Percentages

Three questions:

1. Do you know how Obamacare funds the operation of insurance exchanges?
2. Do you know how the Obamacare tax on insurers is paid? 
3. Do you know how Obamacare "limits" the profits of insurers?

The answer is the title of this post - percentages. 

Next question. Do you know what is wrong with percentages in Obamacare? 

Percentages in Obamacare hit the pocketbooks of consumers. What I mean is because of percentages you pay more for insurance - and you will continue to do so under the way Obamacare is set up. It's a sleight of hand used by government to make you think you are getting favorable treatment when reality is you are actually getting royally screwed.

Here's how the percentages work. Under Obamacare's exchanges there is a 3.5% user fee on premiums for all plans. This user fee is to help keep up a robust, easy to navigate website where you can compare plans and purchase insurance. Obamacare's Health Insurer Tax (HIT) is paid by insurers and ranges from 3% to 5% of premiums based on an insurance company market share. Obamacare's Minimum Loss Ratio limits insurance companies by a rule that they have to pay 80% (85% in large employer market) of their premiums on medical costs and can only retain 20% for whatever they want which theoretically minimizes profits.

If all you had read was the previous paragraph you would likely believe that Obamacare protects consumers from greedy insurance companies. But, when you peel back the layers of the onion what you will find will make you want to cry. The tears come because of premiums.

Think about your premiums. How much have they gone up since Obamacare passed? Throw aside the feel good subsidies. The true premiums are still paid to insurers. It's this layer of the onion that matters most. 

Rising costs of insurance in a percentage world are problematic. Especially when the percentage side has no increase in costs of doing business. Look at it this way, the website for Obamacare is set. The number of people using the site has been slightly up (close to flat) the last couple of years. Insurer costs aren't increasing. They aren't adding employees or increasing wages to existing employees at a high rate. In fact, many insurers have downsized. As for the Health Insurance Tax, we all know companies don't pay taxes, consumers do. 

The point is, as costs increase and these percentages stay the same, more of your premiums go to insurers and the government. 

Take this data from an eHealth report on average Obamacare premiums. Every year costs have gone up. Since 2013 what is paid by consumers for the user fee, HIT, and retained by insurance companies has jumped by 99%. The average amount of premium per consumer to fund these three things has gone from $650 per year up to $1297 per year.

Numbers don't lie. You are paying big time to the government and health insurers for taxes, fees, and margins. None of these things pay a dime for your actual health care. That is what I consider one bad raw onion.