Finding Out about Obamacare

by Robert Zubrin
There’s a real reform that Congress should have passed — and should still pass.

Nancy Pelosi promised that we would all find out what Obamacare entailed after the billed was passed. Last week I did.

I run a small company with 18 employees on its payroll. We have a health-insurance plan administered by Anthem Blue Cross. Last week, Blue Cross notified us that unless we renewed our plan immediately, accepting an 11.3 percent increase in our rates, we would have to accept the new Obamacare rates, which will go into effect in January 2014. These would entail a 38.2 percent increase.

I don’t like being shaken down like this. But business is business, and an 11 percent hit beats 38 percent, so I took the offer. But that will only postpone the problem. Starting next year, we will have to pay the full burden of the new higher Obamacare health-insurance rates.

To compute our new Obamacare-era rates, Blue Cross did not simply levy a higher rate across the board. Rather, it calculated a new rate for each and every employee, based individually on his or her age and family circumstances. The sheet showing this calculation may be found here. (I have blanked out the employees’ names for privacy.)

The size of the Obamacare-driven rate increase varies greatly from employee to employee, ranging from 15.1 percent at the low end to 103.1 percent at the high end. Despite the fact that my employees vary in age from 25 to 64, not a single one had his or her rate decrease.

The 38 percent increase in our health-insurance bill will represent an amount equal to 4 percent of the entire company payroll. Thus, on average, Obamacare will cost my employees an amount equal to a 4 percent raise, or require that the workforce be reduced by 4 percent, or some combination of the two.

Fewer jobs, at lower pay. That’s what Obamacare means. There is no reason to believe that the experience of my company is exceptional, and if it is not, then we could be looking at something like a 4 percent loss in American workers’ income, whether experienced as lost jobs or lost wages.

When the government mandates that everyone must buy a product, its sellers can, and will, increase its price, potentially without limit. The only surprise is how fast the insurance industry has chosen to do so.

What is needed is more competition, not less. What is needed is laws that reduce the leverage of insurance oligopolies rather than increase it. Instead of forcing everyone to buy health insurance, Congress should pass a law protecting the uninsured from being charged more than the insurance companies are for a given service. Were such protections in place, small businesses, associations, and individuals could readily band together and, by using a combination of health savings accounts and low-cost catastrophic insurance, find much more economical ways to insure themselves.

Then maybe Blue Cross would think twice about jacking up its rates.

— Robert Zubrin is president of Pioneer Energy and the author of Energy Victory. His latest book, Merchants of Despair: Radical Environmentalists, Criminal Pseudo-Scientists, and the Fatal Cult of Antihumanism, was published last year by Encounter Books.

EDITOR’S NOTE: This article has been amended since its initial posting.