The real costs of Obamacare, dollars, taxes, gains &losses

Published 2:46 pm Friday, May 21, 2010

Well, Obamacare is now the law of the land. While some people are pleased, a majority of Americans are not happy at all. The problem is that not many people know whats in the law, but like it or hate some found one of two things they could really get behind and support.

One of the better aspects of Obamacare is that screenings for colon, prostate and breast cancer will be free to beneficiaries. Another is that preexisting conditions will not prevent you from being able to purchase health insurance as of 2014, and that same year, limits on coverage will be eliminated. The downside of this is that insuring everyone equally, regardless of health conditions will be very expensive. It will also all but eliminate the underlying reason for the existence of health insurance companies in their present business model and turn them into government agencies similar to Fannie Mae and Freddie Mac, and we all know how well that worked out for the country, dont we?

Under Obamacare, most Americans will be required by law to have health insurance by 2014 or pay a penalty. This covers people of all ages, but those of us not on Medicare and without health insurance will be most impacted. The initial fines, oops, penalties start at $95 per person or up to 1% of your annual income, whichever is greater, and will increase yearly to $695 per person per year or 2.5% of income by 2016. If theres any good news in this draconian feature, its that the family limit on the penalty is $2,085. Some people will be exempt for reasons of financial hardship, religious beliefs or if they happen to be American Indians. Everyone else gets to play or pay under this new law.

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There are provisions for Medicaid eligibility and some subsidies to help those who arent quite poor enough to meet Federal guidelines, but the process to apply and qualify requires a great deal of time, paperwork and layers of bureaucracy to be eligible for the new state-based insurance exchanges that dont yet exist, but are scheduled to begin operation in 2014.

There are also subsidies for individuals and families above the poverty level up to an income level of $88,200 for a family of four. Wow, were now considered impoverished because we make just under $100,000 a year what a country!

Without going into great detail, there is some help coming to mitigate prescription drug costs. Seniors will benefit from the gradual elimination of the Part D gap known as the Donut Hole in the Medicare Drug program. This year that will be in the form of a check for $250 for every senior who is affected by the gap, and complete elimination of the donut hole by the year 2020, all as an entitlement that will cost us billions of dollars over the next 10-years.

Another casualty of Obamacare will come to the 10-million Americans who have HMO plans called Medicare Advantage. As of 2011, those extra benefits you received like free eyeglasses, hearing aids and gym memberships will either be eliminated or cut, and premiums may go up.

There are a lot of questions as to whether or not this legislation will raise premiums and your taxes. Costs not included in the Obamacare bill that would have forced it well over $1-trillion mark include the approximate $300 billion doctor fix which on one hand lowers Medicare payments to doctors and under another piece of legislation, H.R. 3961 raises their reimbursement even higher. And that assumes that the 21% cuts to Medicare reimbursements will in fact be made this year plus an additional reduction next year. This is a reduction that has never been approved in the past, and probably wont pass this time either. But the fix was part of the smoke and mirrors parlor trick.

The real fallout from Obamacare if it is not dramatically modified will be that more doctors will refuse to take new Medicare patients in the future. Many are threatening to retire from private practice, leaving already hard hit rural areas without general physicians and even fewer specialties such as brain surgery due to outrageously high liability insurance rates.

With 30-million more people added to the roles of the insured, the current shortage of doctors plus the loss of those who will retire or close their practices, we can be sure that Obamacare will also bring us a few other unintended consequences. These will include: increased malpractice lawsuits, decreased time spent with each patient, poorer outcomes for patients due to patient loads and reduced face-time with doctors, rationing for seniors, and curtailment of certain procedures for the oldest and fastest growing segment of our population. This is the result of reduced reimbursements and the implementation of outcome-based payment where dollars invested in older seniors cannot be justified under the Obamacare plan, because the care is seen as too costly with too limited a benefit for the return on the investment. That denial will become the defacto death panels that Obama denied would be part of his plan. But reality is, no medical care will lead to earlier deaths among our elderly.

There it is. There are some good things in Obamacare, and some enormous problems too and we didnt even mention the Louisiana Purchase or Cornhusker Kickback. You do your own homework and learn whats in this legislation. What you once celebrated you may no longer support, and if you opposed its passage, you may feel fully vindicated for having done so.

Ron Kauffman is a Certified Senior Advisor, radio talk show host and an expert on issues of aging and caregiving. He is the author of Caring for a Loved One with Alzheimers Disease, available at, where you can also hear his weekly Podcasts. He can be reached at 561-626-4481 or by email at