Sunday, July 08, 2012

Living Paycheck to Paycheck With Obamacare

Probably half of the population lives from paycheck to paycheck. And even if that isn’t the case, everyone’s priorities on what bills get paid are different. A large majority of people never saved for retirement. Social Security changed that. So now what’s left of the paycheck is spendable. The major spending decisions revolve around the rent/mortgage payment, food, auto payment, car insurance etc. The car and home are the two bills that have to be covered, no matter what (unless your home is in foreclosure, in that case you don’t have to worry about house payments, only about eviction).

In the event the wage earner’s income gets squeezed, decisions are made on what is necessary for day to day living. Is it diapers or a 12 pack of beer and cigarettes? Do you really need car insurance? Can we get the kids on the free school lunch program? Cut out day care for the kids and instruct them not to answer the door.

With government programs like food stamps, cable TV and cell phones suddenly become affordable. Notice that the family decides on what expenses are necessary. Health insurance is not on the top of the list. Why pay for it, go to the emergency room if you really need to, otherwise forget it. These are the 50 million people that Obama wants to insure. In the past they have made the decisions on where they spent their income; now one of these financial decisions is no longer optional. In the lower income households, this will become visibly obvious, as a tax. A yearly income of $36,000 drops to $34,000 with health insurance. Their paycheck will be 50 dollars a week smaller. So the single woman with 2 kids gets a $200 dollar a month loss of income and wow, paid health care. No Cable TV for the kids and Mom has no car insurance. Mom and the kids are one car accident away from real trouble.

We know what happened when Congress tried to make home ownership affordable for everyone. It was the American Dream turned into a nightmare for many home owners. This health care insurance for everyone is an undefined bottomless pit. The neat thing about it, when it goes bust, nobody will be scratching their heads wondering why. The question you have to ask is, "How can this new government program promise the moon for no charge?" Doctors right now are refusing Medicare patients because of the paltry government reimbursement rates. And we are not even talking health insurance here.

The Supreme Court has ruled Social Security and Obamacare are taxes. In other words, the government cannot be held accountable as to what they spend the collected money on. The benefits are not guaranteed, only promised. This law will change how each house hold spends its weekly pay check. Rent, car payments/repairs, gasoline, cigarettes, booze and lottery tickets are the bare necessities. Food for the kids and day care are now optional. The family budget is a little like a balloon, squeeze it with your hand and it moves out between your fingers. Those 50 million people will probably now qualify for food stamps. Hmmm take away $50 a week with one government program and get it back with another.

Car insurance will become optional for the Hoi Polloi and sadly, the emergency room can't be used for auto repairs. The road to hell is paved with good intentions. Why do I get the idea that Obamacare is not going to work quite as planned?

Copyright 2012 by Jim Brubaker


Anonymous said...

There are some other facets in addition to all you have said: mainly the effect of a shakeup in the whole nation's healthcare industry.

Expect that hospitals are very much expected to cut their numbers of full time employees.

They must do this pre-emptively to stay in the black. Many smaller and medium sized hospitals are likely to be sold also.

Imagine a wave of chaos passing through the healtcare industry from coast to coast.

Bigger fish (bigger hospitals and huge 'healthcare systems') will gobble up and buy the medium sized and smaller ones.

Next will be a wave of 'lost' contracts and a significant number of layoffs for healthcare workers as a result, as the new healthcare systems consolidate.

I imagine this could settle down after 4-5 years ... but until then, expect serious upheaval as the industry implodes down into a 'new normal' with procedures moved away from smaller hospitals into bigger centers because the only profits can result from an 'economy of scale' like that.

If you live in a small or medium-sized town, expect you will need to leave your area to get any complicated procedures (surgeries) above the lower tier of hernia repair or gallbladder removal :P

Ugly stuff!

I wish I worked in some other industry! Hah! I must laugh about it to keep from crying!

Anonymous said...

Wake up call!

Jim in San Marcos said...

Hi Anon 11:24

You're right, the health care system is in chaos, but the part in real trouble is emergency health care. I read a LA article a few years back, that 1/3 of the emergency hospitals in Los Angeles had closed and it was a 20 mile ambulance ride from Glendale to an emergency room for a heart attack victim.

I really don't see bigger hospitals buying out the smaller ones. You're going to see hospitals that shut down at 6pm and open back up at 6 am for scheduled surgery.

The emergency room is going to disappear, just like the gas station rest room.

zgirl said...

My complaint is that nothing is being done to increase supply alongside this massive increase in demand. There's no new initiative to provide health care providers while adding 50 million potential health care users. It's as if they passed a bill to break health care in this country to force nationalized health care down the road.

Anonymous said...

The cost of those who go to the emergency room and don't pay is reflected in your hospital costs and insurance premiums. Better those folks are paying $50 a month under the "Affordable Health Care Act".
The problem isn't providing health care to our citizens...its the corrupt system and the people that run it. The health care part is easy...lots of countries are doing it and doing it well.

Jim in San Marcos said...

Hi Anon 9:32

Your comment "...lots of countries are doing it and doing it well" has me confused. I can't see one country that can offer government health care that can offer what we already have, that isn't on the brink of bankruptcy.

The concept that we can't afford health insurance as individuals, but by god we can with government help makes little financial sense.

If we define insurance as a plan to pay now for what we will pay for later completely, then the system works. The trouble is, there is no such concept with government coverage. It's pure socialism.

Jim in San Marcos said...

Hi Zgirl

You are right on. Of course the people in charge are not listening to us.

Your synopsis of what is happening is clear and concise and done in only two sentences. Good work!