Taking A Closer Look At Obamacare: Caution!

As Obamacare begins to take effect, here's an analysis of this massive new government effort from guest blogger Eve Pearce:

Is Obamacare Caring for the Wallets of the Average American?

It has recently come to light that the full extent of the so-called Obamacare health system plans are actually going to end up costing the average American at least $63 a year starting in 2014, with many more hidden costs besides that also being discovered. When the plans were originally unveiled nearly three years ago, certain aspects of the funding model were left conveniently vague; and now we can see why.

Kept in the Dark

Many Americans are furious about the plans to impose this $63 fee on taxpayers as it is effectively taking money from those who have already been contributing to the system and paying for their healthcare, and using it to fund those who have not previously been doing so. Much of the anger is not directed at the plans themselves but the way in which figures were kept hidden from public knowledge until after the presidential elections were all done and dusted. This may have been a coincidence, but thousands of Americans are extremely displeased with the timing of this new information release.

To assist the government to raise funds for the Obamacare policy, the mandatory $63 payment will be used to subsidize a fund for those people with pre-existing conditions who incur higher costs for cover due to their health issues. The charge is set to affect around 190 million private and employer owned health care plans, which is will put a huge financial strain on large companies who have many employees to cover. This charge is likely to be passed on to individuals in order to offset the potential damage, which has been estimated at tens of millions of dollars for some of the major employers. Passing on these kinds of charges is standard procedure in order to avoid unexpected losses, as the costs are so great for big businesses.

Where Will the Money Go?

The Health and Human Services Department is setting up a new fund which is designed to protect health insurance companies from the financial strain of the initial phase of the new legislation that is being brought into effect in 2014. The new law will make it a requirement for insurers to insure all applicants for health care insurance, no matter what their pre-existing medical condition. The law is designed to help millions of Americans to get affordable health insurance, which is not possible under current conditions, where many people with pre-existing health problems are faced with astronomical premiums or are simply refused insurance.

The $63 charge is set to raise around $30 billion in total, $5 billion of which is not actually going to go into the uninsured coverage fund, but directly into the US Treasury pot. The reason given for this is that it will be used to cover the large administrative costs of the scheme, but to the average American it feels like that money is being taken for one thing, and spent on something else.

What is in it For Average Joe?

According to the government, the scheme is actually designed to reduce the cost of insurance to the average person over time, by making insurance an affordable option for many millions more Americans, the cost of treatments and care that are never recouped from those without insurance will reduce dramatically. This will enable insurers to reduce premiums for all in theory. Is sounds good but will it work out like that in reality? Making healthcare costs lower for all by charging just about everyone seems like an odd logic. It is extremely difficult to work out the exact facts and figures right now, but it could very well be a perfect PR stunt to make people less upset about having a mandatory charge imposed on them.

The only actual figures that have been released so far are that in 2014 a mandatory $63 fee will be imposed. In 2015, 2016 and 2017 further charges will be applied, although the details of these have not yet been released. The Health and Human Services Department claim that the fees will reduce year on year until they are phased out, due to the fact that insurers will have a better understanding of the true cost implications of the new law by then. It sounds feasible, but until actual numbers are laid out in the future, we cannot guarantee exactly what the cost of this new Obamacare initiative will cost the average American. The general consensus right now is that the yearly charges that will be incurred will certainly not ‘pay for themselves’ in lower premiums in the years following.