Now I understand why Obamacare is a sham
History
For the vast majority of my life I have had medical coverage it has not been a problem. Either my company paid for it or I got an individual plan that seemed very reasonable. The insurance companies seemed quite logical about what was covered and there didn’t seem to be too much complexity. Almost all doctors took coverage and this just didn’t seem like a problem.
About 10 years ago I was running a company and our group plan cost $1000/month for a really good family plan for 4 people.
Over the last 10 years the cost of a similar group plan for a family of 4 has ballooned to $3500/month. Part of that increased cost was that everyone on the plan was 10 years older but none of us has any illness to speak of. Fortunately since this plan is paid for by the company’s mostly this increase has been somewhat invisible to most employees.
I have wondered how is it possible that rates could have almost quadrupled. The rates on these plans has gone up 50% a year in some years. and over several years the rates have doubled. Most of this increase has happened since Obamacare came into being. This was my understanding of the negatives of Obamacare.
The much higher rates for medical care are a huge problem for employers since an increase of $2000/month is a huge increase in their costs. They could put that burden back on employees but in any case this increased cost could be one of the reasons that few companies are hiring full time employees anymore. Since 2007 US companies have only hired 1.7% new employees.
Today
I learned recently how Obamacare works in the real world today and I was astounded. I decided to try these plans and what I discovered was that none of the doctors I had been seeing for 30 years in some cases would take the Obamacare plans. This is shocking because when you look at the plans on the websites they appear perfectly reasonable. The prices while lower than group plans are not “amazingly” cheaper but I had no idea how many doctors and facilities were not taking these plans. This means the hidden cost of someone going with these plans is travelling 20 or 40 miles to see a doctor or even worse seeing a doctor that has incredibly bad ratings. For my SO she looked for an OBGYN. What she found was a doctor whose reviews showed he commented about their sex life and made all kinds of innapropriate comments that earned the physician a 1 star rating. This was the kind of doctors my SO would have to choose from.
These plans don’t have doctors signing up because they restrict fees. This may sound good in principle but when talking to an expert in this area they pointed out that all the plans listed on Covered Ca website shared the same compensation scheme and thus with very minor variation they all had very limited doctors that would accept the plans. I seemed to have choice of plans with various deductibles, various copays etc but in fact I had NO CHOICE about the level of care or doctors I would get with Obamacare.
One of the big assumptions of Obamacare was that the 40 million Americans would sign up for coverage. Only half or less have. It also assumed that many group plans would switch to Obamacare plans. The massively increasing cost of group plans would seem to force this but companies have been incredibly resistant to moving from their existing group plans even with the 200% or more increases in costs for them to the Obamacare plans. I now understand some of the reason. The plans suck. Who in a good company wants to be forced to go to these limited doctors?
Apparently even with lower costs nobody wants these plans. The idea there is choice is a lie. You get a choice of deductible but not really a choice of coverage. By law now all individuals are forced to go the Obamacare route which is incredible because it means less choice for the consumer.
The whole system is in a state of collapse from what I can see. Individuals are not signing up as anticipated. Groups are not switching. The insurance companies not seeing the people or profits in the plans are offering less and less choice. Rates for the plans are rising rapidly but insurers that went into this business are going out of business. Doctors and Institutions are dropping out of the programs. The whole system appears to be slowly drifting to complete disaster.
More shocking to me is the fact that consumers have less choice and are going to be getting worse care. On the whole costs for medical care soaring means that everyone seems to be winning (insurance companies and providers) but the consumers are paying more and getting less.
A side effect of this is the phenomenal level of lack of education of these facts. Virtually nobody understands the plans being offered, what they cover, who they can see and the complexity and risk has increased massively for people to get good healthcare.
I now see why there has been such an uproad over Obamacare. It is a true disaster.
I outlined a plan I came up with for medical care. You can read about it here.
The socialist option
I believe like Obamacare that we need some reform of medical care but I think we need a massive simplification. Socialists will argue we should go the British route and go to a total federal system. Bernie Sanders suggested putting everyone on Medicare. These options look almost plausible given the sorry state today. I should note that the British Health service is complaining it is virtually bankrupt and can’t offer the quality of care needed. Not a good sign about socialist systems.
I think there is still a free market option.
The democrats have tried to regulate us to happiness. They regulate the fees of the doctors and hospitals. They regulate the prices of the plans in some situations. They do everything to limit the prices but inadvertantly in the process kill the free market. Other restrictions prevent the operation of the free market in healthcare in other ways. All of this is making our system have numerous holes and problems that don’t get filled by the free market because it is regulated. I have many examples of these exceptions that are disturbing.
My plan would force everybody to select from plans. Everybody including all the government plans, the corporate group plans and congressional plans, etc would be aggregated into “plans” available to all. There would be no state boundaries and insurance could negotiate with industry freely. There would be some lower bounds on coverage and I would have some requirements that everyone one way or another has to pay for medical care even if it ends up being through the tax system. There would be no preexisting condition limitation. I would put a high emphasis on HSA type plans as being the preferred plans or HMO type but I wouldn’t outlaw existing PPO or other plans I would find a way to entice people to HSA if possible or HMO because these plans will create the most incentive to competition and cost cutting.
HSA type plans or HDHP basically pay only in the case of disaster. So, most people would pay for their typical medical expenses out of pocket. It would be tax deductible out of pocket but it would be out of pocket.
Some people think insurance companies somehow save you money. They don’t. As everyone who’s used car insurance knows you pay your premium but if you have accidents you will pay for them with higher payments in the future. There is no free lunch. Car insurance is mainly for you to be responsible in case a disaster happens. It really isn’t a way for you to save money on fender benders.
In a similar way having the insurance company involved in every little thing you do for your health is NOT saving anyone any money. They simply add a bureaucratic overhead to every transaction. Many companies eschew the traditional insurance companies and “self-insure” meaning they keep funds to pay for their employees health concerns out of pocket rather than impose the bureaucracy but even they have to use insurance companies because of their connection to the system of payments and classification and other stuff that makes medical care complicated.
So, if most people went to HSA type plans the overhead of insurance companies would be drastically reduced and the individual would have a great incentive to cost compare. The medical community might need help making pricing more transparent so consumers could make good choices.
Conclusion
Today because of the complexity of the way they are compensated by insurance companies and the bureaucracy from states on pricing they play games with pricing everything. A blood test might cost $500 at a hospital that really costs them $5. They charge $500 because they use that money to compensate for something they could only charge 1/2 what it costs them. The laws and all the bureaucracy create all kinds of bizarre situations which make pricing look arbitrary and insane.
What you can see in this is that the regulation of medical care causes half the problems in this business. It is too complex. We need to simplify and allow competition. Forcing everyone into the same market government, employees or individual will force consolidation of the gross complexity of the current plans. More transparency of pricing and more HSA will introduce cost savings too. The result could be a vastly simpler much more cost efficient and flexible medical system.
Obamacare is dead. If Trump gets in he will kill most of it. If Hillary gets in she will have to make major changes. It is in free fall failure mode. Either way it is dead. Good riddance. What I discovered is it is mostly a sham and has reduced the options for many Americans and enriched mainly providers and insurance companies at the expense of consumers. This must stop.
