As many of America’s largest insurers are withdrawing from the Affordable Care Act, it is becoming clear that President Obama’s signature legislation is a failure.
But perhaps one of the largest political failures is that many of the pundits and talking heads discussing Obamacare aren’t even that familiar with the Obamacare exchange because they use private healthcare. Admittedly, having always had private insurance myself, I had only a rudimentary understanding about how Obamacare (and American insurance in general) operated.
This is where my Obamacare story begins.
After leaving the private sector to attend law school, I was forced to purchase healthcare. My school doesn’t provide insurance, but proof of insurance is a requirement for enrollment. Without any healthcare savvy, I selected a plan from Healthcare.gov for $40 a month simply because it fit my modest budget.
Satisfied, I went about my business, preparing for a new chapter in life. Only when I went to refill my prescription with my new insurance did I uncover that pre-existing conditions were not covered under the plan that I purchased. I had to purchase the medicine I needed at retail price.
Not only is this the exact opposite of what Obama promised before ramming the Affordable Care Act (ACA) down the collective throats of the American people, but my pre-existing condition is a common one. If I’m not covered, that means that many other Americans aren’t covered. This got me thinking: who is actually benefitting from Obamacare?
My plan has a $5000 deductible, which means that I must pay $5000 out of pocket before my insurance will cover any expenses. To put this in perspective, the average cost of an emergency room visit is $1233 according to BlueCross BlueShield. According to the John’s Hopkins School of Health, the average cost of a doctor’s visit is $200.
With my insurance plan, I could have two check-ups and an ER visit in a year, and not even reach half of my deductible.
If Obamacare doesn’t cover my pre-existing condition, and I’ll never reach my deductible, why bother having insurance in the first place? I get the worst of both worlds —paying out of pocket for doctor’s visits and medicine, while paying monthly for insurance that does not cover these medical costs.
I suspect that many others are in the same boat.
For businesses, Obamacare becomes a bit more complex. According to the Heritage Foundation, businesses are charged a “Health Insurance Provider Fee.” This fee amounts to an excise tax on insurance. The rate of the tax is set by the Treasury, and the revenue raised from this tax is projected to reach at least $13.9 billion in 2017.
Employers that self-insure are exempt from this tax, and only 14% of American businesses don’t self-insure. Additionally, more than 96% of American small businesses with 50 or more employees already self-insure. Therefore, most full time employed Americans do not benefit from and are not hurt by Obamacare. Businesses with twenty-five or more full-time employees who do not self-insure must simply deal with the rising costs.
Small businesses that do not self-insure bear the brunt of the burden. The same Heritage Foundation article cites a study by the National Federal of Independent Research Foundation that says that the private sector will lose 146,000 jobs by 2022 due to the rising costs of insurance. Many employers simply will not be able to pay.
So we’ve established that a vast majority of the full-time employed do not benefit from Obamacare. We’ve established that Americans with pre-existing conditions do not benefit from Obamacare. That leaves us with the working poor, and the non-working poor. Admittedly, some of the working poor and lower middle class may benefit.
If you make enough money to pay your monthly premium, and you or your family are capable of reaching your deductible without going bankrupt, there could be some value for you in Obamacare. This is provided that you do not have a pre-existing condition, of course. If you are poor and unemployed, chances are you cannot afford a monthly premium. You will most likely end up on Medicaid if you need healthcare.
From what I can tell, only the working poor and lower middle class whose employers do not self-insure, who do not have pre-existing health conditions, and who can afford monthly premiums and reach their deductibles, can possibly gain something from Obamacare. But that is the tiny subset of the American population for which the taxpayer will, according to Reason.com, foot the $42.7 billion bill in 2017 alone.
Most of the money will end up in the hands of insurance giants. As it turns out, they are the ones benefiting from Obamacare the most.
It is simply business as usual in D.C. and ordinary Americans continue to get the short end of the stick. The sustainability of Obamacare is already in question. What will it take before we scrap this disaster completely?