The Independent Investor: A Rough Rollout for Obamacare

Problems began on day one. Since then the controversy has escalated until just about everyone has something negative to say about the Affordable Care Act. Aside from the litany of computer glitches and misinformation that has greeted the uninsured millions who have attempted to access HealthCare.gov, there are now new questions arising over benefits and costs.

"My wife says her company's health insurance rep told employees that their premiums could go up by 35 percent next year because of Obamacare," claimed one client, who wanted to know if we should get out of the stock market before all hell broke loose.

I did some research and did find that for many of the estimated 150 million Americans who receive health care insurance as a fringe benefit may get hit with increased premiums in 2014. However, most increases will be in the 5-7 percent range (not 35 percent), which is about average since health-care costs increase by about 6 percent a year. The difference this year is that health insurance companies now have a new whipping boy to blame for these annual cost increases.

The companies are claiming that new fees and design changes to their existing plans as a result of Obamacare will cost employers and employees more than ever. How convenient, especially when none of these companies will go into detail about just how much Obamacare is costing them and us versus other reasons.

The truth is that worker contributions to health care insurance has risen by 89 percent over the last decade and employer costs have risen by 77 percent. Sure some of those increases can be laid at the doorstep of higher medical charges, but most of the increase simply reflects the fact that our workforce is getting older. The older we get, the more we need health services. Think about it, how much more time do you now spend in doctor's offices, visiting pharmacies or other medical centers. When we were younger, we paid insurance but rarely used the benefits. Now things are the other way around and hurting insurance company profit margins. Insurers don’t like it. Thus, the premium increases.

Another issue that is catching the American public by surprise is the cancellation letters many underinsured Americans are receiving from their health providers. Under Obamacare, you can still keep your old insurance as long as it provides at least minimum health care coverage. It turns out that many existing plans fail to pass muster when it comes to supplying benefits. Pundits are crying foul and blaming the Obama administration for "keeping this a secret" over the last three years. Hogwash!

The facts are that the Affordable Care Act had set a minimum level of health benefits for all Americans, which was spelled out and available for anyone who cared to check. That includes things such as emergency services, outpatient care, hospitalization, health care before and after the birth of a baby, prescription drugs, lab services, pediatric care, preventive and wellness and mental health and substance abuse services among others. If your former health insurer did not cover any of the above, ask yourself how valuable was it in the first place?

If your health care premiums need to go up because now you can go to the hospital to get your fingers sewn back on, or so you can deliver your next child, then so be it. If you genuinely don't have the money to make up the difference then the government will pay the difference under the health care act.

Amid the furor and increasingly-heated partisan debate, Republicans and even some Democrats are having second thoughts. So should we soldier through or just scrub it? Scrubbing it just returns the nation to the status quo. What's wrong with that, you may ask.

What many of us fail to realize is that taxpayers are already footing the bill for America's uninsured and under-insured. When someone with no insurance waits until their diabetes condition is life-threatening before seeking medical attention, who do you think pays for that limb amputation? When an elderly person fails to take their prescribed medication because they are underinsured, resulting in a heart attack or other critical malady, it is you, the taxpayer, who foots the bill for that hospital bed and all the other medical costs that goes with it.

As long as you and I are unwilling to allow fellow Americans to die on the streets, unassisted and unintended, we will continue to pay those costs one way or another — unless all Americans are insured and have a minimum level of health care. How hard is that to understand?

Bill Schmick is registered as an investment adviser representative with Berkshire Money Management. Bill’s forecasts and opinions are purely his own. None of the information presented here should be construed as an endorsement of BMM or a solicitation to become a client of BMM. Direct inquires to Bill at 1-888-232-6072 (toll free) or email him at Bill@afewdollarsmore.com.