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Non-enrollment, reducing or dropping health insurance will be the silent dagger to Obamacare

How the people, doctors, and employers are going to nuke Obamacare, no politicians required

I’ve been pondering writing this post for awhile.  As you know, the Obama administration has been on a heavy recruiting mission getting celebrities and organizations like the NFL to promote enrollment of health insurance to young people.  It is common knowledge that the Obama Administration needs young people enrolling in health insurance that those people feel they don’t really need to keep health premiums from becoming an epic payment shock to voters who already have health insurance.

Americans are still dead set against Obamacare solidly.  They don’t want it.  I don’t believe the Obama administration is just going to have a problem with youths enrolling.  There are going to be a a significant portion of conservatives and libertarians of all ages who will likely either drop or greatly reduce the coverage they pay for as a form of protest when Obamacare goes into effect January 2014 or drop their coverage as their premiums skyrocket.  Just a 5% drop off of people whom invest in health insurance would be devastating to both the health insurance industry and in particular, President Obama.   To be frank, I actually see a lot more than 5% of the people doing this as the predictable upward death spiral of insurance premiums happen. Here’s how it will happen.

Employers Will Offer Skinny Insurance Coverage

When I saw this the first time, I laughed.  Never underestimate the ingenuity of Americans who believe their liberty is being taken away.  What makes this particularly devastating is that people young and old could purchase this skinny coverage just to avoid paying the tax penalty.

Some companies are avoiding Obamacare penalties by offering “skinny” insurance plans that provide employees with minimum coverage such as preventive care but little else, including benefits to help cover hospitals stays.

Minimum coverage qualifies as acceptable under the new healthcare-reform law, so benefit advisers and insurance brokers are pitching minimum plans nationally, reports the Wall Street Journal.

Employers are recognizing they can avoid a $2,000-per-worker penalty by providing such policies, even though the plans often don’t cover basics such as surgery, X-rays, or prenatal care, let alone hospitalization.

The employers still could face penalties, but they expect them to be less than the the $2,000 per worker for opting out of Obamacare. As a result, the Journal reported, more companies are seeking minimum-coverage plans and creating what amounts to a new industry of basic-insurance brokers and benefit administrators pushing the plans to clients.

Avik Roy goes into this more deeply:

All of this is the context for an article that appeared yesterday in the Wall Street Journal, highlighting the emerging recognition of this method for avoiding the employer mandate’s strong penalty. Reporters Christopher Weaver and Anna Wilde Mathews confirmed with federal officials that this strategy is a viable one.

Nonetheless, Obamacare’s designers expressed surprise that employers would do such a thing. “Our expectation was that employers would offer high quality insurance,” said Robert Kocher, a former Obama health care adviser. It wouldn’t be the first time that the law’s authors didn’t recognize how economic incentives actually work.

Weaver and Mathews of the Journal report that Bill Miller Bar-B-Q, an excellent fast-food chain in San Antonio, will offer just such a skinny plan to avoid the strong penalty. The plan will cover preventive services, doctors’ visits and generic drugs, but not surgeries nor hospital stays, and cost less than $600 a year

This will do two things.  One, it will make health insurance premiums skyrocket even more because of the lesser premiums being paid in to insurance companies.  Two, it will greatly starve Obamacare of the funding mechanism it desperately needs which is the penalties collected from both employers and individuals.  Kocher’s reaction to this development in that article is priceless.  Worse yet, employers of over 50 people will not start paying any penalties until 2015.

Doctors Convert To Take Cash Only And Stop Accepting Health Insurance As A Form Of Payment For Service

This one is something that people are not talking about but is a health insurance company’s worst nightmare for a host of reasons.  Doctors have to have a large number of people to handle insurance claims by themselves and accounts for a large portion of their overhead expense.  It also has to scare big government politicians to death as well because it reduces dependency on the government and lowers prices for medical services.  Take this example:

In April, Dr. Michael Ciampi stopped accepting all forms of insurance, including Medicare and Medicaid, and started charging for his services a la carte.

“We’re asking people to pay at the time of service just like you would pay at your garage or your lawyer or your plumber,” Dr. Michael Ciampi told the Bangor Daily News’ Jackie Farwell. ”Now, I work for patients. I don’t work for the government and I don’t work for insurance companies.”…

Since the switch, Ciampi says he has been able to slash his prices by half in some cases, just from his overhead savings alone. But he’s lost patients in droves, with several hundred of Ciampi’s 2,000 patients ditching him altogether.

Nashville, Tenn.-based Dr. Robert Tomsett had similar results after converting to a no-insurance model at his practice in 2011. Unfortunately, his staff paid the price.

“We did have to let some of the existing staff go as our patient count has dropped since initiating our transition to self-pay,” Tomsett wrote. “This is typical from accounts by others around the country that have converted their practices, some as much as a 75% drop in patient count.”

Six weeks into his no-insurance model, Tomsett saw only 75 patients and managed to break even.

“I am able to spend more time with each patient than any other time in my career,” he wrote.

I would recommend reading that whole article.  There is a lot of fascinating stuff there.  If doctors start doing this on a bigger scale, oh boy.  Health insurance companies will have a harder time holding onto policyholders who have to drive 30+ miles to see a physician who accepts health insurance.  Empowerment through independence of government mandated health insurance….AWESOME.  I can see the overcrowded and understaffed hospitals right now that would have to handle the influx of denied patients of doctors who no longer accept insurance as a form of payment.
Identity Theft/Fraud Risk in enrolling in the healthcare exchanges
I wouldn’t trust the IT infrastructure of the health care exchanges that are being set up under Obamacare the least bit with my personal information.  Would you apply for credit or insurance with a company that had IT security holes like this?

The federal government is months behind in testing data security for the main pillar of Obamacare: allowing Americans to buy health insurance on state exchanges due to open by October 1

The missed deadlines have pushed the government’s decision on whether information technology security is up to snuff to exactly one day before that crucial date, the Department of Health and Human Services’ inspector general said in a report.

As a result, experts say, the exchanges might open with security flaws or, possibly but less likely, be delayed.

“They’ve removed their margin for error,” said Deven McGraw, director of the health privacy project at the non-profit Center for Democracy & Technology. “There is huge pressure to get (the exchanges) up and running on time, but if there is a security incident they are done. It would be a complete disaster from a PR viewpoint.”

The end result of Obamacare is predictable.  Lost jobs, higher premiums, more national debt added by funding a legislative catastrophe.  The higher the premiums rise, the louder the cry will get to repeal it.  Not only will it be economical for Americans to not enroll, drop, or reduce their health coverage but also their personal information will not be compromised.  Those people who don’t enroll will hold out until Obamacare is repealed, paying the penalty or better yet, getting skinny coverage to avoid paying the individual penalty.  A final word to those thinking Obamacare is a way to a single payer system (public option).  The only way I see that happening is if the Democrats have full control of Congress with a supermajority in the Senate.  I just don’t see that happening anytime soon considering the Democrats, without the aid of single GOP vote, pushed this legislation through and will be totally responsible for the mess that results from Obamacare.  This is not going to be pretty.

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