Where are we headed?

All the news about raising the debt ceiling has taken the heat off ObamaCare as that train wreck continues down the tracks toward its destiny with national bankruptcy.

Recently, I read that Healthcare is projected to take up 50% of the Federal budget by the end of the decade. Holy smoke! What happens when you add Social Security into the mix?

By 2014, ObamaCare mandates each state to have a system in place offering health insurance through a series of “Exchanges”…insurance stores selling health insurance policies containing benefits demanded by the fed’s in Washington. Looks as if there will be a Plan A, Plan B, Plan C, etc. You pick your plan from the Fed’s list, then pay premiums each month to an “insurance” company offering that Plan.

I put insurance into quotation marks above because what you buy from an Exchange is no longer insurance. Instead, you will be paying your dollars to a company which must accept your application (Guaranteed Issue), pay your claims, and keep track of your records. Your premium dollars go into a pool to pay everybody else’s medical bills.

Broadly speaking, traditional Insurance Companies assume a monetary risk which would be impractical or impossible for one person to assume, assign cost to the risk assumed, and by contract guarantee to compensate the insured person if that person sustains a monetary loss resulting from a risk assumed by the insurance company.

Insurance companies’ engineers are called Actuaries…PhD number crunchers, and data miners. They set the price for the products. To stay in business, insurance companies must collect enough dollars to pay for claims and administration, including a ton of taxes, plus some profits for their owners. (Figure about 5% gross profit for most.)

As ObamaCare mandates that all health insurance companies issue health insurance to all comers starting in 2014, the actuaries can no longer set higher premiums for poor risks. On the flip side, they can no longer offer lower premium rates to the majority good risks like you. Instead they must pour everyone into the same actuarial stew pot, then figure out how much to charge for your coverage.

How will they do that?…know what a WAG is? How about a SWAG? Well, a WAG is a Wild Ass Guess, and a SWAG is a Systematic Wild Ass Guess. You and I take WAG’s all the time, while professional number crunchers take SWAG’s, and pick up big bucks for doing so. Further complicating matters is the fact that 2014 health insurance is guaranteed issue, with full coverage for “pre-existing conditions”

While we are expected to buy 2014 health insurance or pay a tax penalty for failing to do so, the tax penalty will be much less than premiums required to purchase the insurance…so guess who is going to buy health insurance in 2014? That’s Right! Sick people with pre-existing conditions, while most will just pay the fine each year…until they get the bad diagnosis from their doc. Then they will drop by their local state exchange and pick up some health insurance….and what effect do you suppose that will have on the long term cost of health insurance? Can you spell, The Sky is Not the Limit?

But, not to worry. ObamaCare provides premium assistance to individuals earning up to 400% (that’s almost $90,000 for a family of four) of the federal poverty line…Yep, your income tax dollars will be going to your boss to help pay his health insurance premiums each month…but, isn’t that the way Socialism is supposed to work?

November 2012, offered us an opportunity to vote in a national referrendum for maybe the first time since our founding as a Republic of soverign states. The US is now at a tipping point. The results of November’s election will inpact our country for the next 100 years.