I try to stay out of the politics scene even though I have fairly strong political views but I feel that I simply have to comment on this because it has the potential to affect nearly everyone concerned about their health and health insurance.
There has been a lot of coverage lately about failures with the rollout of stages of ‘Obamacare’ and numerous people losing their coverage. The President felt that he needed to apologize for the way things are going. Bill Clinton has even chimed in and stated “I personally believe, even if it takes a change in the law, the president should honor the commitment the federal government made to those people and let them keep what they got” in a recent interview.
Well, here’s the real deal…
Obamacare simply cannot work with the promises that have been made. The fallout from trying to cover everyone regardless of pre-existing medical conditions is simply going to make costs go up in regards to the prices of your insurance plan. Dave Ramsey did an excellent job of describing the details in a recent video.
I don’t care if you are Democrat or Republican or TeaParty or Libertarian. This law will not work and costs are going to go up!
Insurance is a business and they are in business to make money. The idea is that their consumers pay into the ‘pool’ and if they have something go wrong and need to call on their insurance plan then the money comes from the pool. Insurance companies use actuary tables to determine the risk that each customer will need to call on these resources. The higher the risk the higher your insurance premiums. That is how the insurance game works.
Now, part of the Affordable (ironic, right?) Care Act (aka Obamacare) mandates that insurance companies cannot use these actuary tables to charge higher premiums to those at higher risk. In this case it is their customers with pre-existing conditions. Yes, these customers are much more likely to withdraw money from the pool. Therefore, the insurance companies have to increase the size of the pool in order to stay in business.
Any idea what that means?
Thats right… everyone has to pay more!
So now we have a young, healthy male that doesn’t smoke and has a very low risk of needing to file claims on his health insurance yet is having to pay much higher rates to subsidize the other, sicker people in the insurance pool.
True, there has always been an element of this but they used to be able to adjust the premiums reducing the burden on the healthier based on risk (actuary tables) but this is no longer the case.
There are obviously multiple issues with this but it is basically a communistic approach to mandated health insurance. Again, I’m not trying to be political and I’m certainly not advocating for or against President Obama but the very basis of this law is going to increase costs to most people across the board.
Granted, there absolutely needs to be health care reform as I totally agree that the system is utterly broken. But there are much better solutions out there. The law does do some good things but dramatic changes need to be made.