Americans with the least income are faced with a substantial yearly
and monthly after tax salary reductions even though their healthcare insurance
policy is subsidized by the government.
On January 1,2014 they are mandated to have healthcare coverage.
A person with a Modified Adjusted Gross Income receiving $27,925
from all sources of revenue will pay $187.33 per family member per month.
The total price for a family of four is ($2,247.96 per year times
4) $8991.84 in after tax dollars. This
pays for a Silver level plan that is next to the least expensive plan to be
offered by the health insurance exchanges.
If a person who has this plan goes to a physician or a hospital the patient’s deductible will be sizable
despite the government subsidy.
Even if the family has subsidized healthcare insurance these
families might not be able to afford to use the insurance.
The quality of life of a low earner will be compromised. He must
buy the subsided healthcare insurance. The result will be he will have to make
cuts in buying food and adequate housing in order to pay for the healthcare
We have not heard much about this problem from the Obama
As the insurance industry raises premiums on private insurance
they are also going to raise the prices in the Health Insurance Exchanges.
If the family opts out of buying the insurance they will have to
pay a penalty.
It is actually better to pay the penalty and then sign up for
insurance if you or a member of your family gets sick.
The fee paid for
insurance in 2014 will varying according to 2012 income. If a family income
rose in 2012 and the breadwinners lost their jobs in 2013 and 2014 the family
could not afford the MAGI healthcare insurance premium they would be required
If income increased in 2013 they would be liable for the
increase the next year.
In the meantime, states such as California are decreasing
reimbursement for physicians. Physicians are choosing not to participate in
both Medicare and Medicaid. This will increase the physician shortage.
The only choice states have left is to tie medical license
renewal to physicians accepting Medicare and Medicaid.
At the same time states and the federal government are
decreasing funding to already financially stressed charity safety net hospital
systems. Many of these institutions have closed. Most of them are failing.
The decrease in safety net hospital systems will further
decrease the options for low-income earners to receive medical care.
Obamacare is turning out to be a not well thought out plan. It
is a series of Catch 22s.
The only winner is the healthcare insurance industry which will
provide the administrative services to the government to adjudicate claims. It
will receive both the government subsidy and the payment made by the low-income
Obamacare has deceived the public. As I have stated in the past Obamacare has
some good ideas but the structure, regulations and execution are terrible.
Obamacare sounds good when President Obama talks about it but it
is an impending disaster medically and financially for Americans.
Only a consumer driven healthcare system with the bullet-proof
ideal medical savings account will align all the stakeholders’ incentives.
The opinions expressed in the blog “Repairing The Healthcare System” are, mine and mine alone.
If you have enjoyed it please have a friend subscribe