Obamacare 9 Month Update

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The Obamacare ponzi scheme for individual health insurance plans has been in operation for 9-1/2 months now, so I thought it would be interesting to examine how things are going. According to the Obama cheerleading squad, things couldn’t be better! Over at the Huffington Post we have this headline – Uninsured Rate Drops to the Lowest Level Since the ‘90s. The story references a recently released CDC report of a survey the agency conducted early this year (http://www.cdc.gov/nchs/data/nhis/earlyrelease/insur201409.pdf).

The number that generated the headline is this one: “Percentage of persons who lacked coverage at the time of the interview” = 13.1%. This is the lowest number since the CDC started the survey in 1997. So the HuffPo is right, Obamacare must be working!

Not so fast. The 13.1% figure includes people 65 and older. These people are on Medicare. Obamacare has nothing to do with their coverage rate (which is almost 100%). According to the 2010 census, old codgers make up 13.0% of the US population, but in 2000 they were only 12.4%. That may not seem like a big difference but it comes to about 1.9 million people, and certainly skews the statistics to make it look like the uninsured rate is down. So I did some digging.

I found a CDC report from 2009* that examines US insurance trends from 1959 to 2007, now I had numbers that were conveniently left out of the latest CDC report. In the first 3 months of 2014, the uninsured rate among people under 65 (the only ones that matter when talking about Obamacare) was 15.2%. HuffPo didn’t bother to tell us that. That is lower than last year, but it’s higher than the period from 1974 to 1989. There was no Obamacare then, but more people were insured.

Another fact being pushed under the rug is that the uninsured rate has been falling since 2010 from a high of 18.2% to the current rate. The provisions that supposedly make insurance more “available” and “affordable” didn’t kick in until January 1 of this year. Obamacare couldn’t have been causing the uninsured rate to fall before that, which makes claims that it is now the cause seem very suspicious. So if it’s not Obamacare that’s doing it, what is? The weak but ongoing economic recovery. More people are finding jobs and with those jobs they get insurance, thus there are fewer uninsured.

There’s another nugget in the report that takes some of the shine off the glowing “good news” about Obamacare. Even with subsidies being given to encourage people to buy private insurance, the percentage of folks paying their own way has fallen since 2009 from 62.9% to 61.8%. That’s not a huge difference but if you go back to 1997 you’ll find that 70.8% of the under 65 crowd had private insurance. In contrast, we now have 24.2% of the non-Medicare population on Medicaid or some other taxpayer provided coverage. That is nearly double the rate from 1997! If you have a private plan, look around the next time your go to the store. Not only are you paying for your own insurance, you’re paying for the insurance of every 3rd person you see. The US doesn’t need national healthcare – it already has it!

The uninsured rate BS isn’t the only Obamacare gem to come out lately. It turns out that a lot of people who bought plans through the exchanges will be having their insurance yanked away. Roughly 115,000 people failed to provide proof of citizenship or legal residence in the US when they enrolled. In other words, the feds suspect they are illegal aliens and illegal aliens are not allowed to buy insurance through the exchanges. Add that number to the estimate of 1.2 million who never actually paid after enrolling and the much touted 8 million sign-ups falls to 6.7 million.

But these aren’t the only enrollees who might lose their insurance. Another 279,000 folks who get subsidies have income discrepancies on their applications. If they can’t get this cleared up by September 30, these folks will lose their subsidies making their insurance much more expensive, and in many cases unaffordable. If they can’t pay the full premium, the insurance is gone!

Getting back to the 1.2 million who never paid. There is a nifty provision in the law that allows them to use their insurance for 3 months even though they never sent a dime to pay for the coverage. In month 1 the insurer will be responsible for any medical bills submitted to them, despite getting stiffed. In months 2 and 3 the doctor or hospital has to suck up the cost. For this reason many doctors have refused to accept Obamacare patients and the ones who do are now beginning to receive “you’ve been screwed” letters from insurers who refuse to pay for the “insured” patients who stole 3 months of coverage.

On a final note, over the summer insurers submitted their 2015 rate requests to state regulators. As expected, the average rate request went up, rising 3 or 4 times faster than the inflation rate. Some of those insurers are beginning to find out the results of their requests. Preferred One, the company that provided 60% of all the plans sold on the Minnesota exchange, apparently isn’t happy with the approved rate. They announced September 16 that they are pulling out of the exchange. This is bad news for Minnesotans because Preferred One sold the cheapest Obamacare plans in the state. They’re the first insurer in the country to do this, but they won’t be the last.

The Affordable Care Act – making health insurance unaffordable since 2010.

 

* http://www.cdc.gov/nchs/data/nhsr/nhsr017.pdf

About Author

Wayne Middlesteadt

Wayne Middlesteadt is a 1986 graduate of Georgia Tech and has an MBA from Georgia State University. Currently working as a financial writer and track and field historian, his latest book is Five Ways To Beat The Market.