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Health care bubble

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Back when Obamacare (“PPACA”) was introduced, and Obamacare supporters’ espoused, “You’ll have to pass it to see what’s in it,” I became skeptical, to say the least.

Who can trust any politician these days, anyway?

The left screams that Obamacare “Is good for you,” “You can keep you own doc,” and “You don’t have to change plans if you don’t want to.”

The right claims, “This is the end of the world as we know it.”

Several thousand pages of regulations and a few years later, the people on both sides are still screaming, trying to improve their future election chances, and we’re finally starting to get an idea what Obamacare is going to do to this country.

I’ve finally gotten through all of the CMS educational requirements for helping my clients through this transitional phase, and I certainly don’t like what I’m seeing so far.

When October 1 comes around, and the Obamacare exchanges are supposed to open, I suspect I’ll be doing some screaming of my own.

Based on the country’s experience with Medicare, Social Security, the Postal Service, thousand dollar hammers, and several other examples of failed government experiences, I’m left wondering how someone could even think up a program like Obamacare.

The supporters say, “It’s about affordable health care.”

Affordable? Really? As compared, exactly, to what?

A couple of examples should help me make my case: Kaiser Family Foundation claims the premiums are “more affordable than expected.” So, just how much did the foundation expect the coverage to cost?

The Manhattan Institute states that the overall costs are approximately 24 percent higher, on average, in those states that have already set up their own exchanges. The institute then gives about 15 examples.

Both organizations have a fine reputation, but both are missing what I think is the most important point.

When I sit down with a potential client to discuss the cost vs. benefits of buying a certain type of medical insurance policy, I discuss not only the premium, but what you get for your buck.”

Here are a few of the items we normally discuss, to drill down and find out what’s most important to the clients: Office visit costs, emergency room charges, potential maternity costs, tests, deductibles, co-payments and co-insurance amounts, and the maximum out-of-pocket expenses they could end up paying “if the world goes to hell in a hand basket.”

I also discuss the importance and advantage of staying in the “network” of a plan’s participating doctors, and hospitals, so that there is no “balance billing” — charges over what the insurance company feels is the norm for the type of treatment or service the patient has received.

Forgetting for a minute the complicated formula PPACA has attached to the premium and out-of-pocket cost calculations for those on the lower level of the income scale — people living at poverty level, who, in many cases, may not understand how PPACA premium tax credits and cost-sharing subsidies will affect their monthly costs — and take a look at the bottom line.

Even if the premium was free for everyone that was eligible, think about the budget-busting out-of-pocket expenses.

Even with PPACA cost sharing assistance, some families in exchange plans could face having to pay a total of almost $13,000 in out-of-pocket expenses, in addition to unlimited “out of network” expenses.

The recently released base “silver” plan in California reflects a $6,400 single-person maximum out-of-pocket expense, including up-front deductibles ranging from $250 for meds and $2,000 for most other benefits, and a non-subsidized 20 percent coinsurance level. The out-of-pocket maximum could total an unbearable $12,800 for a two-person or larger family.

How long does anyone think those formerly uninsured people facing those big out-of-pocket expenses will be able to survive?

I could go on, and on and on about this, but, from the point of view of an agent who’s been helping lower-income people and small employer groups in the health insurance market for the last 30 years — someone who has nothing to gain from favoring any side or any office to hold — this is starting to sound like the biggest soon-to-burst bubble of all time.

Time will tell of course, but I think they got this all wrong, and need to postpone it and revisit all of this before it explodes all over our faces, just in time for the elections to begin again.

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