I've never before written anything about the Affordable Care Act, otherwise known as Obamacare.
That's because I didn't want to jump into the debate on one side or the other before letting some dust settle and seeing what there really is to see.
As the old Johnny Nash song goes, "I can see clearly now the rain is gone. I can see all obstacles in my way."
Too bad the next line is the exact opposite of what I see. Nash sings, "Gone are the dark clouds that had me down. It's gonna be a bright, bright, bright, bright, sunny day."
NOT!
The future of Obamacare isn't bright. It's not even cloudy. It's black, as in a giant black hole.
That's because the Affordable Care Act is going to be anything but affordable. It's going to get more and more expensive, as if it's not already outrageously overpriced hype.
What is Obamacare really? It's a make-richer scheme for giant insurance companies.
Now, I'll tell you exactly what this Obamination is going to do to your health plan, the U.S. economy, and your wallet...
Why Obamacare Is a Bad Deal
Maybe you or someone you know is better off today because now they can get insurance when a preexisting condition prevented them from getting coverage prior to Obaminationcare. Maybe you're one of the tens of thousands of people who gets a subsidy to help pay for your new insurance.
Maybe, for a lot of people, the ACA is great deal.
But it's not a great deal. All of us will eventually find out that Obamacare is a deal with the devil.
Forget about issues regarding doctors you can't see because they don't take Obamacare, or the limited number of hospitals that take Obamination plans, or what's covered under what plans, or any of the "personal" actual health-related issues with Obamacarenot.
I want to talk about premiums, subsidies, and profits - and how this scheme will fail.
Everyone I know with new insurance coverage mandated by Obamacare is paying a lot more than they were paying for coverage before... every one of them. And those with family plans are paying a "hole" lot more. And you and they and I will be paying more and more every year from now on.
While you can bet your last dollar you'll see a premium increase this year, if you haven't already, the real pain will begin in 2017 - and then get progressively worse and worse.
That's because in 2017 three things happen... things I'll bet you had no idea about.
First, the Unaffordable Care Act's "essential benefits" requirements kick in on Jan. 1, 2017. That's when all plans will have to provide all of the act's mandated "benefits."
There's a good chance your plan doesn't include all those benefits now. In fact, Stephen Parente, director of the Medical Industry Leadership Institute at the University of Minnesota and coauthor of a paper on the ACA's structural problems, says that 60% of all plans sold in 2013 wouldn't cut it in 2017.
In case you missed the point, if you're not happy now with your premium costs, just wait until your insurance provider adds in mandated "essential benefits" and tells you it has to charge you for the additional coverage.
Then there's the "reinsurance" scheme that expires in 2017. You probably didn't know the federal government currently reinsures insurance companies by reimbursing the companies for 80% of a patient's healthcare costs whenever the patient has more than $45,000 in annual claims.
When that ends in 2017, guess who's going to be charged more to make up for lost government - make that taxpayer - reinsurance freebies bestowed on profit-making insurance companies?
The third given being taken away in 2017 is "risk corridor" coverage for insurance companies. In spite of the higher premiums you're already paying, if insurance companies providing ACA plans lose money, taxpayers make them whole.
Didn't know that, did you?
Guess who is going to pick up the slack starting in 2017? Not the government, not even the taxpayers... you and you alone will pick up the tab.
And you won't be picking up that tab after you cost your insurance company more than it expected. You'll be paying long before you ever receive any of those benefits, if you ever need them.
Now You Get It
As costs go up for consumers, they will seek cheaper and cheaper plans, with minimum benefits, and higher and higher deductibles. What a great deal this will end up being.
But it gets worse.
According to Stephen T. Parente's op-ed piece in The New York Times, "Rising premiums will create a cyclical exodus from insurance plans, with each wave of departures fueling premium spikes that cause more departures."
It's a travesty of a mockery of a sham. We'll end up worse off, while the insurance companies profit handsomely by charging more and providing less.
"So perishes the Affordable Care Act's promise to deliver universal health care - it's a fatal conceit," Parente writes. "The autopsy will show it died from a lack of affordability, leaving behind millions of Americans who were sold a bill of goods."
He has it exactly right. This one-act tragedy is nothing but a bill of goods.
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About the Author
Shah Gilani boasts a financial pedigree unlike any other. He ran his first hedge fund in 1982 from his seat on the floor of the Chicago Board of Options Exchange. When options on the Standard & Poor's 100 began trading on March 11, 1983, Shah worked in "the pit" as a market maker.
The work he did laid the foundation for what would later become the VIX - to this day one of the most widely used indicators worldwide. After leaving Chicago to run the futures and options division of the British banking giant Lloyd's TSB, Shah moved up to Roosevelt & Cross Inc., an old-line New York boutique firm. There he originated and ran a packaged fixed-income trading desk, and established that company's "listed" and OTC trading desks.
Shah founded a second hedge fund in 1999, which he ran until 2003.
Shah's vast network of contacts includes the biggest players on Wall Street and in international finance. These contacts give him the real story - when others only get what the investment banks want them to see.
Today, as editor of Hyperdrive Portfolio, Shah presents his legion of subscribers with massive profit opportunities that result from paradigm shifts in the way we work, play, and live.
Shah is a frequent guest on CNBC, Forbes, and MarketWatch, and you can catch him every week on Fox Business's Varney & Co.