US Health Care Crisis – Socialized Medicine?

Obamacare, or the Affordable Care Act is anything but – affordable.

Another year and another hike in our out of pocket will take effect November 1st. What kind of increase? A mere 42.5%…cough – wheeze, for me!

While Obama touts that millions more are now covered, whoopdeedo what he doesn’t say is that it doesn’t really matter because deductibles have gone so high no one can use the insurance unless it is for catastrophic purposes. Remember the good ole days when deductibles were $500? Well those good ole days were just ten years ago. And while my individual deductible is now $5700, it is better than what the mandated younger generation is forced to buy with deductibles or max-out-of-pocket as high as $10,000 and $12,600. Which is about $12,599 more than they have in savings.

Even the socialist medicine provider, Kaiser, has followed suit and ramped up its out of pocket $$$$. While the insurer has a plan with no deductible, it has a co-insurance of 30% up to the max out of pocket – $12,600 per person, hello that’s worse than a deductible. But at least their out of network is non-existent, while others cite max as high as $25,400 per person. So if something happens to you in another state, or out of your control to pick and choose because you are say – unconscious, you are royally in the hospital dog-house.

But that’s only the beginning. The other bite is the insurers closing their doors completely. Kentucky’s Health Cooperative is going out of business leaving 51,000 without insurance. Health Republic Insurance of New York went out of business dropping 150,000. CoOpportunity Health in Iowa and Nebraska dropped out. Louisianna Health Coop and Nevada Health dropped out. And by drop-out, what that means is belly up, kaput, nilch, nada, bankrupt! Lost jobs. Poof! Why? Because the money promised them in subsidies from the Federal government never appeared. Instead they were given 10cents on the dollar of promised $$, and they couldn’t make it work.

WINHealth in Wyoming is going nada. As is Colorado’s nonprofit Coop and Oregon’s as well. Humana was recently gorged by Aetna after Coventry Health went into the Aetna pool. Aetna and Humana both have a one star rating when I looked them up, so they should be a great match. Cigna and Anthem are proposing a merger. Consumer Affairs rated Cigna and Anthem – one star. So much for quality of care. But these companies aren’t alone. United Health got a one star. AARP Health got a one star rating.

And while the companies have the audacity to state that such mergers will offer customers more affordable care, I have yet to see or hear of one company lowering their premium or deductible. Ever.

In 2014, according to the IRS, some 7.5 million individuals paid the annual fine rather than get health insurance. The fine was the greater of 1% of household income or $285 for a family. But that is far less than the average cost of health insurance which runs more to the tune of 9%-10% of wages. According to the CDC, there are still 35.7 million uninsured. So if only 7.5 of them paid the fine, that means 28.2 million – didn’t.  Why?

Well, then there are hardship exemptions that qualify you to NOT pay the fee/penalty, including; death of a family member, homelessness (do they file tax returns?), victim of domestic violence (that would account for 12 million per year), facing eviction or foreclosure (Foreclosures in 2014 were 1.1 million), received a shutoff notice from a utility company, experienced a fire, flood or other natural disaster, filed for bankruptcy (just under 1 million in 2014), you had substantial medical debt, increased expenses due to caring for an ill, aged, or disabled family member, and here’s the best – your insurance plan was canceled and you just don’t feel you can afford another one.  BINGO!

Is this the prelude to socialized medicine?

In 2014, 24% of the federal budget was allocated to pay for healthcare. Yet in countries with socialized medicine, such as France, Germany, and the UK, healthcare spending amounts to just 16% to 18% of the total budget. How is that possible and covers EVERYONE?

The number of people in the US covered by Medicare and Medicaid is now about 93 million, 22% of the population. If the Federal Budget is 3.8 trillion in 2015 and 24% goes to healthcare thats – $912 billion. If we were to socialize 100% of the population which stands at 319 million healthcare costs would be $3.13 trillion or 82% of the budget. To cover the additional $2.1 trillion someone has to pay. Given 45% of the population even pays taxes, that would mean 143.5 million people would cover the cost of healthcare, amounting to a per person annual average cost – $21,800. Of course a sliding scale would have to be introduced because only 26.6% of wage earners make over $50,000, only 7.4% of US wage earners make over $100,000, and 1% make over $250,000. At current costs, there simply isn’t enough earning power to go around. In addition, the minute, the second those top wage earners get whiff, money will vanish – finding rest in the Bahamas, Morocco, or wherever it can flee and find less taxing power.

In France, the cost per capita of healthcare is roughly $4900. That’s 22% of the cost in the US. So, is the solution to socialize, or is it to cut costs?

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