Obama Care is Costing Americans $384 Billion More Each Year

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Obamacare approved 3/23/2010

Health insurance costs went up this year. Mine went up 24%, which I understand is lower than many experienced. The increases are entirely the result of the so-called “Patient Protection and Affordable Care Act” (PPACA), otherwise known as “Obama Care.” The official name is misleading and untrue as it has neither protected patients nor made healthcare more affordable.

Assuming a 24% increase I used the back of a napkin to compute approximately how much Obama Care is costing America and the average American:

$2.5 trillion (approximate U.S. spending on healthcare in 2009)

64% (Spending by private health insurance) Insurance costs more than this because companies have overhead and make a profit.

24% (my rise in insurance costs)

$384 billion increase in insurance costs for America.

312,741,601 (US Population)

$1,227.85 increase in insurance costs for the average American

President Obama wants to give every American an extra $1,000 by raiding the Social Security Trust funding for another year. His hypocrisy is made more clear by the thought that if Social Security were privatized he would be raiding your private retirement to give it to you now in order to encourage you to spend it early and boost the economy to help get himself re-elected. Had he not pushed his healthcare plan through over the top of Republican opposition you would not need the extra $1,227.85 each year to pay your increased medical insurance costs.

My coverage (for a family of four) increased from $352.00 to $437.00 a month. If you are wondering why that is so low, it is because we have a High Deductible Health Plan (HDHP) along with a Health Savings Account (HSA). That coverage provides us with a $3,500 deductible and then coverage at 100% after that. We’ve never come close to our deductible, but even if we did, our maximum out of pocket expense would be: $8,744 ($437 x 12 + $3,500). Most years our coverage is closer to $5,244 ($437 x 12).

Average health care premiums for non-HDHP+HSA coverage rose to $10,944 for employers and $4,129 for workers for a total of $15,073 in 2011. HSAs are a better deal for healthy Americans. Why pay $15,073 when you can max your out of pocket expenses at $8,744? Most healthcare costs are on account of life-style choices. Avoiding destructive lifestyle choices saves money.

Here are some of the articles which describe how HSAs work:

Video: Health Savings Accounts May Save You Money

Money Questions: The Lowdown on HSAs

Health Savings Accounts

Fund Your HSA to Cover Retirement Healthcare Costs

If the high cost of healthcare is sinking your business, talk to a comprehensive fee-only financial planner and learn how each employee can own their own health care insurance.

This blog post is part of “The Economics Of Healthcare series“.

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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.

One Response

  1. David John Marotta

    As an update to my article, “ObamaCare Is the Worst Legislation in 75 Years” I read recently a piece by Avik Roy entitled, “Democrats’ New Argument: It’s A Good Thing That Obamacare Doubles Individual Health Insurance Premiums” which read in part,

    But in the end, I’m glad that we’re finally having the intellectually honest argument about Obamacare that we should have been having all along. No, Obamacare won’t decrease the cost of your insurance by $2,500 a year. Indeed, it could raise it by that much. No, under Obamacare, you can’t keep your plan, if you like your plan. Instead, you’ll be forced to buy a costlier plan with add-ons that you neither need nor want.