Market Mad House

In individuals, insanity is rare; but in groups, parties, nations and epochs, it is the rule. Friedrich Nietzsche

Market Insanity

Study Shows How Obamacare Impoverishes Americans

Obamacare could actually make some Americans poorer, a new study from the Urban Institute’s Robert Wood Johnson Institute indicates. According to the study, middle and working class Americans that buy policies through the Obamacare exchanges could end up spending up to 21% of their income for health insurance.

Some of the disturbing facts about Obamacare in the study, which is entitled How Much Do Marketplace and Other Non-group Enrollees Spend on Health Care Relative to Their Incomes?, include:


  • Ten percent of those who make less than 200% of the federal poverty level (about $48,500 a year for a family of four) would end up paying around 18.5% of their income on health insurance and out of pocket medical costs. That adds up to $8,972.50 a year.


  • Around 10% of those who make between 200% and 500% of the federal poverty level between ($48,500 and $121,250 a year for a family of four) will end up paying more than 21% of their income on premiums and health care costs. For a family making $48,500 a year, that would come out to around $10,185 a year.



  • Those who most need health insurance including persons in fair and poor health and those over 45 are most likely to pay more for insurance under Obamacare.


Note: the federal poverty level is currently $11,770 for individuals and $24,250 for a family of four, according to

How Obamacare Impoverishes Americans

Some even more damning information was revealed by a recent CNBC article. Some of CNBC’s findings include:

  • Knoxville, Tenn. insurance broker Kevin Broyles saw his health insurance premium nearly double from $639 a month to $1,161 a month because of Obamacare requirements. Broyles estimates that health insurance now eats up 14% of his family’s income. Broyles complained that his family has been forced to eat Ramen noodles to pay for health insurance and noted bitterly that he pays taxes to support a single-payer health insurance system Medicare he cannot participate in because of his age (63).


  • Ohio retiree Tom Thomas, who makes just $24,000 a year, saw his health insurance costs increase from $68 a month to $179 a month. For $179 a month, Thomas gets less coverage than he did for $68 a month because he had to choose the cheaper option. Had he stayed with his old plan, Thomas would have $252 a month, even with an Obamacare subsidy. Thomas estimates that he now spends around $1,920 a year, or 8% of his annual income, for health insurance.


These findings indicate that Obamacare is a very lousy deal for many average Americans. Large numbers of people will either simply go without health insurance, or worse, be forced to take a job they do not want simply to get “health insurance coverage.”

Sicker and older people may simply choose not to work and let their incomes fall to a level where they can afford Medicaid in states that it expanded in. In states like Colorado, Medicaid is actually a better deal than Obamacare because there are no premiums and out of pocket costs are lower.

Obamacare could also be a major drag on the economy because large amounts of money that should be going to consumer spending is now being diverted to “health insurance premiums.” When people have less money, they spend less, which means fewer jobs and even more poverty and income inequality.

The Obamacare Exchanges are a Dismal Failure

Neither CNBC nor the Urban Institute said why the premiums are increasing. One reason is that there are fewer choices on some Obamacare exchanges. Obamacare plans in several states, including Colorado, have collapsed because of inadequate funding.


To make matters worse, America’s largest health insurance company, UnitedHealthGroup (NYSE: UNH), is considering pulling out of the Obamacare marketplaces in 2017 because of losses it is taking on those policies, Motley Fool writer Sean Williams pointed out. If that were to occur, there would be only one insurer on the marketplace in my area, namely Anthem (NYSE: ANTHM). Obamacare could give one company a monopoly in violation of the Sherman Antitrust Act.

Williams noted that United Health is about to pull out because the risk corridor, an Obamacare mechanism designed to fund health-insurance policies for the sickest patients, does not work. The risk corridor is supposed to use premiums collected from healthy people to cover premiums for the sick.


The problem is that insurers in the Obamacare exchanges are paying out 103% of what they take in to cover claims. That means the insurers are losing money, which means they either have to pull out or get a federal bailout, around $2.5 billion, according to Williams.

Such a bailout is politically impossible because Republicans who hate Obamacare and want it to fail control both houses of Congress. Since next year is an election, Republicans have a strong incentive to block such a bailout, it would make Democrats look bad.

Another option would be to substantially increase premiums, which would make insurance unaffordable to millions of Americans. That, of course, defeats the purpose of Obamacare, which is officially called the Affordable Care Act. This name is becoming a very bad joke for millions of Americans.

Williams reveals that the Obamacare exchanges are a dismal failure. They have not achieved their goals and could soon make things far worse.

Obamacare Exchange Collapse could lead to Single Payer Health Insurance

My prediction is that we will see more exchanges collapse and more calls for Single Payer (government run) health insurance. It is no coincidence that a measure calling for the creation of a state single-payer system is already on the ballot in Colorado, one of the states where Obamacare plans have collapsed.

One beneficiary of this state of affairs is clearly presidential candidate and U.S. Senator Bernie Sanders (I-Vermont), an outspoken advocate of single payer health insurance. Sanders scored some major points at the Democratic debates on Dec. 19 by bringing up the subject.

Obamacare has once again failed spectacularly, and its apologists in the media have not noticed. I have to wonder how long can these fools keep publicizing their fantasies until everybody else realizes that their emperor has no clothes. One problem is that most of those Obamacare supporters are highly paid journalists that receive health insurance through their jobs, so they don’t have to participate in the atrocious system they want to inflict upon the rest of us.

My prediction is that Obamacare will collapse completely by 2020, forcing the United States to go to total single payer health care whether we want it or not. Since America already has a single-payer health insurance system that only covers part of the population, that will not be as great or as wrenching a change as many people think.