The Failure of the Healthcare Affordability Act

A very close friend posted some news the other day that many Americans are experiencing. She received a letter from her health insurance company stating that her policy was being dropped.

The Healthcare Affordability Act (HAA) or Obamacare has been under fire from its birth. Nancy Pelosi (D-CA) was questioned about it and responded that we have to sign it before we can know what is in it. $500 Million dollars for the enrollement website that, so far, has not been working. The thousands of pages in the bill that was passed. So much confusion and controversy. Should we worry?

The newest news regarding Obamacare is the 2010 report that was released this week projecting millions would be dropped from their current insurance plans. To my understanding, the HAA inhibits (or at least makes it difficult) insurance companies from providing minimal coverage plans, as they will now be offered through the non-functioning, government run, $500 million website. This affects young, healthy, responsible people who are smart enough to get insurance but not sick enough to need major plans. It also forces buyers to purchase higher deductible plans, as the low deductible plans are the ones that the HAA is sweeping up.

The $95 opt out is for people who do not want to purchase the anticipated expensive insurance plans. A fee of $95 per year is much cheaper than paying the $1000 a month for a $3,000-$5,000 deductible. There are very few young, healthy college students who are willing or able to pay that much for insurance they will never use. If this happens the only people actually paying for the insurance are those with health issues that will more than likely cost the insurance company more than the $12,000 a year premium they are charging the patient. The end result is Insurance companies having to increase the monthly premiums to continue to make the same profit.

Let’s go back to those young, healthy 26-35 year olds. Let’s just say they decide to pay the $95 a year instead of being forced to buy a health insurance plan they will never use. If that person develops anything from a cold to cancer they can THEN decide to get Obamacare the next day. The result will then be very few people getting insurance until they foresee the cost being too high. They simply sign up at that point. Then insurance companies will once again be stuck having to foot a yearly health bill that is higher than the amount they generate through premiums. The way insurance companies work is by taking money from large numbers of people and only using that money on few. Think of your auto insurance. How often do you actually file or submit a claim and how often does your insurance company actually pay a large percentage of it? Most minor problems fall below the deductible or do not qualify for coverage. Conversely, how much do you pay per month. Multiply that number by the millions of americans that pay car insurance. Very large amounts of people are paying in to the system while only a few (usually major car accidents) get money out. Insurance companies keep whatever is left over.

Now putting this with health insurance and Obamacare. Many people paying in but ALSO MANY AND PERHAPS MORE TAKING OUT! The number of “insured” individuals is speculated to increase, but it is also thought that more than ever will start to take advantage of their health plans. The thought being, “if I’m going to pay for it, I’m going to use it”. This takes away the “more paying into the system than taking out of the system” model. It is also believed that there are actually more taking out than putting in anyway thanks to entitlement programs like Medicaid. A large percentage of our national spending is on these programs that pulls money from those that are putting into the system and giving to to those that have no contribution. I don’t mean to be selfish here (anyone who knows what I do for a living knows how much I value helping those that need help) but I’m simple presenting the numbers of how this can not work. Insurance companies work by putting more money into the pot than is being taken out. If more people opt out for $95 a year (until they actually need something major and worth the premiums and deductibles) than those that opt in whose treatment costs more than they are paying-the system is doomed for failure.

The standards and expectations for medicine today seem doomed. I am dedicating myself and my practice to improve the quality and care my patients receive. I strongly believe that doctors today can still make a great impression on society by offering their absolute best to their patients. Any further questions regarding healthcare reform can be directed to info@FASthewoodlands.com