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Good News: Obamacare Is Almost Here.

May 22nd, 2013 · No Comments · Health Care

On October 1, 2013, health care delivery in this country will begin to change. The results will be good for everyone. For the first time, the trajectory of health care costs will gradually begin to turn down. Over several years, health care insurance premiums will fall and health care costs will commensurately begin to drop. Just as with inflation or deflation, the markets will trend, and the trend now will be towards lower costs.

In spite of all the lies about “government takeover” and “death panels” which now seem silly, and the $400 million dollars spent on lobbying Republican legislators in 2009 alone by the health care industry, the American people have succeeded in creating a new, better, fairer and more efficient health care system. No repeals can stop it now.

The Republicans, to their credit, have remained loyal to their Masters…the health care industry…insurance companies, the conservative doctor organizations, hospital chains, pharmaceutical companies, the Koch Brothers and the Chamber of Commerce. They have voted against every single one of their constituents to be faithful to the almighty dollar of the American health care industry…to keep them looting the American people and cheating them out of health care…while pretending to do the opposite.

But all that is at an end. With the 37th Republican and Tea Party attempt to repeal affordable health care for Americans, and with 29 Republican governors still out there, trying to make implementation of universal health care as difficult as possible–the American people have spoken.

Forget all the other issues–gay marriage, abortion rights, wars, economic conditions—the American people had the opportunity to turn down something very valuable to them and their children and grandchildren—something that was lobbied against by the most powerful political forces in the country–yet the People did not reject it. They saw that an American President had fought against difficult, almost insurmountable, odds to win a better life for everyone. And they said: “Yes we can and yes we will!” And they voted Democrats into office and into control, so that no repeal could take place.

So with the assurance that life is going to change, it is time to revisit the Patient Accountability and Affordable Care Act, often known as “Obamacare.” The world of health care for American citizens has changed already but the biggest changes begin this fall.

Despite the actions of the billionaire-pandering Republicans in the House and Senate, despite the Republican legislatures and Republican governors in 29 states being under the thumb of the Neo-Fascist ALEC organization health insurance exchanges will be set up, either by the states or by government.

The giant corporations who make up ALEC and the cynical Right Wing billionaire Koch Brothers numerous foundations cannot stop implementation. You will be able to sign up for health care insurance and not be turned down for any reason, beginning on October 1, 2013. You will simply be able to go online and select from a variety of options that most closely match your health conditions, your family needs or your budget…or all three.

No one will be denied. The poor will have the ability to buy health care at an affordable rate through subsidies and those unable to pay will have and expanded Medicaid system. Costs will be bid down by the free-competition rules built into the legislation.

The health insurance industry will try to continue its free ride, gorging themselves on any extra pennies they can steal from Americans, but the heyday of big health insurance is over. This will now become a declining industry, and like any other phony scheme, once it begins to fall, it will collapse with a huge thud.

No one knows the exact outcome. Some countries have a private insurance system, non-profit and others have a public system run like Medicare or the VA system. But the bottom line is that, if you are sick and if you have been a responsible citizen, you will not need to worry about being taken care of in either illness or accident.
The Republicans have made Obamacare a target of hundreds of billions of dollars, perhaps a billion, of promotion in attacking it that health care costs have become prominent in our minds again. They continue to waste money on fruitless campaigns against health care reform. We know why they do it.

It is one set of crooks stealing from another set of crooks. The Republicans have sold out to major industrial interests and the people know it. The Tea Party, in the recent IRS scandal was shown to be nothing but a money laundering operation for the sinister (or why would they hide their names) actions of the Koch Brothers and other billionaire supporters.

The People get it. The Republicans, having sold out their constituents, need to con the billionaires into continuing to spend money in a lost cause. Because, without billionaire money, the truth will come out more and more…like the facts about Obamacare. If the billionaires give up on the Tea Party, the entire Republican Party will cease to exist for as far as anyone can project into the future.

The Republicans only survive because of propaganda. Rush Limbaugh’s lies and recent commentary that those who do not agree with his totally absurd propaganda are “low knowledge” citizens is not selling any longer. Over 160 sponsors, even the dregs of the national advertising community, have left him. Only the “ditto heads” the lunatic fringe listen to his pedophilic, drug addled rants.

So, without the money to create propaganda…television commercials, direct mail, newsletters…all designed to explain why they are supporting billionaires instead of the half-million people who voted them into office—Republicans and Tea Party kooks alike would disappear. This is the only reason they continue to support the impossible repeal of the Affordable Care Act, which they, not the rest of us, named, and we now (proudly) call Obamacare.

Things will start to happen fast on Obamacare, starting this October and they are all good. We’ll go into them but before that, here is what has happened already that you should know about.

These are things available to you already from your current health care provider, because of Obamacare.

1. Expanded, no-cost (except perhaps increased premium costs, if your plan was grandfathered) preventive care…cancer screenings, diabetes screenings, immunizations.

2. No lifetime limits on your policy.

3. Working young men and women or those unemployed or post-college can all stay on a family health insurance policy until age 26, even if they have access to another policy. (On grandfathered plans (see below) they can stay on only if no other policy is available to them.)

4. Children with pre-existing conditions must be covered.

Some of these things do not apply to certain “grandfathered” health care plans. What is a grandfathered plan? Some plans that have been around for a long time and have not raised their rates a higher percentage than is allowed under new regulations. That would be about 48% of all plans, so it is not an unsubstantial amount. But this was necessary to get the plan through Congress. The idea was that giant corporations who have been getting deals from health insurance providers and some who deal directly with hospitals and doctors can continue to rake in a few more chips before the People eventually get fair treatment. It is the way the American system now works, folks, so get used to it.

A couple of other things have happened. Small businesses have been able to take advantage of some health insurance subsidies already.

Small businesses with fewer than 25 employees can currently get a 35% tax credit for covering employees. So if an employee has a plan that costs $10,000, the employer can get credit for 35% of what it costs the employer. So, if the employer decides to share $6,000 of the cost and the employee pays $4,000, the employer gets $2,100 off his tax bill. So the cost to the employer is $3,900, or a little less than $350 a month and the employee gets good health care for about $350 a month. However this sounds to you, for small businesses who want to do the right thing, who want to cover employees, this is a huge savings. And the credit will go from 35% to 50% in 2014.

Furthermore, in some states, people are already signing up for health care under the new law. Some states have waivers to start enrolling people prior to October 1, 2013. In January of 2014, those individuals will be able to get individual policies in the health care exchanges by going on line and evaluating different policies. The information on subsidies based on income will be available, so individual insurance purchasers will know exactly what their costs will be. Each plan’s benefits will also be listed and comparisons can be made on line.

But, for small business, there will be a 50% tax credit. Remember what a tax credit is. If you buy a $1500 fuel-efficient heater for your house and the tax credit is $1,500, you simply subtract $1500 from your tax bill. Simple as that. Money you paid for he heater, goes right into your pocket. A deduction is something else. A tax credit is for the full amount, subtracted from your tax bill.

Companies with fewer than 50 employees comprise about 98% of all companies in the U.S. and some of those currently cover their employees. But if a company has 20, 30 or 40 workers or fewer, it does not have to provide health care for employees. There are, however, currently over 100,000 companies taking advantage of the 35% tax credit for small businesses to provide health care.

Why aren’t there more companies involved at this point? It only takes a quick glance at the first ten items on any Google search of almost any variable of “Obamacare and Small Business” and you will see that pro-Right Wing, pro-health industry forces like those of Newt Gingrich’s anti-healthcare group, or the Cato Insitute or Galen or the Chamber of Commerce has spent hugely to take the top spots.

To find something truthful and positive about health care, you sometimes have to go to the second page on Google. That is how hard the health care industry is lobbying against you.

Remember, employer-provided health insurance is big, big business….the lion’s share of the health insurance business. Employers overwhelmingly provide most of the health insurance for working families in this country. If the health insurance industry starts losing that business, their glory days are (and will be) behind them.
There will be a new Medicare tax on business but it will be less than 1% of profits and only on companies that make profits in excess of $250,000. There will be some other taxes on businesses in the health care field, but not enough to affect the health care to individuals.

So…small businesses will be able to go into exchanges and find lower cost (than current costs) plans to assist their employees. They will be assisted by something called SHOP, which is a small business insurance exchange which will offer other benefits to employers in addition to lower rates through competitive bidding and through the 35% tax break (then 50%) and through administrative simplification of health care billing.

So, while the health insurance industry would have you think that things are rosy now and will only get worse if Obamacare is adopted, actually the reverse is true. Right now, half of all uninsured individuals are small business owners and workers (fewer than 50 employees.) Because small businesses account for 96% of all companies, that is a lot of workers. So think of it this way. Who benefits from lower health insurance premiums and better health care insurance at the same time, and whom does it cost? Pretty quickly you’ll understand why the Republicans have called for “repeal” –not adjustment or improvement—37 times.

We currently have about 12 million unemployed and something like 6 million still looking for jobs not counted in the unemployment numbers. So we are pretty close to ten percent of the entire population that is either unemployed, or working for minimum, sub-living wages or simply accepting status as a permanent underclass.

Today, with unemployment, welfare and many entering Social Security sooner simply to have an income, this means that about one out of three people is in this condition. You don’t need to starve people to make them subservient. You merely need to keep them living from paycheck to paycheck and they have no way to resist or break out of either welfare or poverty.

But let’s summarize what is going to happen for individuals on Obamacare.

1. The ACA (Obamacare) ends several abuses beginning in 2014. Insurance companies can no longer deny coverage based on prior conditions. No insurance plan, whether employer-sponsored or private health insurance, whether grandfathered or not—no health insurance can be withheld because of any prior condition. Second, there are no more lifetime caps. Whatever problem you might have, whatever it costs, you will be covered. Young people up to 26 years of age will be covered on their parent’s plan if they have no other reasonable health insurance option. And finally, they can’t cancel your coverage, unless you stop paying premiums.

2. The law will save you money. In addition to the 107 million people helped by the difficulties encountered with health insurance companies from the problems mentioned above, and the 17 million people helped by having the pre-existing conditions removed from health insurance stipulations, health care will now be more affordable. For example, preventive screenings for cancer and other potential diseases will be free. This will enable millions of Americans to discover problems before they are serious, painful and expensive and, more importantly, before they are life threatening.

To make premiums more effective and less costly, health insurance firms are now required to spend 80% of your premium dollar on health care services, not on overhead like expensive CEO and executive suite salaries. Over 12 million Americans have already received average rebates of $151 from health insurance companies.
And finally on individual premium costs, the new law prevents any rate increases of 10% or more in a given year without a government review. This has caused rate increases to go down. Some rates have not increased at all in the last two years.

3. Small businesses have traditionally paid 18% more than large companies for health insurance. While no small business owner is required to pay for health insurance for their employees, over 360,000 small businesses who do have already received the tax benefits already mentioned.

4. Despite the shouting and, frankly, the lies from the health industry sponsored Republicans, Medicare will be improved, through free cancer and other tests…no copays…and the prescription drug donut hole where Senior are required to kick in a substantial amount for drugs will be totally eliminated over several years. Thus far, Seniors on Medicare have seen an average savings of about $650 per year over what they would have paid. Some costs associated with Medicare Advantage were removed from the system, amounting to about $700 billion dollars. This has been applied to Medicare funds and has resulted and will result in better basic Medicare for all citizens and has guranteed the solvency of Medicare over a longer period.

5. Finally, the government has instituted new procedures and programs to uncover Medicare fraud. And while Republicans cry “See? See what we told you…government programs corrupt!” the fact is that over $6 billion has been recovered and that–plus some other savings–have already extended the life of Medicare by 8 years from what it had been.

Who gains and who loses?

In reality, after the shouting and the lies and the fear-mongering are done, there are only two losers, and losers for whom we have a difficult time creating any sympathy. The very rich will pay ever so slightly more taxes. The health insurance companies, who have looted and cheated Americans, treating them like objects and statistics instead of feeling, caring, living human beings will eventually disappear. In the meantime they will be made to act as if the rest of Americans exist and have real health needs that must be met. All of us.

What will health care cost under Obamacare? Well, it will cost each individual less, but it will cost the wealthy more. Here’s why: because of income inequality. Taxes, though low as a percentage of income, are more highly paid in actual dollars by the very wealthy. The 4% paid on $1,000,00 is simply more than 4% paid on $10,000. This has always been the case, but since Ronald Reagan, the top 1% of Americans pay about 37% of the taxes.

Before you start weeping for the rich, however, you should know that someone like Mit Romney paid 14% on an income of $20,000,000. That’s right, he paid $2.8 million in taxes on annual income…he made $20 mil last year, this year and he’ll make 20 mil again next year. So that while will have paid a whopping $5.4 million in taxes. He made after taxes, a total of about $54.6 million over that same period. Would you take that deal?

Costs for health insurance premiums are said to average about $9,000 per person here right now, with only two thirds of the population enrolled in private health care. In Europe, the cost is something like $3,500 per person and is, generally speaking, public and is available to everyone. Not only will the cost of private health insurance go down, but there will be subsidies for those who cannot afford even the lower premium costs.

Why will costs go down? Although there is no guarantee, we do know that in any situation in which there are completely free markets (which we do not have at present) the price of most things goes down. In order to succeed in a competitive situation, companies become more efficient, reduce costs and prices and pass those savings along to the customer. And, in any insurance situation, the costs are better when spread over a larger universe. By adding 50 million people and by making the health insurance industry more competitive, we will finally have enough Americans enrolled to insure that costs finally go down.

While universal health care is not free, it is not completely an added cost. The cost to the government will be about $1.1 trillion dollars over the period 2012-2021 period or about $100 billion per year. But that is not the entire cost of what Americans pay for health care. Americans pay 18% of GDP or about $3.2 trillion…per year…on health care today. Much of that cost will come down, balancing the government expense. Some costs will shift to government, but those costs to all of us will be offset by much lower costs in the private sector. And remember, no one will be bankrupted or denied health care in the future who wants or needs it.

Some of the costs will be borne by higher taxes on those making over about $200, 000 per year, less than 1%, and a tax on capital gains of about 4%…again only on those above $250,000. Most of those people…probably 95% of them, will not notice much hardship. But the value that their small sacrifice will bring to tens and perhaps eventually hundreds of millions will be invaluable.

Will you be asked to buy insurance? Yes. Everyone will be asked to buy insurance although anyone under a certain level of income will receive a subsidy.
So here is what you can expect.

If you have an income of $15,300 or under or are a family of 4 with income under $31, 155, you qualify for Medicaid. If you have an income of between $11,000 and $46,000 and you wish to buy insurance or a family of 4 with an income of between $23,400 and $93,000 you are eligible for subsidies.

Subsidies will cut rates in half, in fact will lower rates by an average of 60%. Many states have rate review boards that save families substantial amounts. States that do not have rate review boards include: Wyoming, Montana, Arizona, Missouri, Louisiana, Alabama and Virginia.

The problem with lowering health insurance premiums thus far is that many people have stayed on their old plan thus far and grandfathered plans must not always follow the new rules. Second, rate setting is now state-by-state, so that the rules that allow states to make insurance companies either spend 80% on your health care or rebate money to you is not handled the same in every state. In some states, with strong insurance lobbies, there are no savings at all.

Even though your premium may have gone up, many Americans’ premiums did not go up and some only slightly. This was because of the new provisions of Obamacare. Here is an example of the savings.

In Alabama and Alaska…no savings to any taxpayer whatsoever. (Basically Republican states)

In Connecticut, 32,233 people saved a total of $2,369,000. (Basically Democratic state)

In Georgia, Idaho, Hawaii and Illinois, a mixed bag of Democratic and Republican states…no savings.

In Indiana, however, a state with a Republican governor and legislature…5,937 people saved $2,028,000 on premiums because the state had a strong rate review plan for its citizens and used Obamacare provisions to obtain rebates for its citizens.

So costs will go down. We spend three times as much as Europeans do on health care. Even if we cut our costs only in half, that would be a total of $9,000 for a married couple, rather than $18,000. But it will be better than that because premium rates will be bid down and there will be subsidies for many years until we have costs under control.

In 1963, Dr. Kenneth Arrow, Ph.d., Nobel Laureate in economics, described the problem with health care. And it is not difficult to understand. The reason it is not more often quoted is that, if widely known and accepted, it would end private health care immediately.

Dr. Arrow points out that when you pay premiums, they become revenue to the company. When you get sick that is a cost to the company. But the objective is maximum health. So by focusing on profit, which companies must do to survive, health insurance companies try to maximize revenues (premiums) and eliminate costs (paying for your medical care.) The more successful they are at taking care of you, the less profit they make. And the less well they take care of you, while continuing to increase premiums, the more profit they make.

Private health insurance is an unsustainable business model. It does not work as a business corporations became the health insurance provider of choice. They simply continued to pay higher and higher premiums, or they cut back on health care or they presented workers with a higher and higher share of the costs. Labor unions also maintained large numbers of members on health insurance for obvious reasons….taking care of workers, income and benefits, which of course is their job.

Now, with Obamacare, the equation changes. Companies can provide health care or make a default payment, a sort of donation to the national health care. When they make that decision, workers then go into the local exchanges, and, depending on their economic situation will receive assistance in buying private health insurance.

There is a major difference in what happened when employers laid off workers in the past. In previous years, employees were able to get health insurance, but at expensive COBRA prices, paying virtually the entire health care premium (after having been just laid off) and that was only good for 18 months and then they might be without health care at all.

There will be no more COBRA. You won’t need COBRA. In the world of world-class health care, you simply pay for it and you get it. And either government pays for it, included in your taxes, or you pay for it, as you do now, only government makes it more affordable. Which, of course is what they should have been doing for the last 40 years. That is how far behind the rest of the advanced world we are.

You may notice, by the way, that we are not the most advanced country in numerous categories. It is mostly in the social and cultural areas, although Iceland has proved that we are far behind in handling white-collar, financial crime as well.

So, on October 1, 2013, you will register for the first national universal health care program. No death panels. No government takeover. Just good health care at an affordable price. Hey…that sounds like a commercial!

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