The official “sign up” for the Affordable Care Act (ACA), now known as Obamacare, begins tomorrow.
The stated goal for this law, signed in March of 2010, was to lower health care costs.
News accounts regale insurance premiums are “16 percent lower than originally projected” and that “nearly all consumers (about 95 percent) will have a choice of two or more health insurance issuers and nearly all consumers (about 95 percent) live in states with average premiums below earlier estimates,” says the White House’s final briefing on the marketplace premiums.
But how do those compare to existing premiums available?
Let’s look at a few facts that are critically important to individuals and businesses:
1. Tomorrow, every employer, regardless of size or benefit offerings is required by law to provide written notification about the state exchange. The initial fine was, like countless other requirements, changed. Yet, advice coming from folks like Tennessee’s National Federation of Independent Business and the National Association of Health Underwriters is to comply with these written notifications to avoid a retroactive penalty.
2. When the ACA program is operational on Jan. 1, 2014, individuals who remain uninsured will be fined at $95 or up to $285 per family by the IRS on your 2015 tax form, or 1 percent of your gross income, whichever is greater; $325 per individual and up to $975 per family, or 2 percent of your gross income in the second year; and at $695 per individual and up to $2,085 per family thereafter.
3. Twenty new taxes will be paid for by the American public over the next 10 years, totaling $514 billion in new revenue, with 16 of these taxes already being collected.
4. The Manhattan Institute reported: “Between 2014 and 2022, the increase in national health spending amounts to $7,450 per family of four” directly the result of the ACA.
5. A prospective analysis conducted by two fellows of the American Academy of Actuaries published in its January/February 2013 volume documented the funding of the ACA is through “age band compression.”
The “Contingencies” journal notes, “The essence of age band compression is that younger people pay more for their coverage so that older people can pay less…”
Senator Lamar Alexander took the current plans available in Tennessee comparing them to the ACA Exchange Plans and responded:
• “… A 27-year old woman in Nashville can buy a plan for as low as $58 a month. On the exchange, the lowest-priced plan is $114 a month – a 97% increase. With a tax subsidy, that plan is $104 a month…”
6. Premiums are not to be increased based on over-utilization or health of the insured individual. Unlike car insurance, when you have an accident, receive a ticket and have other high-risk behavior, your rates are higher while good drivers are incentivized with lower rates; the ACA allows increases to apply to all in a group, not individuals.
With all of this information, new government price control and regulation, have the drivers of cost been addressed in health care? The answer is absolutely not.
America’s health care market is not a free market able to respond to consumer choice, need and competitiveness.
Socialized medicine grows malignantly in America.
Robin Smith served as chairwoman of the Tennessee Republican Party, 2007 to 2009. She is a partner at the SmithWaterhouse business developmet and startegic planning firm and serves on Tennessee’s Economic Council on Women.