So, my thoughts on the Affordable Care Act, ACA, have always been that we needed to legislate that all individuals have health insurance here in the US, but that the law as written has lots of problems... including saddling employers with even more costs and administrative fees than before. I've taken a bit of a wait and see attitude, but my beliefs are being borne out...
On October 2, 2013 at 02:12, bcf1963 said...
The thought process behind Obamacare, is that because everyone will be covered, the total cost of health care should decline. Previously those of us with health care were paying through inflated procedure costs to cover those without care.
The problem, is that this system is as clear as the Tax Code, and will be poorly administrated, just like every other government program. It will be rife with abuse and waste. This will then result in us paying more than we do today.
This isn't lost on the private insurers. This is part of why premiums are rising. The doctors are also in a state of panic, as they see costs will start being dictated to them, and more "management" of patient treatment will result in higher costs, and they are raising prices in anticipation. It's just like big oil. It takes years for prices of gas to decline, but a refinery goes off line, and prices jump overnight, long before there is any shortage in supply.
Even if you believe this will work, it is going to get more expensive, before it gets better.
So today my workplace announced the changes for this year. I've been dreading this day, as I've been expecting increases.
So, the news is:
"There is a 6% increase in plan cost this year, which includes a 1.25% increase from fees associated with the Affordable Care Act. This means your paycheck deductions will increase by 6%, except for those with the High Deductible Health Plan. Those with the HDHP will see an increase in their deductible amount. We understand that cost increases are not ideal. This cost increase is at the low end of market forecasts of 6-9%. Even with these increases, the total out-of-pocket cost each year for the average employee compares very favorably to the average annual cost paid by employees at other leading U.S. companies. The average ?? employee pays about $3,000 a year in total costs compared to $4,500 paid by employees at other companies*.(*18th Annual Towers Watson/National Business Group on Health: 2012 “Employer Survey on Purchasing Value in Health Care.”)"
This is a huge corporation, with over 100,000 employees. They've provided great healthcare for their employees for years, and they are getting forced to pay a bunch of stupid ACA fees, even though their coverage is basically self insured, and the company simply pays to have the plan managed and run. Note that in addition to the fees associated with ACA, there is a sizeable increase. This is due to a run-up in costs, as I've seen myself that doctors and hospitals have increased their rates over the last year, because they know how the ACA works. It charges based on average rates in an area, so the doctors have all decided to raise rates due to fear of red tape and bureaucracy.
So, the first portion of my fears have been ratified. In the very least, in the short term, our medical costs have gone up. So my fear that things will get worse before any possibly of improvement, seems correct.
On the administration front, the websites have shown how well we are likely to expect this to get run. It seems the majority of the sites were simply not well tested, and are broken on day one. Second fear is well on it's way to being proven correct.
If this all results in things getting better for the majority in the long run, that is great. But this isn't what I expect. I expect this to be poorly handled more than it is well handled.
As an example, I've recently been dealing with the IRS. One of our other "beloved" federal offices, that has no clue. I've been audited twice. The first time the auditor had no clue. There was clear documentation that the gain was a long term gain, and yet they audited me, and caused me to run off and prove items they had no evidence were incorrect. Yes, with the IRS it is guilty until you prove yourself innocent.
This time, it was around some employee purchase plan stock. This allows me to buy stock by having money withheld from my paycheck, at a discount. The discount is to be taxed at my income rate, while any other gains are to be taxed as either long or short term gains, depending on the length of time the stock is held. Yet the IRS doesn't seem to understand their own rules, and wanted to tax me at the income rate for all the gains. After educating the auditor on the IRS's rules, they calculated, and insisted on dropping some decimal places, and rounding, which in the end resulted in rounding a result up, so I ended up paying an extra dollar! My tax guy sat there and laughed at the auditor, slapped a buck on the table, and asked if we were done, as it wasn't even worth his time to educate the guy further. The auditor was then furious, and insisted we stay so he could look at other issues, while my CPA told him that we are only required by law to discuss the items disclosed before the meeting, and if he wants to discuss something else, to please give us another audit notice. LOL
Unfortunately this is the kind of issue I expect going forward with the ACA. The ride is about to begin. Hold on tight... It's gonna be bumpy!
