Every American Owns Stock in Health Insurance Companies


If Every American Owns Stock in Health Insurance Companies, where’s my dividends?

First you should read this story (click here). In a nutshell, it describes how McDonalds and Walmart are using Government subsidies to fund their business. Now stop and think of how Obamacare is going to change the financial model for health care plans.

Obamacare supports two types of subsidies:

  1. Medicaid projected to be 7 million new people
  2. Tax credits expected to reach 17 million people

Let’s look at a simple financial model:

My annual health care premiums (not counting deductibles) – $6,600. I don’t qualify for any subsidiary as my income is above 400% of poverty ($46K).

Let’s take a look at someone else. Assuming their policy would also cost $6,600 and they qualify for a subsidy, they may only pay $2,000.

Who pays the other $4,600? You and I!

So I get the concept of the program: those who work hard at making “money” pay for those that are content making some money. What I don’t think anybody has realized is the net effect of this transfer of money. Though my income tax, I pay the Government. The Government then takes our money and pays the health insurance company’s.

As the link in the first sentence explains, large corporations have learned how to generate a profit off Government subsidies. The exact same is going to realized by health insurance companies.  a certain percent, and I propose more than 20%, of their income will be guaranteed month after month, year after year by the United Stated Government. (I’m going to leave the research on this to the experts who have a full time job looking at numbers.) When a single customer generates more revenue than than the net profit of the company, the company would obviously fail if they lost that customer. Once Obamacare has 1 full year of operations, health insurance company’s will be “to big to fail”.

Not only has Obamacare changed the marketplace (forcing everyone of us to pay for insurance for medical procedures we’ll never use), but it is also changing the monetary policy of a major industry. Health insurance company’s don’t have to be innovative. There is no motive to improve. There’s no reason to become efficient.  Customer service will certainly become agonizingly slow. Obamacare has effectively created a new Government agency, and no one seems to care but me.

 

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