Obamacare will hurt North Carolina’s poor
April 24, 2013 5 Comments
Obamacare was sold to the American people as a vehicle toward attaining the goal of “universal coverage”. The key selling points were that many Americans are without health insurance because they cannot afford it; and that the uninsured are at risk of being thrown into abject poverty once they must enter the medical system. Obamacare was also sold as a humanistic endeavor to assist those who need medical care.
One would ordinarily think that such a program would be very good for the poor. However, it turns out that North Carolina’s poor (i.e., the working class and lower middle class) will not fare very well under Obamacare. In fact, the true story of Obamacare’s impact on these groups is fairly shocking. Consider the following:
1. Those with little disposable income will face a de facto pay cut because of the high cost of insurance. Indeed, it has been estimated that those with an income greater than $45,000 per year will be tempted to forego coverage because paying the tax penalty will be more attractive.
2. The cost of using insurance policies mandated under Obamacare will be expensive because of high co-pays and deductibles. It appears the Obama administration is having to jack up the co-pays and deductibles in order to keep the insurance premiums from skyrocketing out of sight. But many among us will have difficulty paying these co-pays and deductibles after having to pay the high insurance premiums. The cheapest insurance plans under Obamacare will be the most expensive to use.
3. Many will be stuck with an unexpected year-end tax liability because the subsidies granted will be based on the previous year’s income. This will have to be settled at tax time if the subsidy turned out to be excessive. Those with the least resources will have the most difficulty facing this tax obligation. This phenomenon alone might make some people hesitant to sign up for insurance.
4. The high cost of insurance might cause health and safety issues because it might hinder the ability to pay for more fundamental necessities of life– for instance, the ability to buy sufficient food.
5. A “glitch” in the law recently discovered will limit the ability of those with employer-sponsored insurance to afford family coverage.
6. Unemployed individuals who secure employment might have to pay back all or part of the subsidy they had previously received.
7. Many will be subject to paying a tax penalty if they do not purchase insurance.
8. Those who apply for insurance in the federal exchange might be placed automatically on Medicaid if they qualify. There will apparently be no other option. In some states, those who apply for other social service benefits will also be placed on Medicaid automatically. And if they do not accept the Medicaid, they will have to pay the tax penalty for being uninsured.
9. Those older than age 55 on Medicaid are subject to having the state raid their estate to recover monies expended. This means any heirs, who might also be poor, would potentially lose their opportunity for inheritance. This is another means of pulling family wealth away from those at the lower rungs of the socioeconomic scale. And remember– these folks will be automatically enlisted in Medicaid, thereby placing their estates at risk of being raided.
10. Insurance premiums will be at risk of increasing significantly every year; and those with limited resources will be forced to accept the premium increases– or pay the tax penalty.
11. Doctors will be incentivized to reject the toughest cases– which are overrepresented among those who have least. This will potentially result in a denial of care to some in the lower classes who need it– even though they have coverage.
12. In rural areas, there might be few if any doctors participating in the limited number of the exchange’s insurance plans serving the area. That will potentially represent a major barrier to obtaining care for many who have few resources. Similarly, certain geographic areas might have few providers, if any, participating with Medicaid– particularly if reimbursements are too low.
13. The Obama administration is now embarking on a PR campaign to get people to sign up. But that will victimize many among the poor, the working class and the lower middle class because of the various reasons described above. Many will be unaware of what they will be facing when they enter into these arrangements.
14. Increasing numbers of employers that offer “good insurance” will dump their employees on the insurance exchange where they might face greater costs.
15. Young adults, who often have lower incomes and fewer assets than older adults, will have disproportionately higher premiums because of Obamacare.
Much of the information in this post is derived from a major article published by Paul Craig Roberts. Roberts is a southern economist who served as an Assistant Secretary of the Treasury during the Reagan administration. The article is found here:
The information contained within this article should be very sobering for those who thought Obamacare was going to be grand slam for those among us who have less. Many of North Carolina’s least fortunate citizens and families have no idea what awaits them.
Dr. Joe Guarino is a Guardian columnist.