The Supreme Court will shortly issue its decision in King v Burwell. That is the case in which the Court will decide if the Obamacare statute actually means what it clearly says. In states where there is no exchange established by a state under section 1311 of the Obamacare law, can the federal government pay subsidies to low income individuals, does the individual mandate apply and does the employer mandate apply? Those are extraordinary questions with major changes that will result if the Court enforces the law as written.
If the Court rules that subsidies and the mandates apply only in those states that establish their own exchanges (which the law says), what will be the actual impact? We already know that the media will scream and rage at the vast number of people who will "lose" their insurance coverage. But let's consider what the true reality.
First of all, the poorest Americans (who also happen to be most of those who got insurance under Obamacare) will not be affected. The Medicaid program will go on without any change. The Americans who couldn't get insurance coverage because of their serious health problems will also be unaffected. Policies will still require the insurers to use community rating which will make access to healthcare for these folks unchanged. No, the impact will be on those people who have low incomes but not the lowest, i.e., the group that now gets subsidies under Obamacare. Here, the impact won't be that great either.
Let's look at an example. Suppose we consider a 30 year old single worker who makes $30,000 per year. Right now, that person is compelled to buy health insurance, and the subsidies keep the cost of that insurance at $2400 per year. Now consider that this person gets sick. He doesn't feel well and considers whether or not to go to the doctor. That office visit will cost $200, and because his Obamacare policy has a $4000 annual deductible, the full cost will have to be paid by this fellow and not by his insurance. He decides that the $200 is too expensive and does not go to the doctor even though he has insurance. The pain, however, gets worse. After a few days, he gives in and goes to the doctor. The doctor orders a group of tests, and after the results come in prescribes medicine. The total cost is $600, all of which has to be paid by the patient with no part paid by insurance. If the Court rules that there will be no subsidies for this fellow, his insurance costs will rise, but only if he keeps the insurance. He might choose not to do so. At that point, he would save $2400 per year. The illness and the medicines would still cost $600. In other words, he would be much better off without the insurance.
The reality of insurance under Obamacare is that it only helps in the case of catastrophic illness. For those millions who now have insurance but who don't have major illnesses, Obamacare provides no benefits, just costs.
This is actual reality. Don't expect to hear about it once the Court rules, however.
If the Court rules that subsidies and the mandates apply only in those states that establish their own exchanges (which the law says), what will be the actual impact? We already know that the media will scream and rage at the vast number of people who will "lose" their insurance coverage. But let's consider what the true reality.
First of all, the poorest Americans (who also happen to be most of those who got insurance under Obamacare) will not be affected. The Medicaid program will go on without any change. The Americans who couldn't get insurance coverage because of their serious health problems will also be unaffected. Policies will still require the insurers to use community rating which will make access to healthcare for these folks unchanged. No, the impact will be on those people who have low incomes but not the lowest, i.e., the group that now gets subsidies under Obamacare. Here, the impact won't be that great either.
Let's look at an example. Suppose we consider a 30 year old single worker who makes $30,000 per year. Right now, that person is compelled to buy health insurance, and the subsidies keep the cost of that insurance at $2400 per year. Now consider that this person gets sick. He doesn't feel well and considers whether or not to go to the doctor. That office visit will cost $200, and because his Obamacare policy has a $4000 annual deductible, the full cost will have to be paid by this fellow and not by his insurance. He decides that the $200 is too expensive and does not go to the doctor even though he has insurance. The pain, however, gets worse. After a few days, he gives in and goes to the doctor. The doctor orders a group of tests, and after the results come in prescribes medicine. The total cost is $600, all of which has to be paid by the patient with no part paid by insurance. If the Court rules that there will be no subsidies for this fellow, his insurance costs will rise, but only if he keeps the insurance. He might choose not to do so. At that point, he would save $2400 per year. The illness and the medicines would still cost $600. In other words, he would be much better off without the insurance.
The reality of insurance under Obamacare is that it only helps in the case of catastrophic illness. For those millions who now have insurance but who don't have major illnesses, Obamacare provides no benefits, just costs.
This is actual reality. Don't expect to hear about it once the Court rules, however.
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