Monday, September 16, 2013

On the Contrary Mr. President, ObamaCare Does "Shoot Rates Way Up"

UPDATED on 8-OCT-2013 with latest pricing information from Covered California.  The new pricing is slightly higher than the information available in September, before the exchanges opened officially.

In a September 16, 2013 speech, President Obama said of the "Affordable Care Act (ACA or ObamaCare), the signature legislation during his presidency ...

“There were lot of the horror stories, how this would shoot rates way up, how there were going to be death panels, and all that stuff. None of that’s happened."
I'm sorry, Mr. President, but you are WRONG and I have the numbers to prove it--at least for our family.  Maybe a DOUBLING or a TRIPLING of insurance costs may not qualify for "shoot rates way up" in your book, but they do in ours.

Here's a chart showing the actual monthly premium costs paid for our Blue Shield of California high-deductible plan since the President first proposed his major overhaul of the U.S. health care system.  As is PLAINLY obvious, our rates have more than DOUBLED!  We even experienced a 30% increase just months after the "Affordable" Care Act (ACA) was officially signed into law.

That red dot in the upper right-hand corner?  That the price of the least-expensive plan available from Covered California, the ObamaCare health insurance exchange.  Notice that it is HIGHER than what we pay now, unless we receive a taxpayer-financed subsidy.  So, if we adopt one of the President's plans, our insurance premiums will be 231% higher--more than TRIPLE--what they were when the President first proposed ObamaCare.  The ObamaCare policy is also roughly 50% HIGHER than what we pay now.

The dashed dark red line shows the trend line for a 20.1% annual growth rate since President Obama took office, which is MUCH, MUCH faster than the official rate of inflation.

On the Covered California exchange, the price you actually pay for health insurance depends on your family size, age, and--most importantly--how much money you make.  The least-expensive plan available for our family is $1,121 per month, or $13,452 per year.  Depending on your income, the price you pay for this policy ranges from $0 to $13,224 with any difference generously paid by taxpayers via a subsidy called "premium assistance," as shown in the following chart.

There's also an interesting "feature" of the pricing structure.  For example, should our family income be $110,279 (which isn't "rich" for many portions of Santa Cruz County and its high housing costs and cost of living), we would pay $446 per month ($5,352 per year) for a $1,121 per month ($13,452 per year) health insurance package. Despite our income, the additional $8,100 cost difference is generously paid by as a subsidy from taxpayers.

However, should I earn just $1 more, the ObamaCare pricing scheme "shoot rates way up," as the President so eloquently states it, by $8,100.  Earning just $1 more--$110,280 per year instead of $100,279--increases my health insurance cost by $8,100!

I understand the reader's skepticism at this seemingly ridiculous claim.  Consequently, I encourage you to visit the Covered California web site and double-check my numbers for yourself using the data provided above in the screen shots.  One can only hope that this is somehow a "glitch" in the system, but it appears to be built into the pricing scheme for all packages, just at different income levels based on the number and ages of people covered.

As a side note, I fully expect those income limits to remain firm as income naturally increase thanks to inflation.  That way, more and more people are forced off subsidies into paying the full cost.  The current income levels are likely set based on ballot-box power.  You only need a certain percentage of people receiving government benefits to force them to vote your way.

Surely, ObamaCare makes those earning above $100,279 pay more simply out of fairness, right? Let's instead evaluate ObamaCare premiums as a percentage of total family income, as shown in the following chart. Those in the Obamacare "Donut Hole" pay the most as a percentage of income. The donut hole extends from $110,280 to almost $290,000.  Those making less than $110,280 pay less thanks to taxpayer subsidies.  Those making more than $290,000 pay less because ObamaCare premiums are a smaller share of their family income.  The "affordability" red line under the "Affordable" Care Act is supposed that nobody should pay more than 9.5% of their income toward health care.  On that measure, Covered California fails those earning between $110,280 and a little more than $140,000. Those who suffer from the wedge will either work less or work more to avoid the extra burden.  This is not what sane policy looks like.

But it gets worse.  Consider your "after-insurance" income under ObamaCare.  If I made $110,279, I would pay $5,352 for insurance but receive a $13,452 insurance policy thanks to the generous $8,100 taxpayer-provided subsidy.  My effective after-insurance income would be $110,279 (income) - $5,352 (the cost of the ObamaCare policy) + 8,100 (subsidy to buy and benefit from a $13,224 insurance plan), which equates to $113,027.

However, if I earn jut $1 more--$110,280 instead of $110,279--my after-insurance income actually DROPS BY $16,199!  My effective after-insurance income would be $110,280 (income) - $13,452 (the cost of the ObamaCare policy) + $0 (subsidy), which equates to just $97,056.

Thanks to ObamaCare, I can earn $1 more and actually end up with $16,199 less!  That's Obamanomics for you.

I won't even discuss the much more limited access to doctors.  It took over two months for my daughter to see a doctor about a leg injury.  In the meantime, she's stuck on crutches.

See also ...

Thursday, September 5, 2013

Syria and Chemical Weapons

Nobel-Peace-Prize-winning President Obama alleges that the Assad's regime in Syria used chemical weapons against his own people.  President Obama's recommended solution to redress this crime is to forgo using the collectivist, international frameworks that he so often praises and instead push for immediate and unilateral military attacks against Syria.  Syria did not attack the United States.

Assuming that the Obama Administration's charges against Syria are correct, is this the best solution?

The vast majority--188 altogether--of the planet's nations are signatories and have ratified the Chemical Weapons Convention (CWC), shown here in green.  As of the most recent update (May, 2009), five nations (shown in brown) choose not to participate in the agreement, including Syria, Egypt, North Korea, Somalia, and Angola.  Two nations have signed the CWC but have not ratified it, including Israel and Myanmar (formerly Burma).  Israel is located between Syria and Egypt, neither of whom have signed the CWC.

Although Syria has not signed the CWC, it did sign the Protocol for the Prohibition of the Use in War of Asphyxiating, Poisonous or other Gases, and of Bacteriological Methods of Warfare, also known as the Geneva Protocol.  The Geneva Protocol does not explicitly contain enforcement provisions.

Article XII of the CWC, however, describes the enforcement regime to ensure compliance.  Article XII states that ...
3. In cases where serious damage to the object and purpose of this Convention may result from activities prohibited under this Convention, in particular by Article I, the Conference may recommend collective measures to States Parties in conformity with international law.
4. The Conference shall, in cases of particular gravity, bring the issue, including relevant information and conclusions, to the attention of the United Nations General Assembly and the United Nations Security Council.

The United States is a signatory to the CWC.  Note that the CWC does not indicate that member nations can take unilateral action against an offender, unless, of course, the member state was directly attacked by the defender.  The alleged Syrian chemical attack happened exclusively within the borders of Syria, a non-member to the CWC. True, there is a risk that Syria's chemical weapons could fall into the hands of rogue players in the course of the Syrian civil war.  Will President Obama quote the Bush Doctrine of Preemptive Attack as justification?

Is President Obama afraid that CWC member states are just too weak to stand up to the mighty Assad regime?  Do the CWC member states have the military or economic power to dissuade Syria from further chemical attacks?

The CWC members nations include all twenty members of the G-20 major economies.
  1. European Union
  2. United States of America
  3. China
  4. Japan
  5. Germany
  6. France
  7. United Kingdom
  8. Brazil
  9. Russia
  10. Italy
  11. India
  12. Canada
  13. Australia
  14. Mexico
  15. South Korea
  16. Indonesia (an Islamic nation)
  17. Turkey (secular, but predominantly Islamic nation, neighbors Syria)
  18. Saudi Arabia (an Islamic nation)
  19. Argentina
  20. South Africa
If economic sanctions are not powerful enough against Syria, military force might be justified. The CWC members nations include eight of the ten largest militaries (by personnel).  Syria is ranked 15th.
  1. China
  2. United States
  3. India
  4. North Korea (NOT A CWC MEMBER)
  5. Russian Federation (an ally of Syria)
  6. South Korea
  7. Turkey (who neighbors Syria and is predominantly Islamic)
  8. Pakistan (an Islamic nation)
  9. Iran (an Islamic nation but whose Hezbollah proxies are already fighting in the Syrian civil war)
  10. Egypt (NOT A CWC MEMBER)
Why is President Obama pursuing unilateral military action against Syria instead of filing an official complaint via the CWC or directly taking the case to the United States General Assembly and the United Nations Security Council?  It is likely that China and Russia, two permanent members of the U.N. Security Council, will veto military action in Syria. However, the United States should pursue a diplomatic route to convince other United Nations members and not resort to unilateral action.

See also ...

Foreign Affairs: "No Strike, No Problem: The Right Way to Nurture a Norm" by Richard Price