Obamacare Is A Net Positive For Early Retirees And The Underemployed
We appreciate our health the most when we are sick. I certainly appreciate my health now because I’ve currently got a sore throat from probably too much sailing in the Bay this past weekend. The wind regularly picks up to 25 mph and makes the temperature on the water feel like 50 degrees instead of 70-80 degrees.
The Affordable Care Act (Obamacare) goes into effect October 1, 2013 if Republicans in the House fail to block the movement. Republicans will probably fail since Obamacare has already been given a thumbs up by the Supreme Court, but hold on for some potentially massive pain as I indicated in my newsletter the other week, recommending readers reduce stock positions and buy bonds when the 10-year yield was at 2.85%-2.9%.
As someone who retired 31 years before being able to receive Medicare at the age of 65, you might think I’m worried about health insurance. Health related problems is the number one reason for bankruptcies in America after all. But I wrote a thorough post in the spring of 2013 entitled, “Cheap Health Insurance Options For The Unemployed, Self-Employed, Or Early Retiree” that goes on to explain our options: COBRA, Spousal Health Insurance, Parental Health Insurance, and eHealthInsurance.com, the largest online market place for health insurance plans based right here in the Bay Area.
I’m as skeptical about the government as anyone, but now that Obamacare is going into effect, the options for heathcare are theoretically even better. For those who are seeking financial independence, who are early retirees, or who are just trying to save money to get by, let me argue why Obamacare is a net positive for America.
HEALTH CARE FOR ALL
The fundamental premise for the Affordable Care Act is that no person should suffer catastrophic financial loss or die just because he or she cannot afford healthcare. Genetic diseases and car accidents don’t discriminate between rich or poor. Those with pre-existing medical conditions will now be able to get coverage. Young adults are able to stay on their parent’s insurance plan through their 26th birthday. Insurance companies cover preventative care such as flu shots, physicals, mammograms, and vaccines. These are all good things.
I am 100% behind health insurance for all even if it costs me more to help subsidize someone else. Unlike trying harder to make more money, it’s very difficult to try harder to fight a drunk driver who runs you off the road and breaks your legs.
The main concerns about the Affordable Care Act are several fold: 1) Rising premium costs for healthy individuals to support less healthy individuals, 2) Overcrowding and longer wait times, and 3) A distaste for the government forcing individuals to get insurance even if they don’t want insurance.
LOOK ON THE BRIGHT SIDE
1) Eat More Of What We Love: I’ve got a safety net to eat more unhealthy food I love such as steak, lemon meringue pie, chocolate fudge sundaes and cheeseburgers. I also won’t feel as bad for not working out 3-4X a week anymore. For the past 12 years since leaving NYC, I’ve been trying to stay in shape because the stress of working on Wall St. was already high enough. I needed to be in the best shape physically and mentally to do my job. Now that I’ve got Obamacare, I can definitely let myself go more. The bonus is that maybe I get to save money on premiums because I slide into the average fitness category, or I get more of my money’s worth because I’ll be seeing the doctor more for checkups and drugs.
2) The Market Is Efficient. People are fooling themselves if they think people who really need or want the best healthcare are going to accept overcrowding. The free market will kick in where doctors will charge more for concierge service to meet demand for better care. My own doctor I’ve seen for 13 years started his concierge service where he provides 24/7 consultation (gives members his private mobile phone number for off hours) and weekend visitations (normally shut on the weekends) for an extra $1,500 a year. Meanwhile, it’s better to wait to see a doctor if you have a problem than not be able to see the doctor at all for those who were once without health insurance.
3) The Government Already Controls Everything. Paying monthly health insurance premiums when you are just trying to make ends meet is painful. I have numerous friends in the food, art and online business industries who don’t have health insurance because they are young, feel healthy, and don’t want to pay an extra $200-$300 a month since they are making less than $2,000 a month. The problem is that it is vital for all of us to at least get disaster prevention insurance because these are the people who enter an unending cycle of poverty if something bad happens. The Affordable Care Act offers discounted premiums for individuals making less than $28,725 a year and families of eight (!) or less who make under $99,075 a year. The government already throws us in jail if we don’t pay tax rates that are unilaterally decided by them, so we might as well pay for something that might save us from poverty.
You can choose to look at the negatives of Obamacare, or you can choose to embrace the inevitability. You’ll be much happier in the long run if you do because fighting omnipotence will only get you squashed.
NEW HEALTH EXCHANGES STARTING: BRONZE, SILVER, GOLD, PLATINUM
Americans under 65 can now elect to buy their health insurance through health exchanges online in their state come October 1, 2013 (see healthcare.gov). Californians, for example, can get a Bronze monthly plan for $278/month, while folks in Wyoming have to pay the most at around $425/month according to the US Department of Health And Human Services. If you happen to live in Kansas, Oklahoma, Minnesota, Tennessee or Maryland, you’re paying less than $200/month on average per person. Not bad at all!
But again, if you are one of the millions of Americans who never had to pay health insurance premiums because you elected not to have health insurance, you might not necessarily be happy now that health insurance is the law. At least you’re getting something, unlike taxes which go to a black hole that funds wars and shady infrastructure projects.
Economics-wise, we are theoretically improving the fiscal health of our health care system by forcing the uninsured to pay health insurance premiums. 30 million Americans paying $200 a month equals an extra $72 billion dollars a year which can be used to cover emergency care that’s already being provided. However, who knows how much more abuse or moral health hazards will result from everybody now having more insurance.
THE MARKET WILL SMOOTH OUT THE WRINKLES OF OBAMACARE
It’s always scary to have the government mandate and meddle in our lives, especially when it comes to our health. Their intentions may be perfectly good, but they always find a way to mess things up due to bureaucracy, greed, and red-tape. A great example is the government regulating Wall St bonuses. By limiting the amount of bonus money that could be paid out in cash, Wall St. simply raised base salaries by 70-100%!
I’m scared of the inefficiencies of Obamacare, but I believe the free market will help blunt inevitable problems. Health insurance companies will have to compete on price and quality with these new exchanges or die. The more competition there is, the lower the price and better the service all else being equal. If people want to pay for better access and service, then there will be options that allow people to pay more and vice versa. If competition gets too fierce, insurance companies will go out of business and new subsidies will come into play.
Just look at “Communist” China. The free markets have overwhelmingly crushed the ideology of Communism by producing the fastest number of new millionaires and billionaires in the world. I’ve been to China over a dozen times since 1997 and I can tell you first hand the wealthy are living large. We cannot squash the desire for more, nor can we eradicate rational people. Have faith things will work out for the better.
You should shop around for tailored health insurance quotes for yourself or family by visiting eHealthInsurance.com. They started in 1997 and partner with over 180 health insurance companies operating in all 50 states. Given they are the largest online health insurance provider, they have the most competitive rates. The Affordable Care Act has proven to be a debacle with higher rates than expected and a very cumbersome application process. The private sector is the more efficient way to go in my opinion.