The Triumph of Obamacare

In the last few days, medical insurer United Healthcare and its subsidiary Oxford Healthcare have been notifying subscribers in certain areas of the proposed rate hikes for the next year. For my policy, the increase proposed was 13.2% which is about 11% higher than the rate of inflation. A friend of mine who has a single policy got an increase in excess of 20%. I have spoken to many doctors about the rates that they charge. Most of them tell me that they are under constant assault to lower the amounts, not that they have been able to raise them. There has been no dramatic rise in prescription drug costs from year to year. I cannot tell you whether or not hospitals have been able to raise rates, but nearly all hospitals get paid either under rates set by medicare, medicaid or by agreement with the various insurers. Indeed, the only major difference this coming year from last year is that many of the provisions of Obamacare are now in full effect so that the resulting costs are being incurred by the insurers.

In short, all of this means that Obamacare has had a very negative effect on the cost of medical insurance. Spread increases like these across the economy and the impact is terrible. Just imagine the effect that a 20% increase has on someone employing 1000 people and providing them with health insurance. Even if the employer shares the increased cost with its employees, that means that the disposable incomes of those employees is taking a major hit at a time when few of them can afford it.

In prior years, one could deal with large increases in health insurance by stepping down in coverage or changing the co-pay or the deductible. With the advent of Obamacare, most of those opportunities are disappearing. Policies that used to be available are to be eliminated. So the old escape mechanism is also destroyed by Obamacare.

For those of you who think that the policies I am referencing are individual ones or aberrations, think again. Both policies are issued to very large groups. Mine is one of a group with about 30,000 members. This is the fate that awaits nearly everyone in the country who buys health insurance.

So Obamacare has truly triumphed. The goal was to have everyone or essentially everyone end up with equal insurance. That seems likely now to have worked. In another year or two, no one will be able to afford health insurance. We will all be uninsured.

Obamacare needs to be repealed. Then the government has to remove all of the requirements that drive up the cost of care. It is something that could be done by an administration that was truly engaged with the problem rather than one that just relied on ideology for its answers. Let's hope we get one of those soon.