Obamacare's impending disaster

I was visiting with a friend and fellow small businessman.  We are both 64 and male.  He said his health insurance had risen from $4000 a year to $11,000, from 2009 to 2014.  Those numbers are similar to mine. Our insurers are both mutuals—essentially non-profit insurance companies. “How can this be!” my Obama-supporting friends will protest. 

            Here’s how.  First Obamacare demands that many more things be covered than used to characterize a policy group for my friend.  He’s covered for pregnancy and birth control now.  He’s also gotten a little older. But the big reason for his costs is that he now gets lumped together with all the people who were poorly insurable, the dope smokers with pierced eyebrows, the rodeo cowboys and others who take health risks, the extremely obese who refuse to diet.  Entrepreneurs like him don’t smoke or have a lot of vices.  Starting your own business is harrowing and difficult with little room for doing stupid stuff.  If you want to start a business from scratch, you must first save up some scratch, usually 30 or 40% of your start-up costs.  Discipline.  And insurers know that a small businessman is no hypochondriac.  He laughs about how he had hernia surgery and the day the doc released him from the hospital, he was back working.  Better “moving slow” than no sales at all.  So, his $7000 “tax” (as the Supreme Court called the mandate) is now supporting the poorly insurable and approximately 1 million new people who have health care (8 million announced by Obamacare consist of 6.1M who were forced off their old policies and .9M who signed up but never paid their premiums).

            Armchair theorists were telling us last winter how people who now had insurance would feel free to start their own businesses.  Sorry. Entrepreneurship works the other way around.

            But next year we both go on Medicare.  Enjoy Medicare while you can.  The seniors have all screamed about loss of Medicare.  Neither party nor any federal official will ever take Medicare away.  But here’s what is happening.  As a single payer system, the single payer just refuses to pay as much as it used to.  Within ten years, Medicare payments will be about half what they are today—already down 30% from 2005.  So Medicare will become like Medicaid in some sense.  The situation won’t pay for a doc or hospital to take the patients.  What then? They will check to see if you have a handsome supplemental. (Another $4000 or $11,000 policy)  By the Hippocratic Oath, docs aren’t supposed to discriminate on the basis of ability to pay, but there are other methods to determine if a patient can be a client or have a procedure. (1 in 50 doctors now take Medicaid)  The docs will continue to shut down practices, either to “retire” or join large clinics and hospitals. You’ll probably see a Physician’s Assistant if you are on Medicare.   

            The other shoe hasn’t dropped.  That’s when employer mandates will be enforced.  Heritage Foundation estimates 60-90M people will lose their employer subsidized insurance.  Yikes! There are only 145M full and part-time workers.  That’s roughly half of everybody.  So all those people will soon be trying to navigate Healthcare.gov, and paying $11K like my friend.

            Now just think about where all this takes us.  We have gone through all this hope and change so far to add just another million folks.  It is costing the average self-insured person 44% more.  This disaster will soon spread to about half the working population.  Our economy is sunk when everyone gets their bill.  Of the 1600 healthcare insurance companies in 2009, we are now down to about 400 and falling. 

            Is there any reason not to vote conservative Republicans into office to fix this mess?