ObamaCare's Tangled Web Continues To Unravel

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No later than November 1 thirteen states & DC plan to cancel ObamaCare policies that do not conform with the national healthcare law – such policies, affecting thousands of people (250,000 in VA alone), do not offer the level of coverage required by ObamaCare.  It was this time last year that people were having all of the computer problems with both the federal & state healthcare websites that would not allow them to sign up for ObamaCare.  Accordingly BO issued a directive that allowed states to extend nonconforming policies.  The aforementioned 13 states & DC that granted a reprieve last year are no longer willing to do so.  Over the past year BO had carefully timed waivers & extension through executive orders to soften the blow of ObamaCare thereby protecting his Democrat supporters' reelection chances.  But setting up the unleashing of thousands of cancelation notices a few days before the midterm elections was a sloppy mistake - the federal law requirement of 60 days prior notification of cancellation was overlooked.  Although the exact number of cancellation notices that will be sent is not clear four of the states involved have tight senate races – NC, KY, CO, & VA – & these cancellations bring an unfavorable ObamaCare feature to the public's attention @ precisely the wrong time for Democrats.  Early voting by unsuspecting Democrats may not be enough to overcome the damage that will be done on election day.

 

Much more connived is the increase in ObamaCare premiums for 2015 that are currently known but are not scheduled to be released until November 15 per BO's executive order – this is the type of trickery we are more used to in watching the fundamental transformation of America right before our very eyes.

 

The Joint Committee on Taxation has calculated that the ObamaCare legislation will levy between $675 billion & $800 billion in new taxes over the next ten years to offset some of ObamaCare's costs for subsidies & Medicaid expansion.  The subsides help people, who make between 100% to 400% of the federal poverty level, pay their healthcare insurance premiums & the taxes levied for Medicaid expansion cover government costs for providing healthcare services for many of the poor who currently use the emergency room as their primary medical facility.

 

In all there are twenty-one taxes, most of which have increased since the passage of ObamaCare into law, that will be paid for by all taxpayers – not just those in the highest tax brackets.  Originally BO had unilaterally determined that singles making over $200,000 per year & couples making over $250,000 per year would pay most of this additional cost – these earnings figures are not indexed for inflation.  However twelve of the twenty-one new taxes are paid by people below this threshold – meaning most of us.  See the aptly named Grabbing All Of Our Stuff for details.

 

This amounts to a trade off – taxpayers pay additional taxes to cover the healthcare insurance costs of people who did not have healthcare insurance before the passage of ObamaCare.  The people with newly acquired healthcare insurance appear better off than before but we don't know what benefits the taxpayers in this arrangement would have produced with their money if these new taxes had not been imposed.  We do know in general that government spending @ any level should be minimized because it is "improbable that the wealth created by government spending will fully compensate for the wealth destroyed by the taxes imposed to pay for that spending." – source Henry Hazlitt – Economics In One Lesson.  In essence the private sector overwhelms the public sector in the creation of wealth because the latter does not benefit from the excellence of competition of the free enterprise system.

 

It was about a year ago that Tammy Bruce first alerted us to the problem of the high deductibles of the ObamaCare Bronze plans (generally the plans with the lowest premiums) – typically deductibles in the $5,000 range before the plan would start to pay.  People are finding that what they thought was going to be healthcare insurance that covered teeth cleanings & routine eye examinations is really policies with several thousand dollars of deductibles meaning it is not really what they were hoping for @ all – they are paying something for nothing as far as they are concerned.  (People between 100% & 250% of the federal poverty level may be eligible for Cost-Sharing Reduction Subsidies which can help lower deductibles, copayments, coinsurance, or any other costs the insured is required to pay – which helps out some.)

 

The purpose of insurance is to protect the insured from a catastrophe they cannot afford to pay for themselves.  Over the years as the entitlement state has grown in America & people got more & more used to thinking they are not paying for anything themselves insurance has come to mean every routine healthcare maintenance item imaginable.  In this sense it is ironic that for many people the policies listed under ObamaCare are more in line with the classic definition of insurance than the free no-charge policies people envisioned when they were totally for the law.

 

During the past year healthcare costs have slowed & ObamaCare may have inadvertently contributed to this because it is a documented fact that high deductible healthcare insurance plans, like those provided under ObamaCare, reduce spending more than plans with no co-payments (i.e., suddenly people were paying when they went to the doctor).  The classic Rand Health Experiment that studied healthcare costs from 1971 to 1982 found the spending reduction to be 30% greater for high deductible healthcare insurance plans than plans with no co-payments. 

 

As companies prepared for BO's imminent increases in the federal minimum wage businesses started balancing their costs in 2014 by raising workers' contributions to employer sponsored healthcare benefits – see graphic above that shows low wage workers are the ones most affected by this cost shift – because they are the ones who will get the wage increase mandated by new minimum wage laws.  How long this will continue is uncertain – low wage workers may decide not to participate in their companies' healthcare insurance programs but could rather take their chances with the ObamaCare penalty in future years relying on the emergency room for medical services – both routine or real emergencies.

 

In addition, Wal-Mart, Home Depot, & Target – for starters – have dropped healthcare insurance coverage for employees who work less than 30 hours per week on average, thereby either throwing these employees onto the healthcare insurance exchanges if these employees want healthcare insurance coverage (significantly paid for by taxpayers like you & me) or having these employees go without healthcare insurance meaning they are subject to the penalty (tax) imposed by the individual mandate.  This phenomenon was delayed about a year ago when BO waived the employer mandate until 2015 – it is only now that employers feel the need & incentive to reduce workers hours in such a way that will avoid the impending employer fine (tax) that starts @ $2,000 per employee mandated by ObamaCare.  Up until now the extremely high portion of the work force who work part time for economic reasons was just plainly caused by BO's purposely designed poor economy & had very little to do with the ObamaCare employers' mandate.

 

The table below from the National Federation of Independent Business (NFIB) provides a good primer for nine different scenarios regarding how the penalties (taxes) are determined.  Scenario #9 shows how employer healthcare insurance penalties (taxes) are reduced by replacing full time employees with part time employees.

 

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Although ObamaCare still has not entirely kicked in readers of RTE can see what is coming – the continuation of BO's tangled web to make people totally dependent on government - both financially through taxes & physically through universal single payer healthcare.