

“The stated goal of many of the proponents of the ACA is some type of government single-payer system,” concludes Dr. Stark. “Hopefully, the American public will reject this and will instead push for a patient-oriented health care system that puts the patient, not the government, in charge.”

Agreed.

From the Coach’s Corner, you can read more insights of the Washington Policy Center here.

“The problem with socialism is that you eventually run out of other peoples’ money.”

-Margaret Thatcher

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Author Terry Corbell has written innumerable online business-enhancement articles, and is a business-performance consultant and profit professional. Click here to see his management services. For a complimentary chat about your business situation or to schedule him as a speaker, consultant or author, please contact Terry.

Photo courtesy of stockimages at www.freedigitalphotos.net

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Seattle business consultant Terry Corbell provides high-performance management services and strategies.