Police State Health Care: The Cost of Non-Compliance

(Source: Deesillustration.com)

Editor’s note:  A police state is a “state in which the government exercises rigid and repressive controls over the social, economic, and political life of the population.”  The micromanagement and control over entire industries — such as health care — is categorically part of the development of a police state.  The ongoing market manipulations and monopolistic regulations have had a variety of consequences on economic and social freedoms.  Some of the economic consequences will be examined here.


(Source: Deesillustration.com)
(Source: Deesillustration.com)

The Affordable Care Act (also known as Obamacare) was passed in 2010 with the promise of lowering health care costs.  Capitalizing on the public’s dismay over the increasingly expensive health care, Democrats and insurance lobbyists came together to produce a startling example of corporate cronyism.  As we illustrated in the first article in this series, Health Care: 100 Years of Creeping Government Control, decreasing the supply and increasing the demand for a product — such as health care — will never lower its costs.  And it won’t in the case of the “Affordable” Care Act.

There is still a lot of misinformation about what the ACA includes; understandably so considering that the legislation is thousands of pages long.   To cut through the misinformation, we’ve pieced together a much-needed breakdown of the effects of the ACA on private insurance plans and the upcoming penalties for non-compliance.

* * * * *

A GREAT DECEPTION

Politicians made a lot of promises about their new insurance scheme.  One such promise included:

“If you like your doctor, you will be able to keep your doctor. Period. If you like your health care plan, you will be able to keep your health care plan. Period. No one will take it away. No matter what.”

Barack Obama

This claim was widely promoted, not just by the president, but by the Speaker of the House among many others.

“Keep your doctor, and your current plan, if you like them.”

Nancy Pelosi

These claims were made to garner the public’s acceptance of the hasty passage of the Affordable Care Act.  But they were lies all along.  It is simply not true that everyone is allowed to keep their current plan (or lack thereof).  Thousands across the nation are already losing their current plans thanks to the ACA.  Some are offered comparable (but more expensive) plans.  Some are written off entirely and told to find coverage elsewhere.

ACA registration began October 1st, and already the reports pour in about cancellation notices and rate hikes.

THE TRUTH

The truth is far from what the American people were sold.  This is the cold, hard reality about your chances of keeping your current plan:

Essential health benefits must include items and services within at least the following 10 categories: ambulatory patient services; emergency services; hospitalization; maternity and newborn care; mental health and substance use disorder services, including behavioral health treatment; prescription drugs; rehabilitative and habilitative services and devices; laboratory services; preventive and wellness services and chronic disease management; and pediatric services, including oral and vision care.

  • If your plan does not provide these benefits, it will probably be banned due to extremely restrictive qualifying criteria.

So what happens to the plans that don’t meet the new minimum standards? They will likely disappear. A handful of existing plans will be grandfathered in, but the qualifying criteria for that is hard to meet: Members have to have been enrolled in the plan before the ACA passed in 2010, and the plan has to have maintained fairly steady co-pay, deductible and coverage rates until now.

  • If your current plan does provide these benefits, the premiums will almost certainly increase substantially.

Of the 51 states studied, all experienced health insurance rate increases, with 44 of those states experiencing triple digit percentage increases in premiums for the lowest-priced coverage. Pre-ACA premiums average $62.00 monthly, while post-ACA premiums average $187.08 per month, a $125.08, or 202 percent, increase. The average percent change between 2013 and 2014 minimum level plan monthly premiums is 260 percent, reflecting a nearly 3 to 1 ratio between the two sets of premiums.

  • If, by chance, your plan is not cancelled but does not offer the “essential health benefits”, you will still be required to pay a stiff tax penalty in addition to the premiums that you pay for the plan that you are graciously allowed to ‘keep’.
  • As enforcement of the ACA expands, we can expect more and more existing plans to be changed or eliminated.

The data shows that there will be a near complete transformation of the individual and family health insurance market starting in 2014. Less than 2% of the existing health plans in the individual market today provide all the Essential Health Benefits required under the Affordable Care Act (ACA).

  • If your health care is sought through means other than insurance — such as self-treatment or paying cash for medical consultation — the federal government will now impose annual fines on you.  Uninsured individuals and families will face stiff penalties for trying to opt out and be left alone.

 

THE COST OF NON-COMPLIANCE

If you like your health plan, you will be able to keep your health plan.  Period.  Maybe.  Probably not.  But if you keep it, you will be required to pay a stiff fine.  Sorry, did I forget to mention that part in my speech?

Another widely distributed misconception is the idea that it ‘only’ costs $95 annually to refuse to comply.  It pops up far too often in discussions pertaining to the ACA.

And again:

These sort of comments reflect a grave misunderstanding of the penalties.  The ACA designed these penalties to increase year-to-year, forcing more and more people into unwanted and unaffordable insurance plans.  This oft-touted $95.00 penalty is the bare minimum, only applying to single individuals earning a small annual income… and only valid in the first year.

Here is a much-needed breakdown of the upcoming incremental fine schedule.  Keep in mind: this is what it costs to have no coverage!

2014 PENALTIES:

Uninsured individuals will be penalized 1% of their annual income above the minimum tax threshold — no less than $95/year.

Uninsured families will be penalized at one of the following rates (whichever is greater):

  • $95 per adult and $47.50 per child, capped at $285 per family, or
  • 1% of their annual income above the minimum tax threshold.

2015 PENALTIES:

Uninsured individuals will be penalized 2% of their annual income above the minimum tax threshold — no less than $325/year.

Uninsured families will be penalized at one of the following rates (whichever is greater):

  • $325 per adult and $162.50 per child, capped at $975 per family, or
  • 2% of their annual income above the minimum tax threshold.

2016 PENALTIES:

Uninsured individuals will be penalized 2.5% of their annual income above the minimum tax threshold — no less than $695/year.

Uninsured families will be penalized at one of the following rates (whichever is greater):

  • $695 per adult and $347.50 per child, capped at $2085 per family, or
  • 2.5% of their annual income above the minimum tax threshold.

 

Source: CNN Money

 

PENALTY CAVEATS

  • After 2016, rates will be increased proportionally with consumer inflation rates.
  • Individuals are exempt if the cost of the cheapest bronze plan on their state exchange exceeds 8% of their income.
  • The total fine will be capped at the national average premium price of a bronze plan on the state exchanges.

Sources:  (1) Countdown to Obamacare: The Penalties for Uninsured Americans, (2) What to know if you opt out of buying health insurance

 

A REAL-WORLD EXAMPLE

A friend of mine recently said,

We received a letter yesterday from our insurance company stating that our current insurance plan was not Obama approved and would be canceled the first of the year. So I go online to look at the government rates and plans only to find the cheapest plan is double what we are currently paying and has a higher deductible.

How many families like ours are now going to be forced to go without insurance and pay a penalty to the government for it?

This is not a wealthy family.  This is a hard-working small business owner, employing 15 people while raising 4 kids.  They purchased the best health coverage that they could afford (a plan with high deductibles and limited coverage) and budgeted cash payments for the expenses that wouldn’t be covered by it.  They liked their plan.  They will not be able to keep it, nor can they responsibly afford a plan that costs twice as much as their previous plan.

By 2016, they will face a minimum tax penalty of $2,085 in addition to the financial burden of losing what coverage they were offered by their previous plan.  This penalty will increase each year in accordance with consumer inflation.

This family is a prime example of the victimization that is taking place at the hands of the federal government.  Small business owners and the working class, the very demographic that this legislation was supposed to help, are hit the hardest by it.

Don’t believe for a moment that ACA proponents in Washington are surprised by this.  Anyone with an average intelligence quotient and freshman knowledge of economics could recognize that this plan would be harmful to American families.   This dubious realization should tell you a lot about those who thrust the ACA on us.  Their agenda is not about making our lives better.

 

{ SUPPORT POLICE STATE USA }


2 Comments on Police State Health Care: The Cost of Non-Compliance

  1. what is this mean?

    “51 states studied, all experienced health insurance rate increases, with 44 of those states experiencing triple digit percentage increases in premiums for the lowest-priced coverage”

    what is the 51st one?

    and this legislation is just another way to enslave the citizens.

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