The real threats to Obamacare

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May 29, 2015 by Tony Novak

Many news reports focus on the coming Supreme Court ruling as the possible determinant of the future of Obamacare. I think the court decision will be a yawn.

But there are far more significant news stories developing that could unravel ACA as we know it:

Spiraling premium rates ahead – the rate increases requested by some insurers in some state exchanges would be far beyond what we describe as “shock rate increases”.

Ridiculous overhead costsHeath Affairs new report is significant, IMO, in exposing “the $270 billion in new costs, for both private insurance companies and government programs, will be “over and above what would have been expected had the law not been enacted,””. This new administrative spending appears to be unsustainable.

Big excise tax penalties for many employers ahead – IRS threatens to begin enforcement of severe excise tax penalties after June 30 for employers who reimburse employee health expenses without directly integrating such arrangements with an Obamacare employer-sponsored group insurance policy. I’ve estimated that easily more than 100,000 employers could be affected. No doubt the threat of penalties of $100 per employee per day – possibly asserted retroactively back to January 1,2014 – would have political consequences. (I’ve written several articles about this; the latest earlier today).

My guess is that one or more of these will cause serious trouble for health care reform as we know it today.

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