Obamacare started out as a promise but it has turned into a tragedy. The first problem is that no one really consulted with the insurance companies to see what could be done and at what cost. Politicians do not seem to understand the role of actuaries in determining the cost of claims and the resulting premiums that are charged. The actuary is also responsible for keeping the insurance company in business. Too many companies have filed for bankruptcy because they did not predict the future adequately. When AIDS began to spread through certain occupations that were considered low risk, several companies went belly up. They counted on florists and hair dressers being safe.
Next, they never considered the psychology of the poor. Higher premiums are being charged to those who are young to subsidize the cost of insurance for those who are seniors. Many of the young are already saddled with student loans they must repay. They may be in entry level jobs if they are working. If they have chosen to live on their own, they face increased transportation and food costs. If they qualify for subsidies to be applied against premiums, taxpayers wind up paying the cost. So not only do workers pay for their own coverage, they wind up paying for those who can't afford the cost.
With three years to go before full implementation, someone dropped the ball. Problems occurred with the government website. Folks trying to enroll were not able to. If they enrolled, they could not be sure that they were insured. Hospitals had problems trying to verify coverage for folks needing to be admitted. They discovered that changes could not be made easily. Newborns could not be added to coverage. The company charged with the design of the website knew they weren't ready but no one in the administration appeared to be smart enough to figure out that at minimum, the individual mandate should be delayed.
Those who applied for coverage in December were probably told they could pay by some deadline in January. Some who have tried to pay ran into problems when their coverage could not be confirmed. The exchanges did not transfer the information to the insurance companies for all. Why there were problems has not been totally explained.
If someone dies as a result of the bungling, who gets sued? The federal government has to approve any lawsuits against them. The same goes for state government. Going through all of the hoops and limitations can wind up for naught.
The purpose of Obamacare was to reduce the number of those who were not insured. Instead, it increased the number because five million plus policies were cancelled for not complying with the requirements. In three months, only a fraction of those five million have signed up for new coverage.
Had the politicians read the McCarron Ferguson Act before proposing the health care bill, they would have realized that the states have authority over the transaction of insurance. An easier resolution would have been to tweak the benefits of Medicaid. It would have been cheaper and less chaotic in the long run.
The political ramifications may hang heavy in November's elections. If the public is not being served, there may be a greater Republican influence in Congress and the Senate. Should that become the case, who knows if the act will be repealed. It could possibly lead to impeachment proceedings against the president. And what about that extra box on 2013's W2 forms? Will some legislator decide that the amount being paid by the employer should be taxed as earned income for the employee? What does the IRS do? Look at potential taxes.
Young people may choose not to be insured. What happens if they are fined? Will they be jailed? And then what? It's time to take a closer look at all of these unintended consequences. Maybe next time our legislators will not pass a bill before they read it.
What Actually is an Insurance Actuary? | Insurance Work Force Blog
ObamaCare Subsidies - ObamaCare Facts
McCarran–Ferguson Act - Wikipedia, the free encyclopedia
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