Obamacare – Pass on Insurance? – Train Wreck Coming

If the average family were to pay $10,000 per year for insurance, might they be better off keeping that money in a savings account and paying out doctor bills from that account and keeping whatever they don’t spend each year?

What if you are diagnosed with a terrible disease?  As of 1/1/14, at that time, you can apply for insurance and you are guaranteed to get the policy and not pay any more than you would if you were perfectly healthy.

It’s the law.

obamacare trainwreckJust last week retiring Democrat Senator, Max Baucaus, one of the authors of the ironically named “Affordable Care Act” (Obamacare) publicly called the new law a “Train Wreck”.  The train wreck is mostly referring to the implantation of the law and the expected 30-100% increase in premiums is only one of the issues.

I’ve waited to write about this upcoming debacle as I needed to get away from political topics that keep me up at night.  In this era of  “low information voters”, most people have no idea what the impact of the Affordability Care Act may have on their future.

This bill has the name “Affordable” in it, yet it will probably lead to dramatically higher premiums for everybody involved.  President Obama campaigned on this bill as a “cost reducer” for individuals, while many of us knew better, we were out-voted on election day.

  1. Small business insurance premiums will go up because policies are now mandated to cover many more basic services.  Imagine what would happen to the cost of your auto insurance if the policy was mandated to cover oil changes, tune ups, tire rotations and other basic car maintenance.

  2. Businesses with fewer than 50 full-time employees do not have to offer their employees medical insurance while it will be required that employers with over 50 full-time employees offer coverage.  The likely result of this is that many employers will cut their employees hours back to part-time status (under 30 hours) so they will not be required to offer their employees medical insurance.  For many employers, the additional cost of medical insurance would drive them out of business.  These newly made part-time employees will be making less money and the government will now require them to go out and get their own medical insurance.  Depending on their income, the government may subsidize some of their premium, creating another GIGANTIC FUTURE ENTITLEMENT.

  3. For those employers that do offer medical insurance they only need to offer coverage to the employee so many spouse’s and kids will be left on their own to get insurance.

  4. Insurance for individuals or families purchased directly from an insurance companies is also set to spike up in price for several reasons:

  •  Insurance polices are mandated to cover many more medical related expenses.


  •  The most likely people to purchase medical insurance are those that are in poor health and are already in need of care .  This “adverse selection” will drive up costs.  Law makers are depending on  young, healthy people who don’t feel the need to have medical insurance to purchase it, thereby helping keep the premiums down for the less healthy people.

    As incentive for everyone to purchase insurance, the government has imposed a “penalty” that the Supreme Court ruled was considered a “tax” to be paid if you do not purchase health insurance.  The penalty is generally a lot less than the cost of the insurance so it makes little sense for young healthy people to purchase the insurance.

Personally, I have a family policy, but see little reason in keeping it because as of 1/1/14, if someone in my family were to get sick, I could apply for a policy at that time and get full coverage and no extra charge.

I will be writing more about this in the future as I have not addressed the quality of care to expect, how doctors may respond and what is happening with the medical exchanges that are in the process of being set up according to the law.  One good piece of recent news is the federal insurance exchange program application was reduced from 21 pages to only three.

Time will tell what will happen and the “open enrollment” period for employees begins in October and the clock is ticking.

 Get informed: see links below.

Drop Coverage or Cut Hours? Big Companies Grapple With Obamacare

Insurers warn of overhaul-induced sticker shock

4 Expectations from President Obama’s Second Term

Daniel Kessler: The Coming ObamaCare Shock WSJ 4/30/3013

Obamacare’s Tax Hike Train Wreck


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Posted in Achieving Financial Independence, Policy and Your Money, Post-Retirement Planning and tagged , , , , , .


  1. The problem with not getting insurance is that if you have been a solid saver and frugal your whole life, you put all of your assets at risk if you have a cancer diagnosis, major car accident, or other condition that requires a long hospital stay. Medical insurance was devised to protect people from going bankrupt when something really bad happens. Now the savers are being punished. You either pay the high premiums or put your assets at risk. I hope every middle class liberal realizes this when faced with this upcoming decision . Dont blame the greedy hospitals, greedy doctors, greedy insurance companies,etc. Blame the Obama administration and yourself for being very misinformed. Keep fighting the good fight Brad!

    • If someone were diagnosed with a bad (expensive to treat disease (cancer)) they could still apply and get the insurance after they were diagnosed so all the treatment costs would be covered (insurance companies, can’t be turned down down after 1/1).
      Medical coverage from my auto insurance may cover most costs if there was an accident. My only concern is a heart attack or stroke as I couldn’t get the application filled out and approved while in the ambulance.http://www.lifeplanningtoday.com/wp-admin/edit-comments.php#comments-form

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