For 2016 Millions will get coverage, and cost assistance will help ease the impact of rate hikes, yet millions will be left uncovered due to the Medicaid gap.

Let’s take a quick look at 2016 coverage, rate increases, the Medicaid gap, and how this will all affect enrollment numbers and opinions of the ACA in 2016.

• Open enrollment 2016 goes from November 1st, 2015 to January 31st, 2016. During this time people can renew plans, adjust cost assistance, and enroll in new plans too.
• Anyone who misses open enrollment will have limited options for private coverage in 2016 and will owe the fee for each month they go without coverage or an exemption.
• All Americans who make between 100% – 400% of the poverty level can get cost assistance on coverage.
• Cost assistance caps the amount you can spend on premiums and out-of-pocket costs, ensuring that Americans get affordable coverage despite rate increases (ie. it doesn’t matter how much a rate is increased, the amount a person, not tax payer, can spend is capped by the poverty level).
• Unfortunately for those without cost assistance, despite new ACA rules deterring insurers from price-gouging, insurers in some regions are jacking up rates by double digit amounts or more. This hits small businesses and those just over the 400% poverty level the hardest as they lack the excess capital, but in some instances have to comply with the mandate. (They can still qualify for other exemptions, like exemptions based on income or for small businesses number of employees).
• Even more unfortunate than rate hikes for the 400% plus middle class and small businesses are the lack of options for millions of Americans who fall in the Medicaid Gap caused by the GOP’s anti-ObamaCare anti-safety net ideology.
• The Medicaid Gap is a term that describes the lack of coverage for single adults making less than 100% of the poverty level in 20 states (which rejected 100% funding until 2020 and 90% after 2020). This will leave millions without coverage, based on income and not on assets or if they work or if they have worked in the past and are now too sick to work.
• Funnily enough, in Massachusetts where they have RomneyCare (essentially ObamaCare with a different name), and in some other states that support the program, Medicaid is one of the best coverage types you can have. We will actually get complaints about private insurance (in regard to costs and doctor availability) in Massachusetts but get raving review about Medicaid.

The takeaway, if you make between 100% – 400% of the poverty level you are in a good space under the ACA. In many states you are going to get an affordable premium (and we advise choosing a plan with affordable cost sharing too). If you make less than 100% of the poverty level and your state expanded Medicaid, you are in a really good spot. If you make less than 100% and your state didn’t expand, our hearts go out to you (hopefully the next person you elect will be more caring). If you make just over 400% and your state has high priced premiums, we feel for you too, make sure to shop smart, use HSAs, and look into all of your options including exemptions.

Whatever you do, make sure you get coverage, update your plan, and make sure the plan and cost assistance of your choice is in order before renewal and plan drops take place on December 15th, 2015.

A simple summary of the Martin Shkreli scandal, price-gouging, big pharma, profits off essential healthcare, and what we can do about it.

Profit creates competition on a good day; on a bad day a 32 year old ex hedge fund guy under investigation hikes an AIDS drug from $13.50 to $750 to profit off the sick and taxpayers. The worst part? He is just doing what the other guys are doing.

This event raises the question: How do we avoid price-gouging on taxpayer subsidized items, and how much profit and regulation belongs in drugs and treatments for chronic illness?

Summary of the Price Gouging CEO and the Implications for Big Pharma and US HealthCare Policy

There are a lot of issues involved, so what we will do is provide a quick bullet-point list of what you need to know to understand everything from the man to the issues behind his actions and the implications.

Who is Martin Shkreli and Why is He the Most Hated Man on the Internet in late November 2015?

• The New York Times reported that 32 year old Martin Shkreli,  founder and chief executive of Turing Pharmaceuticals, raised the price of the drug Daraprim to $750 a tablet from $13.50. Get the story.
• Price Gouging is when a seller prices goods or commodities much higher than is considered reasonable or fair, due to a a demand or supply shock. In this case it was demand, not supply which caused the unreasonable increase.
• Martin Shkreli is currently under investigation for all sorts of .01% shenanigans, which involve things like profiting off of the suffering of his fellow Americans and turning a profit from their illnesses into his own financial success. His attitude can be seen in a series of Tweets, which may be paraphrased as “you hate me cuz you ain’t me bro, check out this bling I bought off the back of human suffering”. Read the Tweets.
• The now dubbed “most hated man on the internet” is actually already under investigation for shady activities. These activities appear to be connected to his habit of profiting from shorting Biotech companies. Shorting involves selling shares you don’t actually have. It’s legal, and you have to “cover” your sake by replacing the shares in a fixed time period. If you think the shares you buy will go down in cost, there is money to be made by the difference between the high and low prices. In plain English that means he tries to sabotage drugs whose stock he has bought in order to bring the price down. If he can do that, he can profit (by covering his position) while everything is crashing. There is lots more to it, and you can read about why he is being investigated here.
• It’s worth noting Shkreli has done this thing before with a drug that treats kids with kidney disease, this sparked an article titled “predatory capitalism on the backs of the sick and silent“. Learn more about price-gouging on kids with kidney disease here.
• When confronted by the 99.99% including everyone on Social Media, journalists, and Politicians, Martin Shkreli defended his position by saying the drug was underpriced and that most people wouldn’t pay the full amount. The thing is, the reason people won’t pay the full amount is that tax payer dollars pay for it either through write-offs or through subsidization. So, in another words he justifies himself by saying that he isn’t stealing from AIDs patients as much as he is from tax payers. (Although in reality many AIDs patients will end up paying the high costs, or not having access to the treatment as a result of the base cost).
• Of course Martin Shkreli isn’t the only one exploiting the current healthcare system to profit from taxpayers and those needing healthcare. Instead, he follows a long line of companies that, rather than letting profit incentivize innovation, have been buying up known drugs, repurposing them, and jacking up rates. This does not lead to innovation, but raises the price of healthcare entirely for individual gain. Under ObamaCare, that means increasing the price of everyone’s already high premiums and deductibles and costing taxpayer dollars through subsidization, Medicare, and Medicaid. Essentially cheating the 99.99% in favor of the .01%, and increasing federal debt while hurting the middle class. Learn more in another Times article.

How Does this Relate to Policy?

• On the same day all this news broke (at this point it has been less than 48 hours) the house GOP released a budget that repealed ObamaCare and cut taxes on large businesses (like those who profit off of drugs that treat chronic illness). Not only could this budget shut down the Government like it did in 2013 when it costed the economy an estimated $20 plus billion, it also leaves the door open for more price gouging and profiting from essential drug treatments.
• In light of all of this both Bernie Sanders and Hillary Clinton confirmed their positions on healthcare. While they have very different views, both address moves to prevent price gouging and profiteering from essential healthcare treatments.

How Does This Relate to the Market?

In light of all of the above, pharma stocks took a bit of a hit. This most likely made Martin Shkreli a little extra in capital gains that he will not pay the same tax rate on that the 99.99% pay. The GOP budget would cut his tax rate even further all while removing the little regulation the ACA does put on essential phrama.

How Does This Relate to ObamaCare?

• ObamaCare may tax drug companies, but it does little to stop insurers, drug makers, or providers from profiting from an unsustainable taxpayer-fueled healthcare system.
• We are currently in a debt crisis due to a rising deficit, and this is actually primarily due to healthcare spending. This was true before the ACA, and remains true after the ACA. The Republicans want to solve the problem by repealing the ACA (ignoring the CBO’s warning that this would make things worse).

What Do We Do About Price-Gouging and Profits off Taxpayer Dollars and Essential Health Treatment?

This brings into question, at what point does profit hurt things like essential health treatments rather than help. Sure profit creates competition on a good day, but with so many bad days for the average American, at what point do we address the fact that we are collectively heading toward un-payable debt over treating diseases like cancer. Who can argue that a 62 year old drug’s price being jacked up 5,000% has anything to do with innovation?

An Answer

One answer, and the answer we find the simplest, is similar to that found in England, Canada, and many other countries:

Medicare-for-all single payer system. All essential treatment and drugs covered. Strict regulation on essential drugs and treatments. Supplemental coverage is handled by the private market and so are non-essential drugs and treatments. Regulations focus on creating incentives for innovation and preventing excessive profits and speculation with tax payer dollars. Maybe we could also simplify the tax code and address the treatment of capital gains taxes. I would like to see this country make everything a little more fair when it comes to healthcare essentials, and let the free-market thrive at what it does best, healthy regulated competition in a demand driven market.

ObamaCare is a law; the law contains subsidies based on household income. Whether this is a handout or not depends upon your definition of handout.

1. Do you define handout as: something (such as food, clothing, or money) that is given to someone who is in need of it?
2. Do you define handout as: a giveaway of taxpayer money to lazy people who refuse to work?
3. Maybe you define a handout as: a giveaway of taxpayer money to corporations to ensure profits for shareholders and CEOs?

Perhaps you feel that the ObamaCare is only one of these things, some of these things, all of these things, or none of these things. Maybe you define “handout” in a different way altogether. Unfortunately the meaning of the word “handout” is a a broad one and open to many interpretations.

Instead of trying to argue semantics, let’s look at some facts that could help us better understand the subsidization part of the ObamaCare.

Facts on Cost Assistance and ObamaCare

Cost assistance is only a very small part of what ObamaCare does, the majority of the law is composed of regulations on the healthcare industry and consumer protections.

Cost assistance is one of the most contentious points of the law. Let’s look at some facts on how this assistance really works.

• To claim tax credits you must claim between 100% – 400% of the Federal Poverty Level in household income on your taxes ($11,770 -$47,080 for an individual or $24,250 – $97,000 for a family of 4 in 2015). You cannot be in this position unless you work, file taxes, and your employer doesn’t offer health insurance.
• In order to claim Medicaid, in a state that expanded Medicaid under ObamaCare, you must prove your income is 100% of the poverty level or less and file some fairly complicated forms. If your state didn’t expand Medicaid, and you don’t have children, then most adults will have no access to Medicaid. The reality is that a large portion of our nation is comprised of people who work hard but aren’t making enough money to buy health insurance, or will make less this year than they did in the past. Often single mothers or those temporary out-of-work use Medicaid as a safety-net, allowing them to break out of poverty.
• The Median income in the US in 2012 was $51,017. Based on that fact, the above information on the federal poverty level, and the fact that ObamaCare expanded employer insurance, we can see that actually the majority of Americans qualify for some type of cost assistance under ObamaCare. I believe that few people would argue that most Americans are lazy, especially when half of us get some kind of help subsidy in paying for healthcare, and many of the rest have health insurance costs included in their wages. Remember cost assistance through the Marketplace, Medicaid / CHIP, and employer coverage all counts as cost assistance. If you are working and receive health insurance through your employer, remember that employer coverage is subsidized by tax breaks for insuring employees. Those tax breaks use tax payer money, just as direct subsidies do.

This chart shows how a large portion of our population is claiming some sort of income after taxes (which implies that they currently work or have worked in the past). Yet it also shows their after-tax income is so low their is no way they could afford to insure their families without assistance.

A Story About a Hardworking American Who Needs a “Handout”

Imagine this scenario of a hardworking person who suddenly needs a “handout”:

You’ve worked hard your whole life. You support your family of 4 working for your own contracting company. You are 55 and you plan to work until 65 at which point you’ll get on Medicare and consider retiring, maybe.

You’ve saved $100,000 cash, $50,000 in a 401k, and have a $300,000 house with only $50,000 left on your mortgage.

Surrounding your house is a white picket fence, your Golden retriever is running around outside and your 20 year old and 19 year old are back from College (which you are paying for in part).

The news is on, and you curse the poor people for taking all your tax money via ObamaCare, the big Government giveaway. You proudly have have forgone health insurance because you have money and will simply pay out of pocket if need be. You’ve done this for years and it’s saved you a good $50,000 from that alone. You are healthy, always have been, and don’t go to doctors often.

Now what if you have a heart attack. You ignore the first symptoms, but your body fails you, and you slip out of consciousness. While you were out you were airlifted to the hospital and the proper procedures were done to save your life.

While you recover, you can’t work and since you own and run your business, this is a problem. The bigger problem is that the hospital costs are going to run you about $50,000 this year (That is your savings over the past years gone in one instant).

You won’t be able to work during the peak season this year, that is going to cost you another $50,000. The airlift alone was $20,000 for some awful reason (if only you could have said no!). Well that is $120,000. There goes the bulk of your savings account, and now you can’t pay your mortgage. You could sell off the house, but that isn’t practical. If you don’t pay your mortgage the house isn’t yours to sell.  You empty your 401K at a penalty to pay off everything. Your children switch to community college and boost their hours at McDonalds (at $7.25 an hour) because they can’t afford their tuition without your help.

Next year the costs of the heart attack are still adding up, you have fewer clients and workers because you can’t fullfill your contracts and provide employment due to last years heart attack.

Due to all of your loses, you were able to deduct those medical bills, and that left your taxable income at zero. Well that is a break because those 30% plus taxes were awful. Zero is much better.

Here is where your life can go from rough to ruined: You live in Texas and they are one of twenty states who are currently refusing to expand Medicaid to single adults (if you had children under 18 in Texas, there would be help, but you don’t).

Due to your annual income, you find yourself without affordable access to healthcare or health insurance. You make too much for Marketplace cost assistance, too little to afford coverage out-of-pocket, but are too well off to have access to Medicaid in Texas.

Then you feel chest pains again, this time the medical bills will be un-payable. The chances that you keep your house fall to near zero. After you are beat down hard enough and have nothing, some of the other safety nets may kick in, but that is too late. Getting back to contributing to society is going to be a long hard road for you and your family. Hopefully your children make it through community college, because Texas won’t be embracing a minimum wage increase anytime soon.

FACT: Every year, at least 1.5 million Americans suffer heart attacks.

The Conclusion

This isn’t the Oregon trail, this is real life. In real life accidents happen and insurance acts to protect us against unaffordable costs. With the rising cost of healthcare, most people can’t afford a heart attack or a car accident unless we have insurance. We all need health insurance even though many of us can’t afford to pay the full cost of it.

The Affordable Care Act was supposed to solve all of this by expanding Medicaid and offering cost assistance. Since so many states rejected aspects of the law, and the cost of coverage continues rising, many people are not getting the coverage that was envisioned by the original draft of the law. The story above may just be more common than we all want to admit.

Sometimes the 1% of most wealthy Americans get privileges that the rest of us feel we ought to have; sometimes tax payers give “handouts” to lazy people without wanting to. As much as we would like to believe our country is fair, “fairness” is a goal we strive for, not a right.

As times become harder for most of us, we need an insurance safety-net. We as a country need to keep as many of us as possible contributing to society rather than being ruined by the cost of living.

A woman put a public facebook post up about a BCBS plan in Alabama. Is this an ObamaCare problem, an Alabama problem, an insurer problem, or something else?

A Summary of the Answer

ObamaCare (ACA) sets minimum standards for health insurance in regard to cost, coverage, and network. If a plan isn’t honoring these rules we need to look at the insurer and the state insurance board, not the Affordable Care Act alone.

The woman in the video above does not make any specific point related to the law, but does express a frustration that many people have which is some regions flat out discriminating against insurance purchased on the Marketplace and high drug prices. We post about these regularly on our website and facebook page. In fact, further drug coverage reform was an issue we tackled yesterday on our facebook page before even seeing this woman’s post.

If we look at the benefits, rights, and protections offered by ObamaCare it is very clear that it is meant to help, but the anger the woman has toward subpar drug coverage is simply another sign that further reform (not less Government intervention as the video implies) is needed.

That law greatly improved consumer rights and protections in healthcare, but with so much misdirected anger one is left to wonder, “Does discrimination against the Marketplace and Medicaid at a state level detract from the conversation about what ObamaCare really does to reform healthcare?”

As an independent blog that has been focused on ObamaCare every day since 2012, we can confidently say that the ACA is trying to address the spiraling healthcare crisis that leads to stories like this.

The ACA is not the cause of the problem. The simple answer is that more reform is needed, especially when it comes to the pharmaceutical prices, narrow networks, and discrimination against low cost marketplace health plans. We hope that even if what the video above says resonates with you, you take the time to understand what the ACA is trying to do to fix the problem and what areas of healthcare need more focus.

Taking a Closer Look

As the video is going viral we felt we had to take a look at the public posts that the woman has shared. The first things that strike you is that she works in healthcare, she is from North Carolina (her mom is from Alabama), she is very religious (in what seems like a happy loving way), and she is a supporter of the VA.

Although her focus is more on God than against the Government and Obama, she does say things like, “Coming out of slavery, God sees it all, even President OBAMA!!” and “I am soooo Maaaddddddd! This CANNOT continue. We’ve got to take THIS GIANT down(insurance/government)!!! Obamacare is making people sick, killing people.”

The thing is here ObamaCare is a program that cares for the sick and the poor and is brought to you by the same we the people that run the VA (i.e. the Government). She is a big supporter of the Military (which is again, the Government).

The frustration she expresses is resonating with people, but we shouldn’t confuse this with an effort to repeal ObamaCare or to push for small government (specifically the Republican version of small Government). It’s worth noting that her and her Mom live in states that don’t embrace ObamaCare and tend to support Republicans who weaken the law on a state level. They also include weaker Medicaid programs and more doctors who discriminate against those with “ObamaCare” coverage and different laws for how insurers can operate on a state level. All of this can lead to a slightly less favorable ObamaCare experince in some states.

Really what she is saying over and over again is that people matter and that we need to care for them. Yes, she is right, that is what the ACA is supposed to do. That is what states who have refused to expand Medicaid and refused to fund efforts to care for the sick and our countries poorest have done.

We have to remember to look beyond on the law and look at the legislators if we are angry about health reform not doing enough for those who need it the most, or if we have too many hand-outs to insurers, and too much burden on the average American.

If you put Bernie Sanders in charge of writing a healthcare law, you would have the drug problem fixed and the uninsured problem fixed. When you put right-wingers from Alabama in charge of writing a healthcare law you get hand-outs to businesses and lots of uninsured. When you put them all in a room and a hundred years later a law finally comes out, you get the Affordable Care Act.

We need to be grateful for what we managed to accomplish, and work harder to make sure we get more. We need to be grateful 17 million are covered, out-0f-pocket cost assistance is an option, the Donut hole for Seniors drugs is closing, and that it is illegal for insurers to sell “junk insurance”.

If you think the takeaway from this frustration is repeal ObamaCare and vote for Bush again, you probably need to take another look at what the law really does and what the GOP actually wants.

Please read the summary of the ObamaCare’s provisions and take some time to learn about the benefits, rights, and protections in the law.