Robert A. Hayden, DC, PhD, FICC
In case you haven’t noticed, an important election is coming. The economy was a driving issue up until a recent rash of mass murders by Islamic militants, which put national security back on the front burner. Lost somewhere in all of this is the discussion of healthcare either as a standalone issue or a subset of the discussion on the economy.
The Affordable Care Act is now a demonstrable disaster. It has had a huge impact on hospitals, particularly rural hospitals, and particularly those in the south. Medicaid funding reductions and cuts in reimbursement for uninsured people have hit hospitals hard, causing 48 hospital closures by the early part of 2015, with 283 more at risk.
About two thirds of Americans have insurance coverage through their employers. Thus, compliance with the Affordable Care Act falls squarely on the backs of businesses.
An analysis of insurance benefits in California, Florida, Maine, New York, Ohio, Texas, Wisconsin, and our very own state of Georgia is not encouraging. The Congressional Budget Office (CBO) estimates that Obamacare will have driven the cost of individual insurance coverage to $5800 per year by 2016, and double that for families.
Healthcare is having the predictable impact on employment. Employers with fewer than 50 employees are exempt from being forced to provide health insurance, so many employers have chosen to lay off employees to get under that 50 person limit. Those with more than 50 employees have moved people to part-time status or just cut insurance benefits completely, since the $2000 per year per employee fine is far cheaper now than providing insurance. None of this is rocket science. Businesses need to survive. Employees need to businesses to survive, too.
Many employers were told they could keep their benefits under plans that were “grandfathered.” Insurance companies merely change the policies slightly and pronounce them brand-new, negating the whole grandfathering issue. About 80% of employers lost the insurance policies that Obama promised them they could keep in just this way.
Small employers saw an 11% average increase in health insurance premiums, according to Morgan Stanley, last year. With Blue Cross, premiums increased 16% nationally. In Pennsylvania, the increase was 66%, while in Washington, it was 588%.
CBO says that the taxpayers are on the hook for $36 billion for Obamacare this year, and $1.38 trillion over the next decade. According to CBO’s numbers, each new person who gets Obamacare will cost taxpayers $45,461. From where will this money come?
Acquisitions involving CIGNA and Humana by Anthem and Aetna are also fueled by Obamacare. Obama’s goal was stated clearly when he said he wanted a single party payer system when he ran for office the first time. He wanted to do away with the private insurance industry, so consolidation from five major companies to three is consistent with the purpose of Obamacare. It also eliminates a significant amount of competition, driving rates upward.
This week we are hearing that UnitedHealth Group has a plan to drop Obamacare by 2017 because the gigantic bills of the sickest patients, the high risk population that comprises Obamacare, are simply too expensive. As more insurance companies are driven out of the market and do not participate in the health care exchanges, choices will be fewer and more expensive. There will be an endpoint soon beyond which no one will be able to afford anything.
All of this has meaning to us here in Georgia. Elections have consequences, and the last two have meant drastic changes in healthcare in terms of cost, choices, quality, and even availability. Although it eclipsed right now by national security concerns, healthcare will be an issue in the next big election. Think carefully and ask yourself if you believe we are going in the right direction. Is the economy improving? Is employment going up? Do you still have affordable health care? How do you like it now?