You may have noticed, now that the federal government is lurching forward with Obamacare, that a great many numbers are coming out which show just what for a nightmare this program will become. See what you make of this.● First, I told you a couple weeks back that it turns out that Obamacare lets insurers blast old people with three times (300%) the premiums of young people. It also lets insurers add a 50% surcharge on smokers. Thus, a 60-year-old smoker who earns $35,000 a year could well be hit with premiums in the range of $8,411, with we taxpayers paying another $7,000 to the insurer as a subsidy.
● Then came this little tidbit. A couple weeks ago, the IRS put out guidance which estimated that the cheapest Obamacare plan you will need to buy. . . the stripped down Ford Escort of plans without any bells and whistles will cost a family of four at least $20,000 a year. Hope Taco Bell gives you a raise.
● Now there’s news about the uninsurables which should trouble people. One of the biggest promises used to sell Obamacare was that the law would make it illegal for insurers to turn away people with pre-existing conditions. That provision goes into effect next year. In the meantime, a stop-gap measure was passed. It is this stop-gap that has proven interesting.
To help the uninsurables until they are declared insurable, Congress set up a program whereby anyone with a pre-existing condition which prevents coverage, and who has been uninsured for at least six months, could get Uncle Sam to pick up their bills. A total of 135,000 people got into this program.... before they closed it to the public. That’s right. The program is now closed because Team Obama has determined that they can’t afford to let any more people in. This is because they’ve blown through half of the $5 billion they were given to run the program and they need the rest to get through the rest of this year.
So let’s think about this. 135,000 people cost $2.5 billion to cover for one year. That works out to about $18,500 per person. This turned out to be much more expensive than expected when the program was created. . . as you would expect. What does this tell us about the future? Well, let’s start with how many of these people there are in the general population. According to The Washington Post, there are between 9 million and 25 million such people. In technical parlance, this wide of a spread is called “pulledthenumberfromyourasstimating,” but let’s go with it. Using this number, we see that the Democratic plan to help these people ultimately was available to only 0.5% to 1.5% of the people who needed it before it ran out of money. That sounds like a Democratic plan, doesn’t it?
Moreover, if we project these costs forward, then covering the cost of these 9 / 25 million uninsurables lurking among us like tax-lepers or human tax-sink-holes will cost taxpayers somewhere between $167 billion to $463 billion per year. To put this into perspective, all of Medicare spends only $482 billion a year.
Now ask yourself why Obama didn’t fight to get more funding? Why was he happy to take the $5 billion and then look the other way as the program died? The answer is simple. With the $5 billion, he was able to claim that he did something to help these people... even if it only helped 0.5% of them. But covering them all would be a PR nightmare. Indeed, these people cost too much for the Federal government to pay for them. So Obama’s plan is to “hide” them within private insurance carriers.
Think of it this way. If Obama taxed you $400 billion to cover these people, you would freak out. You might even revolt. But if he instead forces private insurance to cover these people, then insurance rates raise by $400 billion and he can point his finger at evil insurance “price gougers” without anyone ever realizing that he’s basically using the insurers to impose a tax he didn’t want the federal government to carry on its books.
Now consider this. In 2010, about $2 trillion was spent on healthcare in the US. Extrapolating these people, if there are 25 million of them, then this 8% of the population accounts for 25% of the total healthcare spending in the US. It strikes me that the answer to this issue is not to jam these people into the system and let everyone else pay for them... as Obama is doing. No, the answer is to find a better (read: cheaper) way to get these people cared for.
If ever there was a moment where government should involve itself in the healthcare industry directly, it should be to make sure that these people are taken care of without breaking the rest of the system. Yet, here is the government essentially punting on these people and just forcing private industry to pick up the tab. This really highlights just how bad Obama and the Democrats are at problem-solving. Wouldn’t it be better to set up an alternative system, perhaps through medical schools, to treat these people? Or to set up special clinics for these people that reduce the costs of long-term care? Perhaps using a little purchasing power to get the ultra-high cost drugs they need at cost or cheaper? The least effective means to cover these people seems to be just dumping them into private insurers and saying, “you cover them or else.”
What this tells me is that the Democrats suck at problem solving. Even when it comes to using the power of government, they have no idea what they are doing. They are a bull in a china shop. Let’s face it, Democrats suck.
Thoughts?
47 comments:
I think what Obama believes in is full national healthcare. Government runs and provides these things with tax payer funds. Cost is not his concern. He is a political animal, of course. As this all falls apart, his answer will be to take it to the next level, the full monte, so to speak. The cost projections were all lies to jam it through. A better plan would have been commentarama care, but, alas, things didn't go our way.
Jed, I don't disagree with that, but I think he's in for a shock if that's his plan. I suspect the thinking is that once people get into the program, they will accept it, so when it goes broke they will happily pay more to keep it. BUT the program is just too big to do that. To pay for it now (before everyone starts using it because it's free) would probably require another 25% income tax on top of what we already have. That will never fly. So I think what will happen is that the system will become an under-funded, overpriced nightmare that will be destroyed bit by bit to save the rest of the budget.
Andrew - but what will happen then? People will still be struggling with the cost of health care. Who will propose the better solution. And what do you think will be the timing?
Jed, It's going to be a mess. Sadly, I doubt the Republicans will have a plan other than "get people to buy insurance."
But my point is that if Obama's plan is to push further when the system fails, he's in for a surprise because it won't be possible. He's going to say, "well, let's do single payer" and someone's going to point out that will require $3 trillion a year on top of the current budget of $3 trillion, and that will be the end.
It's financially impossible, not financially irresponsible. There's a huge difference.
well, maybe it will end up with a real and better discussion leading to some better solutions. As we have discussed, though, Americans like their benefits and entitlements, but don't like to raise taxes on everybody (everybody that actually pays taxes. I could see the government, with the help of it's enablers in the media, lying about how the national takeover would cause the "projections to change." After all, a majority of voters didn't seem too concerned about out of control deficits. The crisis of funds requires bold steps, blah, blah, blah. We can make it work because we will drive down the costs, and if we can get the tax on the corporate jet owners up to 90% where it belongs .... Hope I'm wrong, but too tired and need to turn in so will pick up a hopefully lively discussion tomorrow :)
Jed, I'm sure the Democrats and the media would be happy to try that, but I honestly think this monster is too big for the government to swallow.
Moreover, the public likes their benefits, except that the public won't be getting a benefit here:
(1) A small number of people will get "free" care and most them are already on Medicaid.
(2) the benefits people get won't be paid to them, they will be paid as direct subsidies to insurance companies, meaning people won't feel like they are getting a benefit because they still need to pay market rates for insurance.
(3) Most people will only see their insurance rates go up and their doctors dropping out of the system.
None of that will build a clientele for these benefits. At the same time, the tax hike needed won't be a couple percent that people would overlook, it will be a doubling or more of the current tax rates.
I honestly don't think they can pull this off. And even if they could, they went about this the absolutely worst way possible. I think the most likely result will be that Obamacare will be ripped back out in chunks which will make an even bigger mess and it won't be replaced by anything really except anger and a return to the status quo.
I might add that the Dems are running lots of ads to convince people just how great Obamacare is.
I think the quickest road to the reform of Obamacare would be to mandate that everybody has to use it. Politicians, billionaires, unions. Everybody.
K, I think the fact they are running ads is pretty solid evidence of desperation. If the public was buying into this, they wouldn't be bothering. Moreover, none of the Democrats will claim the thing or even talk about it.
In terms of forcing everyone, the thing is that everyone will be forced into it. But it's not a system like people think. It's a reshaping of the medical system and a requirement that you buy insurance or be fined. That's all it is. It's not like a government plan that you need to go through.
I don't think that's all it is. For one thing, it will define what should be covered and what shouldn't - the "death panel" aspect to it.
And according to what I've read, Obama has given quite a few unions exemptions from it so they could continue with their own systems. Finally, if you have enough money or enough pull, you can get around the limits.
Great article. The failure of Obamacare is inevitable. Its like communism, a system which can appeal if one doesn't think too hard about it, but which utterly fails in practice.
Many of the uninsured with medical problems have been storing up problems for years. Them joining the ranks of the insured and seeking to address all their medical maladies would initially going to be very, very expensive which is why I don't think it will ever happen.
I'm not unsympathetic (without going into the gory details, I'm uninsured and will probably never again be insured unless I win the lotto) but that is the unlovely truth.
Its not a big deal for the likes of me (my medical condition is little more than an irritant and I'm perfectly happy to stay far away from doctors) but its a very ugly truth for people with serious problems that can't stay away from the very expensive medical system.
Obamacare isn't fixing a problem, its just screwing up a system that works reasonably well for most people.
Andrew.....There is a lot of money sitting out there in private hands....money that could be used for healthcare. The gov't will "guarantee" that you will get a "better return than you have been" in those risky 401k's and IRA plans. So we will have another "lockbox" scenario where the gov't will pay you out of non-existent money once they use all the private trillions up.
This is what really gets me....we're almost to the point where the majority in this country 1. Do not pay federal income tax, 2. Do not have any savings in 401k's and IRA's, 3. Do not care how much taxes are raised or borrowed because the amounts are just too great and don't affect them. Keep these people voting to confiscate the wealth out there and WINNING!
We are playing with Monopoly money now anyway. Fiscally, this country is ruined, so why not keep forcing those that have to keep forking over more to those with healthcare needs like pre-existing conditions?
You can just imagine the ads now....cute old white grandmotherly type in hospital bed saying she just wants a few more months to live to see her grandchildren graduate. But I can't afford that procedure which will give me the time to do that before I die. Please, please help me! Blah, blah, blah, blah..... (Gawd I hate the blatant manipulation of our emotions in order to get us to support something!)
My concern is that it is too easy for Obama Administration to blame this on the insurance company raising their rates. They will claim we need to have price controls in place. This will drive out the private market because, as you have shown, the premiums charged will not cover the costs. Riding to the rescue is Big Govt. who will limit the prices charged, and stick future taxpayers with the bill the way they have for everything else.
In your old original article about out of control health care costs, you referenced a study showing 1% accounting for 27% of total costs. While that is a bit higher than your extrapolation here, the point is pretty much the same. The "uninsurable" (cancer patients, elderly, etc.) are at minimum 75%.
So far, Obama did not put in premium controls on private carriers. That is the political option he will use, I think. I happen to believe a better system is to utilize the private free market to compete for the 90-99% as the most effective way to minimize costs to patients. While not a fan of employer provided plans per se, I will grant group programs help give individuals greater purchasing power.
The remainder, (say $1.75 trillion for uninsurables) needs a different system focused on reducing the actual costs:(lower overhead, reduction in unnecessary procedures (quality control), high cost of prescription pharmaceuticals Many good ideas were outline in your companion article
Just goes to show, arithmetic is not something you can outvote or give an executive order to.
Currently, I have some basic insurance through my university. When that runs out, I doubt I'll get any for a while. It's cheaper just to pay the fine, and I don't have any health problems anyway. (knocks on wood)
First of all, let me go on records as being SHOCKED! Yes, shocked that it appears the numbers never added up. I have no idea how this could have happened. Obama and Nancy and Harry et al. were all so sure and ocnfident. So confident that they didn't see the need to even READ the bill or look at the numbers. How could it be going so wrong even before it is in full effect?? /sarc off
I am busy at the moment, but I will form a real comment later...
K, People view Obamacare as a "program" like Medicare, but it's not. It's a ton of regulations of healthcare providers and insurers mixed with a requirement that everyone get insurance either from the private market or from the private market through an exchange or through Medicare/Medicaid. There is no program to force people onto.
That doesn't mean it's not destructive and insidious -- it absolutely is. They are trying to force healthy people to buy insurance to subsidize insurance carriers as they force insurance carriers to take on everyone who comes through their doors and provide certain required coverages. It is also a bill which seeks to rewrite the medical profession to favor insurers and large hospitals.
But there's no "program" to force people onto. The only program as far as the public is concerned is that they need to buy insurance from someone. So how good of a policy you buy is up to you after you pay for the minimum plan.
Anthony, Thanks. I think you are right. This is a system which just can't work because the numbers don't work and the incentives are wrong -- just like with communism.
Obamacare basically is trying to force everyone to buy private insurance, which will then take care of everything "for free." This is socialism using business to do the socialized part and government supposedly paying most of the bills (over 50% in direct subsidies). That won't work. It's just too expensive.
On the uninsurables, I'm very sympathetic, but I'm realistic too and you can't just jam something this expensive into a system which has already shown it cannot pay for it and hope that solves the problem. This is one of those things that will require a creative solution -- which is not something Washington is good at.
Also, let me add that I think the $18k per year amount is a vast understatement because that's not much higher than the average plan cost for old people ($16k per year).
My guess is that this number is low because most of the first year they were still ramping up and adding people to the plan. I would guess a more realistic number is $30k, which means these people are way more expensive than Medicare.
This plan looks mathematically doomed to me.
Patriot, The realistic cost of this program would require taxes to more than double. And the only way to achieve that would be massive across the board tax hikes on everyone -- the rich can't afford this if we took 100%. Even the middle class alone can't pay for this. This is one that will require massive tax hikes beyond the level of Sweden 1970, and that won't happen. Look how much the Democrats struggled to add a 3% income tax.
Right now, they're trying to hide this "tax" by running it through private insurers, but that won't work when people refuse to sign up for private insurance. That will cause premium to spike incredibly for those still on the plan.
I wish we still had an investigative journalist tradition in the news today - this is the PERFECT "govt screwed up" story! BUt nope, we've got TOTUS apologists and toadies instead... so instead of crickets, we hear "ribbits".
Jed, I have no doubt that Obama will try to blame private insurance for the premium hikes and will scream about "price gouging." But it will all be an act. The problem is this...
1. If they try to put in place price controls, insurers will go bankrupt. Then the government will need to take over the insurance business;
2. If that happens, the government will need to find a way to pay $3+trillion a year in additional expenses. Our entire budget right now is $3 trillion. The money just isn't there. And to pay for that, they would need to more than double taxes on everyone. People won't pay for that.
So even if the plan is to kill insurers so the government can take over, it just won't work because it will break the government.
On the 1%/27% figure, that was specific to Medicare, but I suspect the number is right in this instance too. The $18k is an estimate which I think is dramatically understated. This $18k is based on the first year only, which likely means there was no coverage at all for the first 5-6 months as they set up the program and then the costs slowly ramped up for the next 6 months as they added people. I would guess that a more realistic cost would be $30k per person, which means that these people most likely account for something like 40%+ of healthcare dollars.
P.S. Jed, Let me add that I'm not in favor of saying "these people just cost too much... screw them." What I am in favor of is finding better, cheaper ways to help these people without destroying the rest of the system in the process.
T-Rav, Just goes to show, arithmetic is not something you can outvote or give an executive order to.
This is exactly the point. Obama is trying to escape the math by hiding these people within the private insurance market, but it won't work. The numbers just don't work.
I think a great many more people than they realize will go without insurance and most won't pay the fines. That adds to the chance of collapse.
Bev, Shocked, huh?! LOL! As unbelievable as it sounds, I'm sure a great many people will be shocked by this. Wishful thinking seems to be the order of the day on the left.
You know, if might have helped them if they actually read the bill... just saying. Actually, probably not. I doubt they would have understood it.
rlaWTX, LOL! Well put... ribbits all across the nation's newsrooms.
Yeah, I agree. I wish that we did have real journalists left in this country who could actually dig into these things. There is SO much wrong with this law and this is just the tip of the iceberg.
Andrew - just so I am tracking your thinking correctly, where did you arrive at the $3 plus trillion. Does that factor in private funds paid to private insurers in the way of premiums would go away, and become available as "healthcare tax" dollars. The death panels will continue to have power to set pricing on almost anything. A lot of local m.d.'s will become little more than salaried employees. We would start to look more like Britain, and all that it entails. Government might be able to short term "tamp down" affordability, but would it not end up having an incredible impact on availability and quality? Of course we would look great to the WHO whose rankings are two thirds based on degree of a government's subsidy of the system.
Jed, The three trillion figure would be a rough guess of what the nation spends on healthcare each year in the next 5-10 years. If the government is going to become the "single payer," then it would basically need to become the pass-through for that spending. BUT, the government being a pass-through won't work because people will expect "free" once the government takes over -- as with Medicare, they would stomach a co-pay, but they won't pay private-market premiums to the government. That means the system can't be self-sustained like the private market it. Instead, the government would need to pay the $3 trillion essentially from tax revenues.
You are right that ultimately, the only way to make socialized medicine affordable would be to ration it heavily by refusing treatment, slashing quality and basically enslaving doctors. But again, I don't think that can happen here. There are too many alternatives and doctors will simply drop out of the system and it will collapse as people find they are paying massive amounts for no treatment whatsoever.
It may even be a lot higher. I seem to recall reading that my generation of baby boomers would increase people on social security from 48 million to about 80 million, which has to have a huge impact on all projections.
Jed, That's true -- and those numbers are accurate. That's going to be a real problem because it means fewer people working to pay taxes, more old people who absorb most health care costs, and the boomers haven't exactly been shy about demanding that the government take care of them. So even if you wanted to socialize medicine, this was probably the worst time to try it.
(I think cricket silence would do less damage...
there's an article on Power Line about "choosing the news", full of examples of ribbitting...)
rlaWTX, No doubt. We would be much better off if the media wasn't a sycophantic fellow-traveler of the Democratic party.
What makes any of us (the sane people) think that Obama and the Leftists (sounds like a 'Third Wave band') won't continue their successful, so far, attack and demonization of anyone with any sort of financial success in this country? It's worked wonderfully so far, so why switch horses in the middle of a stream (there's an old cliche' for you!).
Listen to the buffoon just today about the sequester...."And I know that Republicans have proposed some ideas, too. I have to say, though, that so far at least the ideas that the Republicans have proposed ask nothing of the wealthiest Americans or biggest corporations, so the burden is all on first responders or seniors or middle-class families. They double down, in fact, on the harsh, harmful cuts that I’ve outlined. They slash Medicare and investments that create good, middle-class jobs. And so far at least what they’ve expressed is a preference where they’d rather have these cuts go into effect than close a single tax loophole for the wealthiest Americans. Not one."
This type of bullshit drives me insane, yet it works with his sycophants in the media and low info voters.
So, why do any of us think he won't use the same tactics to demonize the usual suspects to pay for his Obamacare debacle?!
Speaking of sycophantic Dem fellow-travellers of the MSM:
Link
Bev, Is this them whining about Obama not giving them good enough treatment?
Patriot, Low info voters? Rush listeners? :P
Next thing you know, they'll be whining that Obama didn't look happy enough when they were servicing him. (Too much?)
Too much? Uh, no... not really. Sound about right. They already talk about thrills up their legs.
Andrew - I think Obama has led them all to believe that it's not him, it's them. They just aren't asking the right questions. You know, the questions HE wants them to ask and not ones that might require actual answers that people might not like. And may end up not believing he's the one...
Bev, Call me crazy, but I don't think Obama convinced them of anything, I think THEY convinced themselves... despite the evidence to the contrary.
The relationship between the media and Obama reminds me of children who refuse to believe that their father is a serial killer or child molester even after seeing the evidence themselves.
Andrew, #ø£¥ Гµ¢Đ–!
Uh... my universal translator is on the fritz.
But, Tryanmax, I think we all get the gist even without a universal translator...:-)
Andrew - True. Willful blindness is really the problem. And they don't want to admit they are being played.
Andrew, that's my way of saying I agree with your latest sentiments about the media, even if I found the rhetoric astonishing.
Interestingly, by using a string of unusual characters, Google momentarily locked me out of my own account. LOL!
tryanmax, LOL! Apparently, I was reading too much into it. :)
Bev, I agree, they don't want to admit it. I do wonder though if at some level, they don't feel like they created him and like he owes them for that?
That's strange. I guess Google does not approve?
I've heard news this morning which confirms that ObamaCare allows for employers to charge obese workers up to 30% higher rates than non-obese workers.
tryanmax, That wouldn't surprise me. I suspect there's going to be a lot of things like that happening.
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