“In the days of direct payment, a bill for a 4-day maternity and 4-day nursery stay, including $10 for the delivery room, was $52.50 in 1950 [$475 in 2010]…The statement was handwritten on a half-sheet of paper.” —Dr. James Brook, “The High Price of Socialized Medicine”
In 2010, President Obama mandated insurance with tax supports in state “exchanges” covering all but corporate employees, the elderly or children under 25 now insured with parents’ insurance. This halved the ranks of uninsured. Congress eliminated “taxes” on the uninsured with hopes that “adverse selection” by the sickly would ruin Obamacare finances. But California localized penalties averaging $800 per adult or 2.5% of gross income above filing thresholds. Obamacare faced down Supreme Court challenges and President Trump’s final repeal attempt in 2017.
The New York Times predicts premium increases of 18% this year, 30% according to MSN and the Centers for Medicare and Medicaid Services. Average middle class premiums, Biden’s Covid response, are $600 monthly before subsidies contested in shutdown debates. Republican critics believe “The law made insurance just too expensive.” And Forbes calculates that “The median price of an individual plan was $3,736 in 2011, adjusted for inflation, before Obamacare, nearly doubling to $6,233 in 2023.” How can consumers plan?
Increasing Insurance Costs
Americans spend twice as much on healthcare as other countries and doctors deserve little blame. They waste time on defensive procedures, obtrusive reporting and complicated medical billing. In 2016, the Annals of Internal Medicine concluded, “For every hour physicians provide direct clinical face time to patients, nearly 2 additional hours is spent on EHR and desk work within the clinic day.” The New York Times concurs: “…the numbers of administrators has risen nearly 3,000 percent over the last 30 years.”
Subsidies, tax breaks and difficult comparisons disguise costs. The NY Times says Americans pay yearly: “Obamacare: $7,428…; Employer coverage: $9,325; Medicaid: $8,527; [and] Medicare: $14,674.” Medicaid recipients and employees ignore costs while Medicare recipients care most about supplementary insurance. Small business owners or employees must buy insurance in Covered California markets. Wealthy individuals pay 3.8% Obamataxes on investment or business earnings over $200K ($250K Married), or 2.35% employer payroll taxes. Socialized medicine may further increase costs by removing bargain-hunting incentives: “Canadians pay an average of 48% of their income in taxes,” writes Dr. Brook, “and in Ontario, 40% of every tax dollar goes to Medicare.”
Health Insurance Planning
ACA welcomes all to “open enrollment” with “guaranteed issue” policies not based on health conditions. “Essential health benefits” include emergency services, hospitalization, doctors, specialists, behavioral health, substance abuse, rehabilitation, lab services, preventative care and pediatric services. Obamacare diminishes personal planning and responsibility by forcing teetotalers to buy alcoholic medicine, athletes to cover obesity drugs and nuns to subsidize California abortions.
Medicaid recipients lose insurance at roughly 138% of federal poverty levels and ACA subsidies cease when income exceeds 400%: $62,600 for singles or $84,600 for couples. Low premiums but high out-of-pocket costs go with bronze plans, but high premiums and low out-of-pocket costs accompany Platinum plans. Cheapskates or the young and healthy prefer bronze plans but sickly people with higher income prefer gold or Platinum plans. HMOs with gatekeeper doctors beat PPOs if the local network gives needed services. For large but unlikely expenses, insurance planning usually saves costs with high deductibles and higher pay limits.
Catastrophic Coverage with Savings Reduces Healthcare Costs
Obamacare users in 2026 will more frequently turn to “catastrophic health insurance” for pricey procedures, preventive care and three doctor’s visits. Obamacare denied this tempting choice to all but those under 30 or people who qualify for hardship or affordability exemptions. See healthinsurance.org and file paperwork.
With method behind the madness of denying subsidies, Trump’s Big Beautiful Bill now qualifies the denied for catastrophic insurance and simultaneously allows them to get Health Savings Accounts to economize or invest funds with savings that can be invested in the market and withdrawn at retirement—like “Buy Term and Invest the Difference.” BMI falls as net worth rises when planning reduces unnecessary costs in paperwork, networks, insurance middlemen and outrageous denials.
Obamacare insures millions but subsidies don’t restrain rising medical costs. His catastrophic health insurance, preventing medical bankruptcies, could be guaranteed for the needy with refundable tax credits, while partially subsidized HSAs reinvigorate flexible markets for affordable cash-and-carry medicine.
Robert Arne, EA, CFP, MS, of Carpe Diem Financial Life Planning, gives holistic financial advice as his client’s fee-only fiduciary. He serves mostly Santa Cruz Mountain dwellers. These articles must not be read as personal financial, mortgage, tax or investment advice; consult appropriate professionals. Learn more at www.carpediem.financial.
