Emmanuel Technology Consulting

I am going to cross post this to both blogs as this affects me both as a person and a business man.

Now consider this — the PPACA sets forth a “fine” (tax) of $2,000 per employee for a business that has 50 or more and does not provide “at least” the minimum “insurance” to all.

There is no health care plan I’m aware of that a business can buy today that costs less than $2,000 per employee per year, and which also meets the requirements in the law.  None.  That was almost impossible to meet back in 1995 for a healthy, 18 year old insured single male.  It’s flatly impossible now and it’s doubly-so if your workforce has other than 18-year old single, healthy males in it.  I know this to be factual because I was responsible for buying it for our employees as a CEO of a company.

Therefore the incentive is for all businesses to drop health care. 

Period.

Second, your choice is to either (1) buy and have said plan (whether through employment or individually) or pay a “fine” (tax) of 1% of income (increasing to 2.5% of AGI in 2016.)  The minimum “fine” is $95 starting in 2013, rising to $695 in 2016.  The average family income is about $50,000/year, which means that the fine (tax) will be $1,250 in 2016.  It’s less now.

You cannot buy health insurance at their “minimum level” for anything approaching $1,250 a year no matter how healthy you are at any age. 

The law prohibits insurance companies from charging you more if you’re sick, or refusing to cover you at all.  They must accept everyone on equal terms.

Therefore:

Businesses will drop coverage; it’s cheaper (by far) for them to pay the fine and, for those under 133% of the federal poverty level, those employees can go onto Medicaid.  This is a “family of four” income of $31,900 (as of today; it will go up of course.)  That’s roughly the second quintile.

Individuals will drop coverage and pay the fine, since it’s far cheaper than to buy the “insurance.”

Both will buy the “insurance” only when they get sick, since they cannot be upcharged.

The cost of “insurance” will thus skyrocket to 10x or more what it costs now, just as it would if you bought auto insurance only after you wrecked or homeowners insurance only after you had a fire.

At the higher price nobody will be able to afford to buy the insurance at all, since that will be indistinguishable from just paying for whatever is wrong with you, plus the insurance company markup.

In very short order the entire medical system and health insurance scheme will collapse, leaving only two choices — either a return to free market principles (including all I’ve argued for since this debate began) or a single-payer, fully-socialized system ala Canada.

You can bet the government will continue to try to change the terms of the deal — including ramping up the tax/fine and other games, to prevent this outcome, but they will fail.

Now the question becomes this:

Which Presidential political candidates have told you the above, and what are their answers to this dilemma?

Let’s go down the list.

We know what Obama’s is — he passed it.  You will lose your private health care under Obama.  Period.  We are headed for a fully-socialized medical system and a collapse of the current medical paradigm under Obama.

We know what Gary Johnson’s position is — he wants to “block grant” all Medicare and Medicaid to the states, cut the amount of money in the budget (all line items) 43% and repeal Obamacare (including the mandate.)  But he refuses to demand an end to the cost-shifting where Juanita the illegal Mexican immigrant who is 7-1/2 months pregnant while drug and alcohol dependent shows up in the hospital, in labor, and foists off a $2.5 million NICU and birth expense bill on you!  He also refuses to stop the drug companies from effectively forcing Americans to bear the cost of all drug and device development and he has refused to put a stop to differential billing.  The latter two only exist because of explicit federal laws that make lawful in the health industry market behaviors that are illegal in virtually every other line of work (see The Sherman Act, The Clayton Act, and Robinson-Patman for starters.)  All of these facts are why the costs are ramping in the first place, which means his plan will simply force the States into bankruptcy and continue screwing you at the same time.

We don’t know what Romney’s plan is in detail.  He’s been oddly silent in that regard.  He says “Obamacare is not the answer” but he passed it as Governor on a state basis!  He too advocates nothing to put a stop to the cost-shifting and anti-competitive acts of drug and device makers nor hospitals and other medical providers.  He too wants to block grant Medicaid but that does nothing to address the problem and will simply bankrupt the state budgets (as noted for Johnson.)   Conspicuously absent from Romney’s plan (as is true for Johnson) is (1) a repeal of EMTALA, (2) a demand for level, consistent pricing irrespective of how one pays for a service (3) and a demand to remove anti-competitive laws protecting differential billing across state and national boundaries (e.g. Viagra for $2 in Canada .vs. $20 here) so that Americans are not forced to subsdize everyone else in the world and you pay the same price as the guy next to you in the hospital for the same product or service, instead of 2x, 3x, 5x, or even 100x as much.

So we have three Presidential candidates, none of which will do a damn thing to fix what’s wrong with health care.  All three are promoting a path that will bankrupt the States, bankrupt the Federal Government, bankrupt you or all three.

via PPACA And The Death Of Medical Care (And Choice) in [Market-Ticker].