Although there was a lot of gnashing of teeth over the implementation of the ACA, it would nothing compared to what would happen if people were suddenly tossed back into the uninsurable due to pre-existing situation that existed pre-ACA.
Likely any replacement for the ACA, or major overhaul, would address the "preexisting" issue. Even the advocates for repeal know the preexisting issue must be addressed, possibly with a government subsidized high risk pool.
In passing the bill much was made of the "millions" with preexisting conditions who could not buy insurance due to preexisting conditions as well as the 30 to 40 million uninsured who desperately wanted affordable insurance. Despite these assertions, hundreds of millions of dollar spent on signing people up, financial penalties for not being insured, and multiple extensions of the sit up deadline we find that only 6 million people signed up and another 6 million already insured with individual plans lost their plans. At this point we don't know how many of the six million who lost their plans were in the 6 million who signed up. Meanwhile a huge amount of disruption and uncertainty has been inserted in the healthcare marketplace due to the arbitrary and frequent rewriting of the rules, a huge new and costly federal bureaucracy has been established, and there is no clarity yet as to how much more the new system will cost compared to the old. Discussion of "savings" is virtually absent from the current heated debate.
While a few individuals may have lowered their health care costs, thanks to subsidies, the failure of the government to release the data it has about sign ups for independent analysis suggests the net effect in the marketplace for individual plans was higher premiums, deductibles, and copays (I.e. Costs). Certainly the screams from those adversely affected have been loud and the positive stories from the government about specific individuals benefiting from the ACA have been few.
As someone in the individual market with a preexisting condition (cancer), who experienced great difficulty and high annual expense to obtain individual insurance when I left corporate America prior to ACA, I had great hopes for healthcare reform. The only plan I could find exiting COBRA was a high deductible plan $5000/$10000. For the past 2 years I've easily met the deductible. Fortunately this plan paid 100% after the deductible was met.
I was one of the six million who received a letter last fall stating my plan was not ACA compliant and was being canceled. The company offered me a similar compliant plan for a 71% increase in premiums. The new plan had higher deductibles ($6250/$12500), added a 30% copay after the deductible was met, did not include dental (old plan did), and had fewer doctors in network. None of the ACA required enhancements to my old policy (maternity, pediatric dentistry, mental health) had any value to us. I checked the exchange and found the bronze plans were more expensive and offered less than the new private plan offered by my insurer. Thanks to my years of thrift and savings, prior to early retirement, my investments generate too much income for me to qualify for a subsidy. So at this point in time, for this individual with a preexisting condition, the implementation of ACA will more than double my annual healthcare costs with a lower level of benefits. did I budget for this level of increase in healthcare costs in the years prior to Medicare eligibility? No. Can I afford the increase? I have no choice and will have to curtail other spending to achieve my annual total budget goals.
To the extent there are millions of others making a similar reallocations of spending to support higher healthcare costs there will be a net reduction in consumer demand for food, energy, and other consumer good as and services. I suspect the net effect of the ACA to be a lowering of consumer discretionary spending in 2014. Currently sluggish retail sales, retail bankruptcies, and retail mergers in Q1 are symptoms of the ACA drag on consumer spending and the economy. I have to believe the economists inside the Fed and Treasury have already performed the analysis and the political advisors to the administration and Congress have seen the results. Hence the decision to delay ACA implementation for the much larger employer subsidized insurance marketplaces until after the elections.
Stay tuned for more uncertainty and slow economic growth.
