Obamacare: A Lousy Deal for Families

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Ready or not, Obamacare is finally here.  Polls show that most Americans remain highly skeptical of the law’s benefits.  According to a new CNN/ORC International survey released October 1, less than one in five Americans say their families will be better off under the new health care law.

Nevertheless, the controversial law’s passionate defenders insist it represents an historic event.

It extends health care coverage to between 10 and 35 million Americans, depending upon how many will actually choose to sign up, and represents the single biggest change in health care financing since the advent of Medicare in the mid-1960s.

More controversial is the claim that Obamacare will reduce costs for most Americans.

Republicans insist that the costs of Obamacare will be enormous and that they will be borne by middle class families who can ill afford them, especially in the current economy.

Democrats, like the president himself, claim that most families will actually save money with Obamacare.  Obama himself claimed that the new law would reduce premium costs for the average family by $2,500 a year.

Senate Democratic Whip Dick Durbin (D-Ill.) insists that Republicans are “desperate” to stop the law before it goes into effect so ordinary people can’t learn more about the law’s many benefits.

“That’s why Republicans want to stop Obamacare,” the Illinois liberal said. “They don’t want these exchanges to be announced. They don’t want people to see these options. They know what’s going to happen.”

Well, like many Americans, I decided to run the numbers for our family.

As a self-employed writer, I’ve bought my family’s health insurance for the past 25 years.  We’ve been with Blue Cross ever since my wife and I were married.  At first, we had fairly low deductibles… but as premium costs escalated over the past 10 years, we, like most business folk, have gradually raised our deductibles and paid more of our health costs out of pocket.  I remember paying about $5,000 for every birth, for example.

Our current Blue Cross plan currently costs us $650 a month or $7,800 a year with a $5,000 per person deductible with a maximum out-of-pocket family limit of $15,000. This is the type of plan that the Democrats ridicule as little more than “catastrophe insurance” and “not really health insurance at all.”

And I must admit, when compared to the taxpayer-provided Cadillac plans government workers and teachers get, I suppose that characterization is fair.

The chief advantage of our current insurance, for us, is that it limits the outrageous fees that hospitals  and doctors can charge.

For example, a typical visit to a hospital emergency room two years ago – when one of my sons had severe stomach pains and we suspected appendicitis – was billed at around $10,000.  Blue Cross disallowed 90% of that as absurd over-billing and we ended up paying $1,000 out of pocket – still a lot for a 3-hour visit, but a lot less than we would have paid.

Nevertheless, we pay enough in out-of-pocket fees each year that I was willing to give Obamacare the benefit of the doubt.

I spend a lot of time in British Columbia and look longingly at BC Medical Services Plan (MSP)’s monthly premium of $128 per family of three or more — with all primary care (excluding dental) covered.  My eldest son’s new British wife extols the virtues of the National Health Service (NHS) which will pay 100% of the costs associated with the delivery of their expected first child – albeit delivered by a China-trained midwife and without the benefit of the epidural American women say is a necessity.

So, using MSNBC’s nifty Obamacare calculator, I decided to take a hard look at the numbers.  (You can use the calculator yourself by clicking here.)

We are a solidly middle class family – yet, with so many children, we qualify for a substantial tax credit.

Under Obamacare’s Silver Plan (comparable to our current Blue Cross plan) our annual premiums would cost $18,190 – or $1,515 a month.

That’s $865 more than we’re currently paying – an increase of 133%.

With a projected tax credit of $4,890, however, that would lower our annual premiums to $13,300 ($1,108 per month).  That’s  still $458 more per month (or 70% more) than we currently pay—and we have to, in effect, loan the government money because we actually have to pay the $1,515 per month and only get a tax credit at the end of the year.

But that’s not all.

All this might be worth it if the Obamacare plan provided better benefits or a lower deductible – but it doesn’t!

The law’s defenders ridicule our current plan as mere “catastrophe insurance” because of the high deductibles and out of pocket costs, but the Obamacare plan for our family has an annual cap on out of pocket expenses of $12,700 – or just a little less than the Blue Cross limit of $15,000.

In other words:  Obamacare is just as much “catastrophe insurance” as most high-deductible private plans.

As a result, I calculated the costs of three scenarios:  (1) we spend 100% of our out-of-pocket limits; (2) we spend 50% of our annual out of pocket limits; and(3) we spend 0% of our annual out-of-pocket limits (basically, never visit a doctor all year).

Under all three scenarios, Obamacare represents a real increase of $3,200 to $5,500 a year for our family.

Finally, the worst aspect of the new law is that, while you pay substantially more for the same coverage you can get privately, your choice of doctors and providers is more limited under Obamacare.  Our Blue Cross PPO plan covers pretty much every doctor and clinic in our area.  Obamacare is more like a HMO in that limits the doctors and hospitals to which you have access – in some areas, severely so.  (See the Heritage Foundation’s analysis here.)

My conclusion:  Obamacare doesn’t make any financial sense whatsoever for our family…and is a lousy deal.  We will stick with our Blue Cross plan, which I don’t particularly like, because government provided health care costs more and offers less choice, not more.

By the way, on October 1, the U.S. Senate voted to provide massive subsidies to itself and its staff – so the politicians who voted for Obamacare would not themselves have to pay any of the new costs associated with it.

One final note:  As a self-employed business person, I’m pragmatic.  I think the U.S. is rich enough that it actually could provide a generous, single-payer health care system that eliminates the over-priced and wasteful system we have now.  Medicare really is proof of that.

To fund such a system, I propose we eliminate 30% of the do-nothing government jobs we currently pay for – along with the six-figure, retire-at-50 pensions we also pay for – and use that money to fund the single-payer healthcare system the Democrats want so badly.

Let’s make a deal:  In exchange for a single payer system, Democrats will agree to eliminate 30% of all government worker jobs (the assistant sub-deputy undersecretary for the Department of Public Money Wasting) along with their fat pensions – to shrink the government back to what it was in, say, 1990.

That would be a deal the country would support, could afford, and which might actually fix the long-term health care crisis.

image: Jose Gil / Shutterstock.com

Robert Hutchinson

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Robert Hutchinson studied philosophy as an undergraduate, moved to Israel to study Hebrew and earned an M.A. degree in Biblical studies. He is the author, most recently, of The Politically Incorrect Guide to the Bible. He blogs at RobertHutchinson.com.

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  • Whew2

    The ACA funds programs that are morally unacceptable. How much worse will it become, under a single payor; when there are no other choices?
    When the government is allowed to define the market, the market can’t do its job.

  • waynergf

    Say what? “Medicare really is proof…(of) a generous, single-payer health care system that eliminates the over-priced and wasteful system we have now?”

    After 50 or so years of Medicare / Medicaid deficits, and ever-increasing healthcare costs, what twisted logic led you to that conclusion?

    And if it were true, the answer to our problem could have been implemented years ago: Put everyone on Medicare!

  • blessedx4inTX

    I may not agree with everything the author said, but I appreciate his honest analysis of the lack of benefits(and actual harm to the finances of most families) of the ACA.

  • Susan

    The U.S. has 200 Trillion in unfunded liabilities, Social Security is already in the red and Medicare is 33 Trillion short. Total run government health care is not the answer.

    Obama Care has been based on one lie after the other. If you have insurance you can keep it. Premiums will go down. And on and on. Federal law prohibits tax dollars to be used for abortions, but Obama Care does. If you read the bill, you will also discover that Obama Care requires that you be ‘fitted’ with an RFID chip which will contain your health and financial information
    .
    The three main selling points of Obama Care- Closing the ‘donut hole’, ending the pre-existing conditions discrimination, and providing medical coverage for the uninsured can be accomplished without a complete government run system.

    Dr. Ben Carson has brilliantly outlined such a plan involving ‘giving’ Health Savings Accounts to people where by they can purchase medical insurance on the free market, across state lines, is portable, and addresses the medical liability costs of doctors and the low pay ‘doc fix’. It’s just common sense and limits the role of government.

    The IPAB board- (the death panel) is 15 unelected bureaucrats – will have final say
    on who is’ worthy’ of treatment. If Congress does not repeal Obama Care by 2017- nothing can change that.

    We have been lied to about Obama Care. Read the Bill. Ask who wrote this. Ask why Congress and staffers, including the IRS want out of this. Look at the job loses, the 40 hour work week is being destroyed, even the unions don’t want this.
    Ask the Native Americans about their government run health care. Dr. Ben Carson has the right plan.

    People, wake up, government run health care is about control not providing medical care.

  • neilshog

    There’s only one person to blame for this debacle…Supreme Court Justice, John Roberts. This nit wit had the deciding vote that passed this mess. Hope he’s happy that he screwed the majority of the American people. Notice you haven’t heard a peep from HIM.

  • Johnny Frugal

    I too am self employed. At best I am at the bottom range of middle class income. Here in New York state we were already living under the most regulated, least competitive, most expensive insurance market in the country. Now, like you, I have done the math, and I am facing a near doubling of my premium costs. This after having received a deceitful letter from the state stating that my premiums would not rise and might even go down. I am able to live a pretty comfortable life on a low to moderate income because I am able to do many things for myself. Not the least of which is think. Now the government has stepped into a realm they had no place in, to tell me I am not capable of making my own choices, and may very well force me into poverty.

  • BillinJax

    neilshog, here is a post of mine after that fatal day.

    The shot in the back of America designed by Obama was delivered with a GIANT assist by Chief Justice (denied) John Roberts. His deciding vote was the single act of constitutional tyranny, whether under duress due to personal threats or a prideful display of ultimate authority to chastise a delusional electorate, in effect gave legal legitimacy to the most corrupt element of domestic political terrorism our country could possibly have elevated to power.
    He must be remembered as the one person who could have justifiably at least postponed our economical demise and slowed the progression of socialism so obviously desired by the democratic machine being used by the Obama regime. We will be rehashing the Kennedy assassination forever and debating who fired the shot from where. However, I submit there will be no doubt from here on out as to who it was who fired the fatal “shot in the back” of American constitutional justice allowing Barrack Hussein Obama to saddle his horse and sound the charge for his Marxist bureaucracy to diminish our once proud nation to a third world dictatorship with him as the supreme ruler.
    Justice Roberts, after listening to the Obama team arguing for months their
    health care scheme penalties were NOT a tax in order to sell the program to the public, for some still unbelievable reason single handedly, knowing what the ramifications of a single payer system which Obama stated he wanted to eventually accomplish for his socialist transformation of America would do to the country, chose not to simply judge the case on those merits and thus allow for further debate on how to fix the system without a government taking over but rather to become an advocate for the president advising his lawyers the heavy fines within the AHA on individuals and companies should actually be considered a tax in order to make the bill legally constitutional.
    All those democratic Catholic politicians in Congress and those with key
    positions within the Obama administration who blindly marched lockstep with his socialist agenda could have been stopped in their tracks by a single vote on the part of John Roberts who we had considered a conservative Catholic up until that time.
    We are reminded once again of how even among the chosen there can be a Judas

  • Poppiexno

    Amen!

  • Poppiexno

    I recently watched some “person on the street” interviews on TV. At least three people, when asked if they preferred Obamacare or the Affordable Health Care Act, opined that they were opposed to Obamcare but favored the AHC act. Anecdotal, not statistically significant but probably indicative of the apathy and lack of knowledge of many. Labeling the act “Obamacare” is one of the few semantic victories by conservatives against liberals who are masters at disguising the truth. The AHC is anything but affordable; homosexuals are “gay,” abortion is disguised as “a woman’s choice,” and an infant in the womb is a “fetus,” a (correct but technical) term that applies to all mammals. Read the titles of bills introduced by liberals in congress for other examples. Do they take a course in obfuscation?

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