Last year, the U.S. government gave generous subsidies to encourage people to sign up for Obamacare. In fact, according to the LA Times, nearly nine out of 10 Americans who bought new healthcare coverage on the federal government’s marketplaces received a subsidy. These subsidies helped new enrollees afford this clearly unaffordable health care. In fact, I now realize that health care insurance in this country is now only “affordable” for these new enrollees. (Those of us who took the president up on his promise and chose to “keep” the insurance we already had and “liked”– now pay a lot more for the same coverage.
But these taxpayer-funded subsidies have serious, long-term repercussions…
You see, any time the government subsidizes anything, the “product’s” cost goes up. But the product’s value doesn’t go up. In other words, we end up paying more for the same, or lesser, product.
The government’s subsidy of student loans for higher education is a perfect example of this scenario. The government told us this program would help students pay for college. But it artificially injected “subsidized” government money into the college system.
And it led to ridiculous increases in college tuition, far exceeding inflation. It also led to increases in colleges’ spending. Colleges bloated their payrolls with ever more administrative bureaucrats (who don’t teach at all). They added more and more professors, who teach just four hours per week on average, to indoctrinate students with new politically correct topics in new nonsensical “academic” departments. And more and more local, low-quality, “affordable” colleges proliferated to hand out more meaningless degrees.
The government helped ruin our higher education system between its subsidies and its insistence on political correctness. And now, we are about to see the same with mainstream healthcare.
You see, health care subsidies also allow insurance companies to charge higher premiums without most of us realizing it. They simply hide the higher costs behind the complexities, inconsistencies, and incompetence of the Obamacare law and its administration. And the bottom line looks cheaper to some Americans who get the subsidies.
Meanwhile, hard-working middle class Americans pick up the tab. They ultimately pay for the subsidies through increased government spending and more taxes. And it’s going to get worse with each passing year. The LA Times estimates the total cost of subsidies could exceed $16.5 billion this year alone. In 2015, it estimates the cost will rise to $23 billion. And in 10 years, it will cost nearly $100 billion more.
Even worse, many middle-class Americans who were forced to purchase new insurance (although they liked and wanted to keep what they already had) don’t qualify for these federal subsidies. So they’re feeling the pinch from all sides.
According to Newsmax, an individual who purchased one of the lowest tier “Bronze” plans has to pay $5,081 on average in deductible costs before their insurance plan even kicks in. That’s a whopping 42 percent higher than the $3,589 average deductible for individual plans in 2013.
And the numbers for families look even worse.
According to the Wall Street Journal, family deductibles may reach as high as $12,700 each year. Plus, a family policy itself costs about that much or more each year. So families could pay a total of about $25,000 a year in healthcare, when you add the policy premium costs and the deductibles together, before they even begin to receive any actual coverage.
Even older Americans on Medicare or working Americans fortunate enough to still have good, employer-sponsored healthcare insurance are not exempt from rising costs. They still have copays. And copays for “covered” services are also increasing under the Affordable Care Act.
Plus, small employers now face impossibly high costs to provide insurance to their employees. If they continue to provide insurance to employees, many employers face bankruptcy. But if they stop covering employees, they face punitive fines. It’s a lose-lose situation.
Many employers are making this mess work by discontinuing any kind of HMO-type plan for their employees. They now offer high-deductible plans combined with Health Savings Accounts (HSAs), which the employee must pay into.
So, in this new era of “affordable” health care, the average, middle-class citizen may be left almost entirely self-insured. That is, they must pay all the actual costs of the healthcare up to a crippling ceiling. Plus, let’s not forget, they must pay–through more taxes–for that $16.5 billion in subsidies that goes to others .
The real result of Obamacare?
It’s another massive giveaway to health insurance companies. And it’s a huge government-mandated subsidy to keep afloat a dangerous, dysfunctional, counter-productive healthcare system. (A healthcare system that now creates more health problems than it solves, in my view. Plus, it ignores the obvious, safe and effective low-cost alternatives.)
American citizens and taxpayers carry this terrible burden on their backs.
As I said recently, past efforts at so-called healthcare reform were simply like rearranging the deck chairs on the Titanic. Except now, with Obamacare, everyone is required to buy a ticket on this sinking ship! As the French would say, it’s “sauve qui peut.” Or, “every man for himself.” How’s that for another collective benefit from big government?
1. “Obamacare subsidies on track to cost billions this year, report says,” LA Times (www.latimes.com) 6/17/2014
2. “High Deductibles Fuel New Worries of Health-Law Sticker Shock,” Wall Street Journal (www.wsj.com) 12/8/2013
3. “High Obamacare Costs Creating New Middle Class of Uninsured,” Newsmax (www.newsmax.com) 12/16/2013