Dec 30, 2013

Obamacare: Is It Only 10%?

Obamacare was primarily designed to help those who were uninsured due to economics and those with pre-existing conditions. That universe was estimated to be about 30 million Americans, yet no one sold the ACA based on the fact that it was designed to help only approximately 10% of Americans. The law explains that you cannot have your old policies that do not meet new government standards, that you must pay more and get more coverage whether you want that coverage or not. The reason for requiring the other coverage and paying more for the coverage is to shift a benefit to other parts of the population and shift the cost. The business mandate was delayed until 2015 because our independent business clients and their employees represent a bigger part of the effected universe of the tax and redistribution of the wealth or benefit of broader coverage. If the electorate is unhappy today, just wait until 2015 when the effects hit our clientele, 27 million small and independent business owners and their employees. Business owners are beginning to position themselves for 2015 now. They are trying to stay under 50 employees. They are splitting up their companies into multiple companies and doing what they can do to avoid the true tax effects of the ACA. We believe most independent business owners will remove themselves from providing benefits and will more likely pay the fines or taxes associated with not providing benefits, which are affordable and small in the near term. This will push the burden down to the working class, who will clearly pay more for the same healthcare that they had previously purchased. The proponents of the ACA are basically saying that preexisting policies that do not meet new qualifications set by the Federal government are substandard or junk policies. In a free market, people have the right to choose and not have the government set standards for which they need to adhere to. When the law talks about penalties throughout and is fought for throughout all courts in the United States, the Supreme Court finally decides its attacks. It is time to tell Americans and independent business owners that the ACA is a tax. The Federal Government just levied a big tax on the American population disguised as something else. You could never have passed this legislation through Congress or the electorate by calling it a tax and redistribution of wealth or a benefit accruing to some and being taken away from others. The primary beneficiaries of the ACA are the 30 million uninsured and people with preexisting conditions. They are the winners. Currently policy holders, small business owners and working employees with existing policies are most likely the losers. Some of this effect is happening today, however the big effect will occur next year after the mid-term elections. It is time to state the facts.10% of the population isn’t small when you are trying to help 30 million with a direct subsidy and benefit that they never received before. Even defenders of the ACA are now beginning to call it like it is. No one is using the bad T word (Tax). No one is using wealth redistribution. However, Medicaid rolls will swell with new applications. We are seeing it now as the current signups are predominantly going to Medicaid. Costs to purchase insurance will increase. Total TOT +1.66% cost of money being spent on healthcare in the near term we believe will go down. (This is an unintended good consequence of the ACA). Current users will be more judicious and use less healthcare to support the growing cost of new Medicaid users. The bigger effects will occur in the future as our economy, employees, and the healthcare industry transforms itself over the next decade to adapt to the new norm.