There are a few comical foundations of Obamacare.

That we’ll have cost savings by having “competition” in the exchanges!

There won’t be any increased incentive for competition. 

We can shop in exactly the same fashion now on any decent broker’s website without facing Uncle Sam’s senseless bureaucracy. The only real difference in a broker’s website and the new Obamacare exchange is that’ll we have less choice … i.e. the four “metal levels” of coverage.

Originally, setting up the exchange program was sold to us as being revenue neutral, and now cost estimates are as high as $1 trillion dollars!

And lack of competition is not the main driver of rate increases. The main driver is medical inflation from multiple sources and unhealthy lifestyles.

Premiums have increased more in the last couple years than they did for several years before Obamacare.

Carriers can pay for anything we want, but claims have increased, so premiums must increase.

No one seems to look at carrier profit margins for some reason. Any other similar sized corporation in any other industry has double or triple the margins, and some (oil companies) even get billions of dollars in subsidies.

In the health insurance market, the highest profit is at Blue Cross, at a little over 3 percent. Compare that with the profit margins at any similar sized corporations in other markets.

Most other major carriers have margins between 2 percent and 3 percent. Clearly, margins are not the problem. 

Despite these absurdly low profit margins Uncle Sam is further decreasing carrier margins by dictating mandatory loss ratios and levying added taxes.

It’s funny: We often lump pharmaceutical companies with carriers, but pharmaceutical companies typically have double-digit margins. We can get the exact same drugs we use in the United States for 50 cents on the dollar in Canada and elsewhere.

The fact is, Americans pay at least twice per capita what people in other industrialized nations pay for health care. 

This is a 70-year-old, multi-faceted, capitalism-oriented problem and will take decades at best to change significantly.

Americans are just starting to learn that diet and exercise do matter.

Lastly, good brokers are a wealth of information like any other professionals. They educate and offer unbiased help for a minuscule percentage of the cost and a minuscule fraction of what we’re all paying for this vast new bureaucracy.

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