I like this map because it illustrates the complexities of the upcoming healthcare law. There have been many books, blogs, and videos about what this law will do, and how it will affect us. This image might help all of us to understand that in spite of our best efforts, understanding this Act could be tricky.
Let me start off with what I do know. Starting in October 2013, everyone will have the ability to obtain a major medical plan regardless of preexisting conditions. The fact is that most states already have systems in place that offer these plans at very reasonable rates. As with any large program, there are holes, and some people find themselves in them. For the people that cannot afford health insurance currently, their situation may not change much. Unless they are so poor that they actually get coverage for free. There will be exchanges set up by the Federal gov't or the states (at the present time, over half of the states in the Union have declined to run these exchanges). Consumers will have a choice of three or four major medical plans. The law states that all people must be covered by a compliant plan, or they will be taxed. The tax/penalty will be levied by the IRS at tax time (when we file our taxes). In 2014, the tax will be $95/ individual, or 1% of their income...Whichever is greater. For example, if you are making $50,000/yr, you would be assessed a $500 tax when you filed your taxes. The years following are similar, the tax just increases. 2015 $325 tax, or 2% of income. 2016 $695, or 2.5% of income. You can see how the taxes can add up. The other side of the coin is that you could be saving more than the tax if your health insurance premiums are sufficiently lower than the ones offered by the qualified plans. As always, the "benevolent" government has a solution. It will offer a subsidy based on income level to help people with compliant health plans to afford them. The catch is that the subsidy will be in the form of a tax credit. I'm not sure how the timing of these distributions will work. If this doesn't sound wonderful, it is because it isn't. By forcing healthy people and unhealthy people to participate in the same health plans; the prices of the plans will increase dramatically (enter subsidy). The best example of this is in the current "group" market. If you work for an employer that offers group health insurance, the premiums are based on the average age and average health of the group. As long as the group stay relatively healthy, the premiums reflect this and stay low. When just one of the employees makes a large claim on the policy, the premiums are affected in a negative way. With the new "gov't" plans, we are telling the health insurance companies that they have to create products to cover an unhealthy pool of people. All this does is guarantees high rates.
The $64,000 question is, "Who Wins"? The argument could be made that people with preexisting conditions win. The Federal Gov't wins by creating a new group of people that "need" its help. This relationship equals votes.
I chose this picture because I believe that the President looks a little worried, and he should be. This new health care law is designed to fail. It was put in place by the powers that be in order to drive healthcare costs up, and force to people to clamor for government intervention....the public option.
The better question is "Who Loses"? The answer is all of us. For every person that gets the care that they so desparately need, there will be two that do not. As costs continue to rise, it will force doctors out of the profession due to decreasing reimbursement rates and rising malpractice insurance. Less doctors = longer wait times and less qualified people to complete the procedures once you do get in. When the gov't makes the rule for the insurance companies, they also decide what types of care are covered, and who gets said care. Every major piece of legislation that comes out of Washington has unintended consequences, and this one will prove to be no different.
So who is the big winner? NOT YOU!
Opinions, thoughts and comments are always appreciated.
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