When Obamacare was passed six years ago (in 2010), even though it was by a very slim margin, there were many who were sitting the fence, hoping that the promises would actually pan out.

As of late March, 2016, it doesn’t look like it. In her Marketwatch blog, Diana Furchtgott-Roth reported on “7 Obamacare failures that have hurt Americans,” and it’s a rather bleak picture.

The biggest promises made by President Obama: “Under our proposals, if you like your doctor, you keep your doctor,” just haven’t happened. The Wall Street Journal reported that “Insurers Face New Pressure Over Limited Doctor Choice.” The President also promised that “If you like your plan, you’ll be able to keep it.” However, Nebraska Senator Ben Sasse released a report this year that shows how the choice of insurers and plans are not what was promised.

But what made me, an advocate for sound financial principles, take notice, is the fact that under the Affordable Healthcare Act (the official name for Obamacare), both the annual health-care insurance premiums and the deductibles have skyrocketed.

The President claimed that annual insurance premiums would decrease by $2,500 a year. Instead, they have risen, anywhere from 10% to 40+%.

Furchtgott-Roth noted that “young men were particularly hard hit. Average premiums rose by 49% from 2013 to 2014, the year Obamacare was supposed to go into effect.”

But it’s the high deductibles that have me concerned. After spending thousands more a year for the actual insurance, families also have to spend thousands of more dollars on the deductible. According to Furchtgott-Roth, The New York Times reporter Robert Pear wrote that one Chicago family of four paid $1,200 monthly for coverage yet had an annual deductible of $12,700. This means that this family has to pay $12,700 out of pocket for their medical care before their insurance kicks in. The title of Pear’s article pretty much says it all: “Many Say High Deductibles Make Their Health Law Insurance All but Useless.”

Pear says that either people have insurance but “can’t afford to use it,” or they drop their policy because the costs are too high.

We could debate the political issues that surround Obamacare all day long, but that’s not going to get us what we really need: health care. When we’re sick, we want to know we can go to the doctor and not worry about how we’re going to be able to pay for it. For now, Obamacare isn’t going anywhere. So, even when something isn’t ideal, it’s important to look for positive ways to handle the situation.

This is where saving money comes in. Americans as a group generally aren’t the best savers. So when we’re stuck with a high bill—like a high insurance deductible—we might pay for it with a credit card. But that just leads to more debt, which brings more stress, which potentially causes more health problems. This isn’t an ideal solution.

Raiding your retirement qualified plan accounts like 401(k) could be very costly. If you’re not at the mandated 59 ½ years, you will be charged a 10% penalty. You will have to pay taxes on the money you withdraw, and if your funds are in an equity account, you risk taking money out when the market is down (and it’s been going up and down like crazy the last few months). This gives you a double whammy called “sequence of returns.” You’re taking money out, which lowers your balance, and you’re earning less because of a down market, so you’re taking a bigger hit than you would if the stocks your money is invested in are doing well.

You may have “rainy day” money in CD’s, but if the CD hasn’t matured, you risk the penalty for early withdrawal. For many, the only option left is a savings account. But once that money is spent, it’s gone. It’s not earning any more interest.

However, what if you knew there was a way to save your money in such a way that it could:

  • earn a competitive rate of return in a tax-favored environment,
  • but instead of being penalized by taking it out, you could access it whenever you wanted
  • and you could do so in such a way that you would still have the possibility of making interest on the money you’re using to pay for that high health-insurance deductible.

You might find that somewhat interesting. Right? It’s called permanent life insurance—the kind that I advocate for is Index Universal Life insurance. I don’t talk about my book My Family Financial Miracle in my blogs, but if what I just said is interesting to you, I invite you to check out what I have to say about this kind of life insurance at www.MyFamilyFinancialMiracle.com.

I don’t like to see people wondering how they’re going to pay their deductible when they’re sick and need to go to a doctor or the hospital. That’s just not right, and I would be remiss not telling you about what I know. The possibility of a workable solution to the problem exists.

To your good health and peace of mind,

Merle Gilley

 

 

http://www.marketwatch.com/story/7-obamacare-failures-that-have-hurt-americans-2016-03-24

http://www.wsj.com/articles/SB10001424052702304450904579365373011903340

http://www.sasse.senate.gov/public/_cache/files/b091dd97-f3f6-4b6e-8a3c-f95171768dcc/competition-and-choice—a-report-on-the-aca-s-2016-exchanges.pdf

http://www.nytimes.com/2015/11/15/us/politics/many-say-high-deductibles-make-their-health-law-insurance-all-but-useless.html?_r=1

http://money.cnn.com/2015/03/30/pf/income-saving-habits/

http://www.bankrate.com/finance/taxes/how-are-401k-withdrawals-taxed.aspx

http://www.reuters.com/article/us-global-markets-idUSKCN0WX00I