Health Insurance: How Did We Get Here?

with No Comments

In 2013, President Obama promised that he would cut the cost of a typical family’s premium by up to $2,500 a year. On Tuesday, October 10, 2023, David John Marotta appeared on Radio 1070 WINA’s Schilling Show with Rob Schilling to talk about Obamacare 13 years later.

Here is an outline of the discussion:

0:00 Summary of how Health Insurance used to work.

3:00 “Freeloaders” or loopholes and a moral hazard in the tax code.

5:45 Grandfathered healthcare plans being cancelled.

7:30 How much healthcare costs have risen over the years.

9:53 Why did Obamacare raise insurance costs?

12:50 What happened to universal health insurance?

14:32 Why doesn’t this utopia work?

After over a decade of broken promises and rising costs, our need for a more sustainable healthcare system is acutely felt.

You can listen to the audio here:

Related Links & Notes

Rough Transcript:

Rob Schilling: David Marotta joins us today, the president of Marotta Wealth Management online at Marotta on And today, a subject I’m so glad we’re tackling. We’ve talked about this over the years time and time again, but people tend to forget and as more and more things happen in the world, we don’t remember to even think about Obamacare, which David is terming these promises, the lie of the century, which they certainly were. David, welcome back. It’s great to have you with us today.

David Marotta: Yeah. Thank you so much for having me.

Rob Schilling: The state of American healthcare, pre-Obamacare, so we have to kind of go back and put ourselves in that place because everything’s become jumbled since then, at least in my mind. But I know things were a lot better. So how would you classify the state of things back then?

David Marotta: You know, if you wanted to have insurance, it worked and it was inexpensive. That would be the way I would classify it. Yeah. If you didn’t want to have insurance, you didn’t have to have it. And if you had it, it would cover what you needed it to cover for a reasonable price. Our insurance in 2011 was $322. That was my wife and I.

Rob Schilling: Per month?

David Marotta: Per month, yes. It was very reasonable. If you were a young person, you could get insurance for somewhere between $50 and $100. That was what it would cost per month. And so that was an easy thing to do. It wasn’t difficult at all. And then came Obamacare. You know, and I wrote at the time that Obamacare is the worst legislation in 75 years. That was going back to Social Security, which is another.

Rob Schilling: I was going to ask you what the benchmark was.

David Marotta: You know, and I wrote it was the worst legislation in 75 years. And now that it’s been, you know, 13 years since Obamacare, I thought it would be good to go back and look at it. You know, Obamacare’s first lie was if you like your healthcare plan, you can keep it.

Rob Schilling: Yeah, we have that documented, don’t we? That was said many times.

David Marotta: Oh gosh, he repeated it often. You know, if for one time he said, if you like your healthcare plan, you’ll be able to keep your healthcare plan period. No one will take it away from you no matter what. That was his statement. (Wow.) PolitiFact, the nonpartisan group made that the 2013 lie of the year. You know, that got me thinking, okay, that was the lie of the year. But, but he also said, I will sign a universal healthcare bill into law by the end of my first term as president that will cover every American and cut the cost of a typical family’s premium by up to $2,500 per year.

Rob Schilling: Oh, I remember that one as well. Like, whoa, that’s like pulling a rabbit out of the hat. How do you do that? You put everybody on and then he cut people’s costs. I don’t see how that works.

David Marotta: Exactly, right. Yeah, because he said he would cut the healthcare costs of a typical family’s premium by $2,500 a year. That’s the lie of the century. That has got to be the lie of the century because if you look in retrospect of what Obamacare did, the premiums have gone up about five times what they used to be and they’ve gone up every single year and now they’re just ridiculous. Most people almost can’t afford healthcare anymore.

Rob Schilling: Well, this is interesting because a lot of people don’t actually see this because they’re heavily subsidized. So I remember at an early pro-Obamacare rally, the group Americans for Prosperity brought their battle bus to town and they were having a rally in front of Perriello’s office. And my daughter, my daughter who’s now 15 was in a stroller at the time. And I remember these two able-bodied young people coming up to us and kind of looking in the stroller at the end of the rally and on their hats, and these are probably in their 20s, I don’t know what they were doing off work in the middle of the day, but they had on their hats, “thank you for paying for my healthcare” and they’re looking down at my daughter and that’s a picture I will never forget. These people who are easily able to work and pay for themselves are now freeloading and then bragging about it made me sick.

David Marotta: Everything is one way of putting it, we view it as a loophole in the law that if you cannot have any income, especially if you’re late in your 60s, you can have subsidized healthcare. And we now put that as part of our tax planning. So just to be clear, we have people who have millions of dollars in a Roth IRA and no income and fully subsidized healthcare.

Rob Schilling: And see, this is important because when I say freeloaders, I’m saying it in the way that that’s what we would call it. I’m not saying people shouldn’t take advantage of the opportunity because if it’s there and it benefits you and that’s the law, then you should by all means do it. But the concept is that some people are freeloading off other people. And again, I’m not saying people shouldn’t take advantage of what they can, but that’s what it would have been called in prior generations. Like you’re not paying your fair share, someone else is paying it for you, that’s freeloading.

David Marotta: Yeah, it’s a moral hazard to have something like that in the tax code. Yes. It is not a moral problem to take advantage of it. In fact, in some of our cases, we have to do enough Roth conversion to get out of Medicaid subsidies and into subsidized healthcare. So we’re doing a little bit of Roth conversion to ensure that they don’t have to suffer on Medicaid, they can actually get up into subsidized healthcare.

Rob Schilling: This is also confusing to me. And again, it doesn’t have to be. I do think it’s important because there was this big promise of everyone’s going to have insurance, but there’s a difference between having health insurance and healthcare. Let’s draw that distinction if you would, please.

David Marotta: Yeah. So healthcare costs have done whatever healthcare costs have done, but healthcare insurance is what skyrocketed because that is what Obamacare is all about. All about health insurance. And health insurance is skyrocketed, even though the healthcare industry hasn’t gone up by all that much. It’s more the insurance industry that’s really now dealing with this issue. My wife and I were two of the few people who had grandfathered healthcare. And when we had grandfathered healthcare, it was the old system. But this year, Anthem is canceling our healthcare. They’re doing it in cahoots with the Virginia Insurance Commission and the two of them have gotten together. And even though our healthcare was grandfathered and was returning premiums because you can only charge so much and they were giving us money back every year because our cohort was healthy. Now they’re canceling our healthcare and we can’t have it anymore. So although we’re some of the few who were able to keep our healthcare, we now can’t keep our healthcare anymore because they’re canceling it.

Rob Schilling: So I got to ask you about that. So this was the promise. It obviously was a lie and a deception and we’ve seen the kind of things that were going on in the background over all of this. But how is it that they were able to tell such a lie and how is it that when they said you can keep it that these companies are just unilaterally canceling it? Is that just their prerogative or was there something more going on here?

David Marotta: They have to appeal to the Virginia Insurance Commission and I don’t know why the Virginia Insurance Commission has said, “yes, you can cancel these people’s healthcare.” That’s what I’m wondering. I don’t understand that. I think that is a travesty of the Virginia insurance system. We want our healthcare where our healthcare is more than paying for the costs because we’re getting a refund every year and now they say we can’t have it anymore.

Rob Schilling: When we come back on the other side, I do want to talk about what happened to those premiums over the year and then I know that you also tried to replace it or have replaced it on the market, so-called market and we’re going to let everybody know what actually happened dollar-wise. Michelle Choc continues, David Marotta, the lie of the century, Obamacare and what a disaster this has been. JC writes in, “we had coverage for our kids at $59 a month, which was great, but it was canceled in 2016.” Again, these promises, so I guess the question is, why were they not compelled to uphold a reserve? I know there were a lot of lawsuits that even went up to the courts at every time, but were you aware of any individuals who were suing, give me back my policy? It seems to me somebody should have, but maybe it just wasn’t tenable.

David Marotta: People have tried that to no avail. As long as the insurance, the state insurance board approves that they can cancel their insurance, they can cancel their insurance. It’s kind of like with long-term care. As long as the state insurance commission approves an increase in premiums, they can hike them 60%.

Rob Schilling: Let’s talk about your own, the numbers, because it was pretty astounding when I read your piece.

David Marotta: Yes, so we started with insurance that was $322 per month, and they’ve risen it every year since then. It was all the way up to this year, it was $1,199. That’s grandfathered insurance. When we go off the exchange, it’s 30% higher from that. This is into the marketplace. Yes, into the marketplace.

Rob Schilling: So another 30% up from that?

David Marotta: Yeah, 30% up. And next year it’ll be even higher, it’ll be 33.5%.

Rob Schilling: And what about the deductible, I would imagine, that’s changed also.

David Marotta: Yeah, our deductible was $3,500, and it’s going up to $5,900, so it’s almost doubling. And our out-of-pocket maximum is increasing from $5,000 to $7,500.

Rob Schilling: So help me understand, and I asked you this off the air, but I’m trying to wrap my head around the difference between your deductible and why the out-of-pocket is so much higher than the deductible.

David Marotta: Because it’s two different people, the deductible per person and per incident can be different. And once we’ve hit our deductible, then it like pays 80% up to the out-of-pocket maximum.

Rob Schilling: Okay, so there’s like a stop gap in there somewhere?

David Marotta: Yeah, that’s what is going on there. And so while it might be per incident, we can get a lower rate per unit together with both of us, it’s higher.

Rob Schilling: We should talk about the fundamentals, the economic science that can’t be denied here. Why did Obamacare make health insurance less affordable, even though it was called the Affordable Care Act, a term that I never used because it’s such a lie, but I guess we ought to remember that lie?

David Marotta: You know, the fact that the so-called Affordable Care Act is still being defended as a beneficial program shows a refusal to use the outcome-based science of economics to evaluate government programs. It’s just an absolute refusal. And you know, liberals always bristle when critics choose not to call the legislation by its name the Affordable Care Act, but it’s anything but the Affordable Care Act. It’s just a lie. In fact, most government programs, if you look at what they’re called, they’re usually the exact opposite of what they’re called. And that’s just the way government hides its shady dealings. But the reason why the Affordable Care Act didn’t result in affordable care is that first of all, you had no incentive if you had a pre-existing condition to try to get insurance because if you got insurance before you had the pre-existing condition, it costs the same now as if you get insurance after having the pre-existing condition. So the cheapest way to have health care now is not to have any insurance. And then when you get some condition, you go on the exchange and you get insurance. So you only get insurance for when you need it, you don’t need to get it for when you don’t need it. Additionally, insurance is to pool protection against a large unlikely loss. That’s the definition that we in the financial planning industry learn to think of insurance as the right answer. It’s to pool protection against a large unlikely loss. Instead, what they did is they subsidized what are likely expenses. So all this stuff, which is just normal care, all gets included for no cost to the participant. All of the stuff that’s included for no cost are just like routine visits and things like that. And you can say, oh, well, the routine visits will somehow protect you from the emergency room, but it doesn’t matter because you can go to the emergency room too. You can use the emergency room like your family practice doctor. So all of these things are not allowing the burdens of health care to be borne by the participants of health care.

Rob Schilling: There’s something that was going on and I’m going to talk about everyone being insured, so-called, but in Los Angeles, when I lived there, there was a phenomenon called bus jumping. So when a bus would get in an accident, you’d have passers by go, “I’m going to go jump on the bus and get a payout because they’ll just think that I was involved in the accident and now my neck hurts.” And this sounds like the same thing, like you don’t carry insurance and then when you get sick, then you go jump on the bus and then you get a payout for it. But one of the conditions was that everybody had to have insurance and yet we keep hearing year after year, there’s all these millions of uninsured people. So that sounds like another lie to me. What happened there?

David Marotta: Yes, I do not understand how anyone today can claim, “oh, I don’t have insurance.” There’s not a maximum on my out-of-pocket expenses. Except that they are just trying to game the system and then they don’t game the system right. But there’s no reason. In fact, when I look at my premiums, I’ve paid over $120,000 in premiums and got nothing for it. Wow. So $120,000, I would have been better off to not have insurance and have $7,000 every year of medical expenses. And that’s just the truth of insurance. Insurance is a terrible idea for all, but maybe less than 5% of the population. That’s why it’s better if insurance is covering you for a large unlikely loss. If it’s just grocery store insurance, I go to the grocery store every week and I can buy all the filet mignon I want. If we did that, grocery store insurance would become very expensive. There’d be people in the grocery store shopping for filet mignon and caviar and all the expensive stuff. And then pretty soon you’d go to the grocery store and you wouldn’t have any filet mignon and caviar. You’d have rotten meat so that no one would want it and then you’d get back to more affordable care. So that’s where we’re headed. The quality of health care that you can get is going down as the costs are going up.

Rob Schilling: So then there’s the blame, well, the problem is that we have these corporate profits, these high corporate profits. And if they would only just be more reasonable, then of course we could have everybody covered in this great utopia.

David Marotta: Yes. And the great utopia is what liberals think should happen. And it doesn’t. Because if you have legislation like this, you’re going to have able-bodied people who are between 60 and 65 so they can’t get Medicare yet. And they’re going to purposefully leave their income low and go on the exchange and bill Obamacare for every dime they can get out of it. And you’re going to have insurance companies who are going to take a look at the old grandfather plans and the new plans. And they’re going to cancel the old grandfather plans because they can make more money with the new plans. If you expect anyone to do anything different, you don’t live in the real world. In the real world, we have all kinds of problems because people are basically sinful and selfish. And if you don’t think you’re sinful and selfish, you’re just deluding yourself.

Rob Schilling: So in our remaining minute or so, what should we be doing or maybe there’s a model that some other countries are using that we could emulate? Is there any way out of this?

David Marotta: I was very surprised when the Republican Congress, the first thing they didn’t do was to cancel Obamacare.

Rob Schilling: That’s right. That was a promise and they never kept it.

David Marotta: And that has now made it more liable to be the way going forward just like Social Security. Social Security is making us all retire when we could retire as millionaires, where we’re retiring with a pittance, and it’s making us pay a lot more for our health care. I would repeal both pieces of legislation and I would have a true need-based system and just call it that. Don’t call it Obamacare when they have to ruin health care for 85 to 95 percent of us. Have it for the 5 percent who really need it.

Rob Schilling: I’d love to see some strong governors in some of the various states like Tennessee and maybe Texas and Florida just say, “you know what, we’re opting out. This is a sanctuary state for Obamacare and you come here and we’re going to have our own health insurance.” I really do think it’s going to come to that because this is unsustainable and the whole thing’s going to crash and then where do we go from there? David Marotta, terrific piece that you have. It’s online at where people can also reach you, correct?

David Marotta: It’s actually getting published October 20th.

Rob Schilling: Oh, we got a preview today. Yes. All right, then I’ll have to wait for that but there’s lots of other great information online at Thank you so much.

David Marotta: Awesome. Thank you for having me.

Photo by Tobias Cornille on Unsplash. Image has been cropped.

Follow David John Marotta:

President, CFP®, AIF®, AAMS®

David John Marotta is the Founder and President of Marotta Wealth Management. He played for the State Department chess team at age 11, graduated from Stanford, taught Computer and Information Science, and still loves math and strategy games. In addition to his financial writing, David is a co-author of The Haunting of Bob Cratchit.