Did California Just Expose a Major Flaw in Obamacare?

Excited or not, the Patient Protection and Affordable Care Act, also known as Obamacare, is set to be fully implemented in just six months and one week. Targeted at revamping our entire health care system, it will mandate individuals to carry health insurance and require that health-benefit providers are spending at least 80% of premiums collected on health care for its members.

In addition, this new health reform aims to keep the inflationary costs of premiums reasonably low as health insurance exchanges that are being set up in each state should allow for competitive and transparent pricing. The idea here is that having more pricing visibility will allow consumers to make smarter choices when selecting their own health insurance. But, as California showed us yesterday, there could be a major flaw with that thesis.


Source: White House. 

Don't call us, we'll call you
With few states having unveiled detailed plans for their state-run insurance exchange, all eyes were focused on California, which offers quite the blend of individual and commercial customers, as well as a number of soon-to-be Medicaid participants under the PPACA's Medicaid expansion. Yesterday, California unveiled the 13 contract winners who will be participating in its insurance exchange in the coming months. There were some very familiar on the list, including Kaiser Permanente, Blue Shield of California, Anthem Blue Cross -- which is run by WellPoint (NYSE: WLP  ) , the nation's second-largest health insurer -- and Health Net (NYSE: HNT  ) , which collectively make up a big portion of California's individual insurance market.

However, notably missing from the list were UnitedHealth Group (NYSE: UNH  ) , CIGNA (NYSE: CI  ) , and Aetna (NYSE: AET  ) , which all kindly bowed out of being included into California's health insurance exchange.

When questioned about not wanting to take part in California's insurance exchange, according to The Los Angeles Times, UnitedHealth commented, "We are simply taking the time to carefully evaluate and better understand how the exchanges will work to ensure we are best prepared to participate meaningfully in their development." Similarly, a CIGNA spokesman was quoted as saying, "We will continue to offer individual plans going forward [in five of 10 states], but we've decided not to participate in Covered California in 2014."

On the surface this may not appear to be a big deal since UnitedHealth, CIGNA, and Aetna combined for only 7% of the total health insurance market in 2011 according to research compiled by Citigroup, and are focused primarily on the commercial side of the business. But, the message that these three large insurers are sending California is much more important.

Here's the problem
For one, with UnitedHealth not participating, it tells me that even the largest insurer in the nation is still very skeptical as to how things will play out in these insurance exchanges. California offers a moat of possibilities, but it's simply not worth the price of admission based on UnitedHealth's decision. A lack of a large national insurance presence in California's exchange is only bound to increase the mounting skepticism over how effective these exchanges will ultimately be in manufacturing competition among insurers. Even more so, a lack of recognizable health insurance names could diminish consumer interest in researching these health plans, which would defeat the entire purpose of setting up the health exchanges.

Perhaps the bigger concern here is that a lack of competition from rivals who are big enough to make a difference -- no offense given to the remaining nine plan participants -- could cause pricing power to clump into the hands of the aforementioned "big four" in California, including WellPoint and Health Net. Some would point out that this could be a good thing, which may result in savings due to less competition. Alternatively, these insurers are under no obligation to pass those savings back to plan holders. So while the costs of competition are dropping, those plan premiums won't necessarily be going any lower.

Onward we march
As I've been saying for weeks, there is really only one certainty when it comes to the implementation of the PPACA -- and that is that we really don't know much.

People are certainly going to remain skeptical about how effective Obamacare will be at controlling costs; and California's inability to draw national insurers to the plate in the individual insurance market is only going to heighten those fears in the interim. However, there are multiple benefits to the bill that can be brought to light that we've discussed previously, including the medical loss ratio cap of 80%, which ensures plan members get the care when they need it.

I'm sure there are still plenty of questions yet to arise with regard to Obamacare. The good news is that in a little more than six months we'll finally have some answers.

Obamacare will undoubtedly have far-reaching effects. The Motley Fool’s new free report, “Everything You Need to Know About Obamacare,” lets you know how your health insurance, your taxes, and your portfolio will be impacted. Click here to read more. 


Read/Post Comments (82) | Recommend This Article (28)

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  • Report this Comment On May 24, 2013, at 3:16 PM, malawny wrote:

    This is the Republican idea of health reform. It is their plan, but they complain about it. None of these problems would exist with a single payor. Medicare works fine without insurance companies.

  • Report this Comment On May 24, 2013, at 3:24 PM, johnnya2 wrote:

    What a ridiculously biased article.

    So 13 companies are competing, but in YOUR mind only 4 will be? Why is that? Oh thats right, because another group that holds SEVEN per cent of the market decided not to participate? Give me a break. If the Big 4 decide our rates will be $100 per month more than the "little 9", what planet do you live on that says the big 4 will continue to dominate? Have you seen auto insurance? If I get a quote now, I could get 15 different rates from 15 different insurers. When I told my last one I planned to leave them for a better deal, magically my rates were lowered.

    Yes, in some states (like Florida) insurance companies choose not to be involved in home owners, or auto insurance, but guess what, there is still coverage available there.

  • Report this Comment On May 24, 2013, at 3:30 PM, Rocky75 wrote:

    I think the author makes a erroneous assumption that people CARE which insurance company they have.

    I have had UHG in the past - they denied our claims and told us to sue them if we didn't like it. And it was a simple medical claim.

    As far as I am concerned, smaller company could do no worse. I view health insurance as a commodity - like gasoline - it all comes from the same refinery, so what is the difference?

  • Report this Comment On May 24, 2013, at 3:31 PM, DannyAlves wrote:

    "For one, with UnitedHealth not participating, it tells me that even the largest insurer in the nation is still very skeptical as to how things will play out in these insurance exchanges."

    UnitedHealthcare does not currently have individual plans available in CA. Their not being in the exchange has nothing to do with being "skeptical"., they just have no products to offer in this market.

  • Report this Comment On May 24, 2013, at 3:35 PM, Riccardo18 wrote:

    This will fall apart just as social security. Placing seniors and politicians on the backs of the young people will allow for systemic abuse, where the cost will not longer be subsidized by a less financially capable gov't.

  • Report this Comment On May 24, 2013, at 3:41 PM, P51Mustang1256 wrote:

    Malawny, you must be the only person on the planet who calls obamacare the "Republican plan". The federal government pays doctors who treat Medicare patients. The feds keep dropping the reimbursement and have reduced it so much that some doctors are no longer treating Medicare patients. There will be more that stop treating them because very few doctors went to school to lose money. Medicare is NOT working anymore. It is simply waiting to fail.

  • Report this Comment On May 24, 2013, at 3:42 PM, mdupont99 wrote:

    What the article fails to say is that maybe, because the exchanges are designed to be the last place to buy insurance, employer will continue to provide funded insurance. Three are many employers that have over 50 full-time employees that currently do not offer insurance and when faced with a penalty, may offer group insurance instead of going to the exchanges. Then you have the remaining employers that do offer insurance will probably continue as it still make sense for them. Exchanges by it's flawed nature may not be competitive - look at Mass - employers did not dump coverage. Exchanges in Mass is the last place to buy insurance - even with subsidies.

  • Report this Comment On May 24, 2013, at 3:46 PM, fjfisher601 wrote:

    Dumbest GOP influenced article I've read on the "Fool"- Aetna and UH both have the ;\worst claims paying track record! They will miss lots of business opportunities while Blue Shield, and Kaiser do well. personally, after they wake up, I hope it is too late for them.

  • Report this Comment On May 24, 2013, at 3:47 PM, middlenamefrank wrote:

    Did CA just ignore a major flaw?

    No.

    Why is this stupid article so long??

  • Report this Comment On May 24, 2013, at 3:50 PM, Doughnuts wrote:

    There is obviously a good deal of emotion surrounding this topic and we can only see the "tops of the waves" from outside the actual corporate and regulatory deliberations. However, whether from concern over the risk of opening a new market, concern with regulatory rules, or just general uncertainty with the larger framework of the Act and its impact in California, the market will not include the potential knowledge and innovation of three major national players. Those players have larger laboratories than CA in which to develop new options and solutions and so that must be at least an acknowledged downside to the local market.

    That said, the smaller current marketshare represented by the three players implies less disruption to current options by their absence.

    The article's author presents the balanced view of uncertainty that will almost certainly prevail until enough actual experience emerges through the rating cycle to enable a more informed view of the impacts.

  • Report this Comment On May 24, 2013, at 3:54 PM, alcaw78 wrote:

    http://www.huffingtonpost.com/2013/05/23/california-health-i...

    By and large lower premiums. 13 companies think they can make money this way. I'm perfectly happy for the 4 that can't to sit it out, until they figure it out, especially if it means millions more will have health insurance.

  • Report this Comment On May 24, 2013, at 3:54 PM, aepirson wrote:

    The biggest issues with the health care in the USA is that you have no "system" in place. You have a bunch of highly profitable companies who are not in business to provide heath care but simply to make money on people's illness.

    The health service would not decline one bit if these companies would (have to be) not for profit. Having lived and worked in four countries, I can assure you that the USA is the most expensive service for the least amount of results.

  • Report this Comment On May 24, 2013, at 3:56 PM, fharrison431 wrote:

    I am trying to figure out how they are going to show a profit when they have to send out $0.80 for every dollar taken in. Overhead is usually close to 30% of gross in most businesses. Why would anyone want to participate in this mess? The only companies left will have to cut their customer service departments so much that the customers will be complaining to their congressmen and they will change to the single payer plan.

    So much for health care.

  • Report this Comment On May 24, 2013, at 4:03 PM, doggggged wrote:

    These companies won't participate until they are forced to participate, They are doing well under the current flawed system.

  • Report this Comment On May 24, 2013, at 4:07 PM, Turfscape wrote:

    >>I am trying to figure out how they are going to show a profit when they have to send out $0.80 for every dollar taken in. Overhead is usually close to 30% of gross in most businesses. <<

    80% of PREMIUMS must go toward health care related expenses. Not 80% of gross revenues. Premiums are not the sole source of income for insurance companies.

  • Report this Comment On May 24, 2013, at 4:10 PM, VOLCANOPUKER wrote:

    If you researched stocks as poorly as the 'articles' coming out of Motley Fool and it's corporate expansion lately you would look like a dipstick. UNH is not about healthcare- it is about $$$. It is easy to understand why UNH does what is does but as an investor that knowledge then turns around to show how screwed up the healthcare system is, why UNH and others build castles, and why Obamacare is so desperately needed. Obamacare is not the final or best answer but it is better than the last 15 years of purposefully ignored double digit inflation on my businesses - commodities pricing pass along, fuel pricing and healthcare costs. I have seen this positioning before and the big firms don't want the poor so they can be considered premium in the future. Whatever. That is some bull. Rite Aid is still around and if you been to CVS or Walgreens the difference between the gold and the pyrite isn't that much different to the customer. UNH is more Anthony Mozilo than Joe Mansueto. Reconcile UNH's actions that with Motley Fool used to teach about investing before going big with Time Warner Advertising and tell me if you are in it for a quality company or a quick buck.

  • Report this Comment On May 24, 2013, at 4:10 PM, allinthegame wrote:

    Your blatant bias against this healthcare program is beyond obvious. Maybe if websites like yours took a positive spin this might not be as much trouble as you are hoping it will be.

    Thinks before you write something this banal again.

  • Report this Comment On May 24, 2013, at 4:10 PM, vailrush wrote:

    Your observations add to the nonsense surrounding this matter. Most of your commenters have it right.

  • Report this Comment On May 24, 2013, at 4:12 PM, fwe43 wrote:

    a

  • Report this Comment On May 24, 2013, at 4:14 PM, 2flawed wrote:

    Kaiser is a non profit.

  • Report this Comment On May 24, 2013, at 4:15 PM, logiet wrote:

    What's missing in the article is the effect that ObamaCare is having in driving health care providers out of the market. Some may join hospitals or large practice groups, but many are simply leaving the medical profession or may not accept insurance at all. Rush Limbaugh's experience in Hawaii when he negotiated a lower cash price may be unusual, but more doctors may emulate it. There is a serious risk of a shortage of supply of medical care.

  • Report this Comment On May 24, 2013, at 4:18 PM, starfish36 wrote:

    Medical bills are the largest reason for personal bankruptcies in the USA, yet the wealthiest citizens, who also oppose Social Security, Medicare, Medicaid and probably most other people, sound a continuing alarm about providing medical services to the poor? Obamacare will require people who can to pay a premium, which is more than we get from many poor people at present. Their medical costs are pased on to other patients who can pay -- they justy pay significantly more. So, why get fired up about a reform that is needed? A single payer system would be better; Medicare works beautifully, but we took a bow to Romneycare, and now what we get is Republican sour grapes.

  • Report this Comment On May 24, 2013, at 4:20 PM, doco177 wrote:

    1. Millions are and will lose the insurance Obama promised they could keep. Because ObamaCare forces employers to offer expensive Cadillac plans but also offers the option of paying a fine for not providing health insurance that can be cheaper than providing it, between seven and twenty million Americans are likely to lose their health insurance coverage according to the Congressional Budget Office. The original estimate was closer to four million.

    2. The cost of healthcare premiums is about to further skyrocket. Premium costs have already exploded, but that is a slow-motion explosion. In the near future, we could see costs double or worse. Naturally, these costs will hit an already burdened middle class hardest.

    3. Lost jobs. Lost jobs.

    The Federal Reserve's March beige book on economic activity noted that businesses "cited the unknown effects of the Affordable Care Act as reasons for planned layoffs and reluctance to hire more staff."

    Meanwhile, human resources consulting firm Adecco found that half of the small businesses it surveyed in January either plan to cut their workforce, not hire new workers, or shift to part-time or temporary help because of ObamaCare.

    4. Potential doctor shortages that will mean rationing: The healthcare industry is already a bureaucratic quagmire. ObamaCare is about to add steroids. As the profession becomes tyrannized by government, the talented people currently practicing medicine plan to get out sooner than expected. Who knows how many will choose not to get in.

    Doctor shortages are what lead to the nightmare known as rationed care. Here's an unsettling example already being practiced.

    5. Somewhere around $800 billion in tax increases will hit America's middle class. This added burden will not only further oppress a middle class already reeling from a drop in wages over the last few years, but could damage the overall economy.

    6. Inflation, the cruelest tax on the poor. When businesses get socked with added costs brought about by higher taxes and burdensome government mandates, they pass those cost along to the consumer in the form of higher prices.

    7. Added bureaucracy. Even those Obama lapdogs over at the Washington Post's Wonk Blog are admitting that applying for health care is about to get more burdensome than the byzantine paperwork involved in buying a home.

    8. To cut costs or to avoid having to provide insurance, workers on the economic margins are already losing hours, which means a lower paycheck. There are a million sad stories in ObamaVille; here are just a few of them.

    9. ObamaCare is projected to add $6.2 TRILLION to a deficit the GAO has already declared "unsustainable." That's "trillion" with a "t".

    10. More taxes than currently estimated are likely to hit because of situations like this one.

    Three years ago, Obama, Democrats, and his media lied to us about cutting the cost of health care, being able to keep our insurance, and not taxing the middle class.

    Today, those lies and what ObamaCare is and will do to the working and middle class are the biggest untold story in America.

    The govt becoming more involved in health care is the reason the costs have increased. So...Govt creates a crisis, then provides a solution that comes at the expense of liberty and freedom, costs trillions, and by most accounts won't solve the problem but in fact make it far worse.Corruption, incompetence, disregard of the Constitution, and above all lying are integral to the way that this country is being run.

    Just refuse obamacare..REFUSE..I

  • Report this Comment On May 24, 2013, at 4:26 PM, Pilm wrote:

    United Health care is one of the worst offenders when it comes to cherry picking whom to insure, so it is no surprise they would "bow out", it might hurt their bottom line (which is maximum profit and minimal health care). Hopefully BCBS can make a dinosaur like United Health and thing of the past!!

  • Report this Comment On May 24, 2013, at 4:37 PM, TMFMTHead wrote:

    I have been a Republican my entire life (though I have lately been reconsidering it a great deal lately) yet I say this with all sincerity.

    The biggest mistake in the creation of Obamacare is that there is not a government option. There should be one, and it should return 10% to the government as 'profit'.

    Health care is not like any other 'commodity' out there and our country needs to recognize that fact. All of those against the government option have likely never had to worry about getting sick, having an accident or illness because they did not have health coverage. Twice now I have had enjoyed going without coverage for myself and my family. I am still not covered today and my wife's COBRA expires in two weeks.

    Go without health coverage for six months then come and talk to me about what is the best plan for America.

  • Report this Comment On May 24, 2013, at 4:39 PM, EdHamox wrote:

    ''Fathom the hypocrisy of a government that requires every citizen to prove they are insured....., but not everyone must prove they are a citizen.''

    ''And now, any of those who refuse, or are unable, to prove they are citizens will receive free insurance paid for by those who are forced to buy insurance because they are citizens''.

    ~Ben Stein~

  • Report this Comment On May 24, 2013, at 4:58 PM, DaveNYUSA wrote:

    This president is absolutely killing this nation and even when his one-time supporters realize how bad he is phuqing everyone, they STILL don't have the nuts to do anything about it.

  • Report this Comment On May 24, 2013, at 5:04 PM, shoe53 wrote:

    This actually could be a case where fewer competitors is better. Fewer competitors means more insured lives per company across which the risk is spread. Since the law says claims paid have to be at least 80% of premiums, a lower average claims per insured due to economies of scale results in lowered premiums. . Actually , it seems the more the market is carved up, the higher the premiums can be. IE, Walmart can beat many on their everyday pricing when they have a big market share and seems the same would hold true for health insurance. Is this not logical and sound math?

  • Report this Comment On May 24, 2013, at 5:23 PM, tigerlilly1073 wrote:

    Insurance companies have always been about making the big bucks...if they feel they cannot than they have a problem with any plan set forth..insurance has always been a rip off to the American people...

    Will a national health plan work????...we will have to wait and see...greed has always been the norm...

  • Report this Comment On May 24, 2013, at 5:31 PM, robsheer wrote:

    My God Sean! Do some research before you write yet another useless article. You should be ashamed embarrassed opining all of this speculative conjecture dogma without knowing your facts first, just to get people to your website. Typical of Fools, you're just fear mongering. UHG is not participating because they have NOTHING to offer in California and it costs MONEY for a business to go from nothing to something in market share. Think man! Use your brain and stop writing useless articles.

  • Report this Comment On May 24, 2013, at 5:45 PM, ElBarbón wrote:

    I know someone whose insurance "wellness" program included a blood test at a local hospital.

    The overly-itemized bill with near-incomprehensible line items(fees), written in health-care-speak, showed a cost ("list price") in the "low hundreds" they said; about $200-$400. (I didn't get too nosey.)

    It cost them $35 out of pocket.

    I took a blood test from a clinic that specialized in providing such tests for the uninsured. My blood test and the same report, although it was e-mailed to me, cost $45 cash or check.

    Insurance companies need to get a LOT LEANER.

  • Report this Comment On May 24, 2013, at 5:46 PM, redcheeze wrote:

    Anthem and Blue Shield are both national carriers through their Blue card reciprocal relationship networks.

    United Healthcare has always had a aversion to individual and small group health insurance. They sold there small block of business in the early 90s re-entering the market reluctantly in the early 20s with the purchase of PacifiCare.

    UHC, Cigna & Aetna are small players in both individual and small group insurance in California to start with compared to the Blues and Kaiser which are both part of the exchange.

    Lastly their are 13 players in California not 9 and pricing is level across all similar plans regardless of insurance company.

    I thought it would make sense to at least share with the reader that not only did the author leave out information to help tell his story he also gave you information which is what's the tactful way to put this,... not the whole truth, or not true at all.

  • Report this Comment On May 24, 2013, at 5:48 PM, Kd8dqk wrote:

    Did California Just Expose a Major Flaw in Obamacare?

    Owebama: "No, it didn't. You didn't see anything because there's no news here. Nothing to see. I didn't know anything about it, but if I did it would certainly be Bush's fault. Is that a rabbit over there? No, it wasn't. Do not look over there, there's nothing to see. If there was a rabbit over there it is because Bush made it be there. I don't know anything about rabbits either...."

  • Report this Comment On May 24, 2013, at 5:52 PM, Kd8dqk wrote:

    I guess that pesky Constitution really is unimportant when you're convinced that you're right and everyone else is wrong.

  • Report this Comment On May 24, 2013, at 6:00 PM, brury wrote:

    obama lie machine at work on this comment board idiot obama voters

  • Report this Comment On May 24, 2013, at 6:03 PM, Gowithit wrote:

    Author, your entire thesis is flawed. As one of the many people who got small checks from my company back this year, I am well aware of why these companies would pass these savings on to their participants, and that's because they ARE REQUIRED TO BY THE SAME LAW. That's right, sports fans, they are required to spend 80% on actual medical care or they MUST refund that back to participants (it gets complicated on the employer offered side because technically the company gets the money back and then has a choice to disburse it, which stinks, but on the exchange side, it's 100% participant). And why not mention the other major reason some insurance companies might not want to join, because it's not set up to screw the customer.

  • Report this Comment On May 24, 2013, at 6:05 PM, nottabrat wrote:

    UHG is one of the worst of the worst. Good riddance if they go belly up. Maybe ObamaCare will suck at first, but then maybe it will open up new opportunities for other investors to create new companies that focus on making a FAIR profit on millions of people, rather than gouging a few hundred thousand here and there. It's time someone stepped up and forced the insurance company's hands because they are way too big and powerful to lobby congress anymore... Soon only the biggest companies with the richest investors will be able to say what is and is not going to happen in the USA. And that's NOT a free Market society where "TOO BIG TO FAIL" and "Too big to prosecute" go hand in hand... Yeah Obama may be a liberal-bellied crybaby, but I'll support him in this (and only this) one thing that he has done...

  • Report this Comment On May 24, 2013, at 6:06 PM, lizfj1 wrote:

    well, us fools in Massachusetts knows that since we had this forced down our throats the cost of insurance has skyrocketed, and the co payments along with it. doctors have quit, you can't find a primary, and skip getting assistance from the state. I get Medicare Part A, I can nOT AFFORD to buy Medicare Part b, as it would be more than 25% of my monthly check. (Silly me, I need to pay my mortgage) and the state is telling me that I don't qualify to get state assisted health insurance because I qualify for Medicare. I n their terms - (quote) " you can't participate if you are eligible for Medicare. " So, where do people such as myself, who can't afford Part B, go???? Oh, right, death squads. If a senior can't get health care, that IS a death squad!

  • Report this Comment On May 24, 2013, at 6:10 PM, gina777 wrote:

    I see the idiot obamabots are here trying to blame the Republicans for Obama's mess.

  • Report this Comment On May 24, 2013, at 6:12 PM, nottabrat wrote:

    lizfj1... uhm I thought you guys absolutely loved Romney care. All I heard about was the success of the plan. And Mass is not on the true Obama care yet. Hopefully Mass will be one of the states that benefits from things like rebate checks. I'm sick and tired of doctors and the like, who OWN their own surgery and diagnostic centers ordering unnecessary tests when you have insurance, but if you don't have insurance, then they say, well, if you HAD insurance we would do it just to rule out "whatever" but since you don't let's just do like we have in the past before the $5000.oo test was invented, and we can just wait it out and see if gets better or worse...

    Also I'm sorry that you can't make ends meet financially because you didn't plan for your future adequately. But here's to you and please cheer up. After all, tomorrow is another day...

  • Report this Comment On May 24, 2013, at 6:17 PM, megalo99 wrote:

    "Some would point out that this could be a good thing, which may result in savings due to less competition."

    Who are these some?

    Why do they not know anything about economics?

    Why did you listen to them and include such a ridiculous statement in your article?

    Yes, monopolies always result in savings to the customer! Moron.

  • Report this Comment On May 24, 2013, at 6:23 PM, rudyprojekt wrote:

    This is the first article that i have read where the comments left are more articulate than the actual article :-)

  • Report this Comment On May 24, 2013, at 6:49 PM, michaelmar wrote:

    Until we have a system where the cost of care is even remotely connected to the consumer, and that consumer benefits from any efficiencies he/she can achieve through shopping for services, there will be neither cost control or quality of care. Currently everyone wants whatever they can get since it has no effect on their personal cost/premiums. Obamacare only aggravates that problem. Obamacare intends to do it through govt force, which only can work for a limited time since the actual costs eventually become due...like in Soc Security & Medicare/Medicaid.

    The reduced reimbursement for doctors from break even Medicare to losing medicaid rates also guarantees lower supply as doctors either retire and/or refuse govt patients and future doctors take other professions where their pay is not under govt control. And reducing supply can only increase costs in the long run.

    The ultimate goal of Obamacare is not to solve the real problems in our medical system, but to make it so bad that the only "solution" is for a total govt takeover. Anyone think Obama & Co will consider that the problem is the entire concept of the law and his big govt, anti-free market preference, or that it does not have enough govt control...ie single payor? This is all just a designed to fail stepping stone to govt takeover of another industry.

    Finally, the entire govt enforced system of mandated coverages is antithetical to the concept of insurance...to transfer the risk of large unforeseen events...it is like having insurance to pay for oil changes in our car.

  • Report this Comment On May 24, 2013, at 7:03 PM, californiamobile wrote:

    Funny California would find the flaw with all its liberal demoncraps. The big flaw is the Name OBUMMERCARE, It has his name, which means he actually cares which he doesn't. Then care. The care recieved is horrible and the taxes associated with it is enough to pay for 5 of his vacations. This is the worst program ever.

  • Report this Comment On May 24, 2013, at 8:33 PM, enough4788 wrote:

    ObummerNoCare is not bi-partisan. It's strictly left wing, and we know unread before passing. In fact, the problems with it were highlighted quite often before it was passed, but Pelosi and Obama didn't care. Thus, scandal, boondoggle and failure are common words for this WH today.

  • Report this Comment On May 24, 2013, at 8:51 PM, Sally719 wrote:

    The existing system is broken. Costs are spiraling out of control. Exposing the amounts hospitals and other medical providers are charging is the first step toward fixing it.

    The people who are milking the system of course want to keep the veil of secrecy - so we are all in the dark.

  • Report this Comment On May 24, 2013, at 9:23 PM, mtgt350 wrote:

    UnitedHealth, Cigna and Aetna combine for only 7% of California's healthcare coverage. They're small players in healthcare coverage the State of California. The 3 largest players in California, Kaiser, Blue Cross and Blue Shield combine for over 87% of Healthcare coverage and are all signed up to partcipate. California doesn't need the so-called "big 3" insurance companies since they're really the "small-3" there.

  • Report this Comment On May 24, 2013, at 9:43 PM, MajorDilemma wrote:

    Did California Just Expose a Major Flaw in Obamacare?

    ======================================

    I didn't see where you made the argument that this was a flaw. It seems more speculation than fact.

  • Report this Comment On May 24, 2013, at 9:56 PM, jeffm2013 wrote:

    well congrats america obamacare and socialism comes at a price you all went and voted for obama thinking wow the government is going to give me insurance my employer is going to pay for it well guess what if your in the fast food industry look at your job hours did they just get cut? are you now looking for that second job to make up for that pay cut you just took? congrats voting for obama worked out real well for you didn't it not only did you get your hours cut and lose money on your pay check now you need to come up with money to pay for this bravo america for being stupid to fall for obama's lies :)

  • Report this Comment On May 24, 2013, at 10:00 PM, oldsenior wrote:

    Considering UnitedHealthcares Horrible track record California should be happy they are not participating. the author of this article seemsunaware of health insurance carriers.

  • Report this Comment On May 24, 2013, at 10:01 PM, ladydia645 wrote:

    Why should he or congress care about Obama Care - taxpayers pay their medical care & if you happen to be an illegal - all is free. Now if looking for a job it will be part time so no medical benefits will be paid by that company. My daughter is a manager & has already put her employees on part time. Can we dig a deeper hole?

  • Report this Comment On May 24, 2013, at 10:02 PM, marain wrote:

    The failure and outright refusal of the federal government to deal with the 12+ million known illegals in this country is one of the main reasons our health care is so expensive. Hospitals can't stay open in the red, so they have to pass on the unpaid costs to the rest of us. Another is the mountain of counter-productive federal medical regulations that has been growing steadily for decades. Tossing a regulatory nightmare like Obamacare into the mix is like trying to put out a gasoline fire with vodka.

  • Report this Comment On May 24, 2013, at 10:51 PM, deralynch wrote:

    Just because big names national insurance companies in the industry aren’t participating doesn’t mean it won’t be successful. Give me a good price, a good product and good service and the company can call itself anything it wants. I have zero loyalty to and many bad experiences with big name insurance companies.

  • Report this Comment On May 24, 2013, at 10:53 PM, freedomwriter wrote:

    "...require that health-benefit providers are spending at least 80% of premiums collected on health care for its members."

    This ought to be mandatory for every business. Put 80% back in and watch the economy grow, instantly.

  • Report this Comment On May 24, 2013, at 10:59 PM, Regaleonline wrote:

    Where am I going to get the $10,000.00 a year to pay for Obamacare? I dont have anymore money period.

  • Report this Comment On May 24, 2013, at 11:07 PM, michaeljbauer wrote:

    If this were a high school paper it might get a "B". Then a good teacher would explain to the enthusiastic writer what a syllogism was and the student would be better for it.

    Did the author not benefit from the coaching like thar?

  • Report this Comment On May 24, 2013, at 11:10 PM, bugmenot wrote:

    Obama, Pelosi, and Reid said that they didn't read the Bill. Democrats don't understand the Bill. Some leading Democrats are forecasting a nightmare as the Bill doesn't hold together. Obama will have a legacy of Scandal and Incompetence.

  • Report this Comment On May 24, 2013, at 11:55 PM, Joe112200 wrote:

    How naive politicians can be to think that we can all get along and work cooperatively.

  • Report this Comment On May 25, 2013, at 12:22 AM, bythebayCK wrote:

    "Even more so, a lack of recognizable health insurance names could diminish consumer interest in researching these health plans, which would defeat the entire purpose of setting up the health exchanges.

    What lack of recognizable health care in CA? Most everyone I know has either Kaiser or Anthem/Blue Cross. As stated before, UH doesn't even offer health care to the general consumer in CA.

    Also as stated before, most of us don't care who wee have our insurance with as long as it's effective, affordable and accessible.

    This article is erroneous, at best.

  • Report this Comment On May 25, 2013, at 12:29 AM, LifeIsaDream wrote:

    Medical cost in USA are too high. A friend needs to buy a wheelchair and quote is $27K, but in the end, medicare negotiate the price to $7K, meanwhile the manufacturer gets some tax break due to how they lost money. Much of our medical cost are over quoted, either they get the inflated price they ask for, or they can write off the difference. Too many games and gimmicks involved all for profit. Remove the profit. streamline how hospitals, doctors, etc. can charge. I spent a few hours in ER, got two IVs, so far the cost is >4000 USD. In other countries, the cost is probably ~200-400 USD. Maybe we are the most corrupt country in the world, because it is legal in USA to rape some one's bank account for medical expenses. I am not sure this new Obamacare addresses many of the under lying issues, but we certainly need changes.

  • Report this Comment On May 25, 2013, at 12:52 AM, ss1957 wrote:

    The point everyone seems to be missing is this. The Insurance companies can set whatever rate they want, and provide whatever coverage they want. Let's say that for $100 a month, a family of four is covered, with 70% major medical. So how does that family pay for a $200,000 bill. Where are they going to get the other $60,000. There is no co-pay, there is no health care savings plan, They have to come up with $60,000. Oh, I know, everyone else will have their rates raised to make up the difference. And how do we know who can afford to pony up the extra money. Why the IRS has all our records and can determine who will get hit the hardest. Anyone who complains can always be audited.

  • Report this Comment On May 25, 2013, at 1:16 AM, itchscratcher wrote:

    California has only exposed the fact that Kaiser will probably dominate the California Market as it has always. And the reason is - is that Kaiser is an extremely efficient effective model for delivering high quality care to millions of Californians. For those who are not familiar, Kaiser is very much like what a national health care service would be like. Everything is in house. From pediatrics to Senior care, kaiser doctors, nurses and facilities deliver the care. Kaiser also mandates that in order to be a member - one has to agree to binding arbitration rather than hire attornies ( people still can resort to lawsuits - but they will likely not prevail). I've found that Kaiser is typically half the cost of other providers. And generally speaking their doctors, nurses - because they are working within kaiser, don't have to deal with legal issues, issues around running a small practice etc. Kaiser isn't perfect but it aint bad. When I could afford insurance I always chose Kaiser because it gave me the best idea of what my costs would likely be and I found them to be always affordable. Any other health insurer trying to compete with kaiser - can't. Like I said - Kaiser owns everything and all the doctors/nurses/ etc are getting a salary ( a good one, as well), They typically don't farm things out where they'd have to pay exhorbitant fees for hiring out of kaiser specialists and all their overhead.

    Also - once you're in Kaiser - all doctors, nurses, etc. will have complete access to your medical records. For the most part - that's true throughout the kaiser system ( there are wrinkles but eventually those will get sorted out).

    People should stop whining about the affordable care act. It's goals are laudable. Bringing care to those who couldn't afford it, is a valuable social goal our society should strive for that rather than react with horror and disgust about "socialized medicine" . Obamacare, will have warts and what-not but its probably far better than what we have now where insurance companies continually jack rates up by 20, 30, 40 percent annually , and retrospectively rescind coverage through recisions, refuse to cover anyone with any imaginable preexisting condition and generally charge ever increasing rates while covering fewer and fewer. Insurance companies don't usually want to cover those who actually need insurance.

    And - actually the facts are, portions of Obamacare have been in existance for some time now ( no lifetime caps, no preexisting conditions, etc- are all part of Obamacare) and the sky hasn't fallen and we haven't become a bunch of socialists.

  • Report this Comment On May 25, 2013, at 3:03 AM, MitchMcConnell wrote:

    I, for one, like Obamacare since it is based entirely on Romneycare. Thanks for trying to kill it, Motley Fools.

  • Report this Comment On May 25, 2013, at 3:20 AM, pschlutt wrote:

    I'm new to this board, so I do not know how to give a thumb's up to a person's post. Many of your comments have a lot of merit.

    I think all this is a 'smoke and mirrors' game to scare us from the powers that have most to lose.

    As some of you already posted, so what if the big insurers want to bow out. I can tell you from experience that our insurance providers are making a bundle from our premiums. For instance, my co-pay for a specialist is $30. If I was going to pay for the visit out of pocket the cost is $45. That means on top of the $200+/month that is taken out of my paycheck, that insurance company is only paying a $15 difference.

    Now, this example more than likely doesn't represent the cost of a heart surgeon cost, since this specialist was a chiropractor, but how many of us turn to a heart surgeon compared to chiropractor? Very few.

    In the 70's, when I entered the work force, insurance was 80/20 across the board. I needed family doctor and he had two price lists. One for those paying out of pocket, and those who wanted his office to file. The difference in price was $8. That is a lot of money considering it was the mid-70's. So I paid him $18 and file to my insurer myself. My ob/gyn had a similar set up, but my the early 80's that changed. If we had insurance, the doctor's office had to file. Sounds fishy, even typing this today.

  • Report this Comment On May 25, 2013, at 3:45 AM, Gabrielorrigan wrote:

    I work in WNY as an RN. One can read the paper our group lershner runs two hospitals, BMH and Lake shore. In the last week Lake shore laid off 85 of its 600 workers and BMH laid off 120 of its 550 workers. Why you ask? Obama Care reduced our reimbursements rates to one third the rates we used to get. Primary care MDs no longer accept patients with Obama care or Medicare because it is a financial loss.

    This is coming from a health care professional, Obama care is ultimately going to kill healthcare for the patient and destroy the job market for it. I a seeing and living through right now! That is the unbiased truth!

  • Report this Comment On May 25, 2013, at 4:07 AM, prv8eye wrote:

    Sad that Americans are SO ignorant of the TREMENDOUS COST of socialized medicine.

    Like all socialist government MANDATED programs this will cost untold BILLIONS of dollars requiring EVER INCREASING taxes for every working American for the rest of their lives.

    It is MORE goverment control and the corruption will make the billion$ in medical fraud now seem like a drop in the bucket.

  • Report this Comment On May 25, 2013, at 6:03 AM, TimothySanD wrote:

    I am looking forward to this "Mandated" Health Care AKA O'BamaCare...

    The very first thing that I am going to do is immediately cancel "my" Companies Kaiser Health Plan... (yes, I am greedy but I own the darn Company so of course I want to maximize profits)

    We have one of the Best Health Care Plans that Kaiser offers and it costs BIG $$$. With 44 current employees it costs my Company over $11,160.00 per month... (90 percent of the employees refuse to use their benefits, so why even pay their premiums?) I will let the employees decide what Health Plan they want to purchase "THEMSELVES" with their own money...

    I warned my employees of what would happen if he was re-elected so let them deal with it like I have had to do for the last 23 years...

    This Health Care Plan is "TERRIBLE" and people are just now starting to figure that out...

    This will save me over $11,160 per month that eventually comes out of my pocket because I own the Company...

  • Report this Comment On May 25, 2013, at 6:54 AM, tbranch1 wrote:

    This indeed is an incredibly biased article. The fact is that the U. S. is the only major "advanced" nation that does not offer all citizens access to some kind of universal healthcare. Yet we spent a far higher percent of GDP on healthcare without better outcomes in most cases.

    Lobbyists and political contributions to Congress assured that the Affordable Care Act was put together in a way to protect the profits of the huge insurance companies. But it did increase access. It is a half measure at best, but better than nothing.

    The selfishness and lack of concern for their fellow citizens by so many posters is appalling. If Obamacare is so bad why aren't you critics working for universal health care wih a single party payer? (e.g. the govt like Medicare?)

  • Report this Comment On May 25, 2013, at 7:04 AM, rogert73 wrote:

    Obamacare is not about providing HEALTHCARE.

    It is only about having he gov't control healthcare.

    Ask yourself, what is a healthcare law really about when it funds 16,000 new IRS agents and no new doctors!!!

  • Report this Comment On May 25, 2013, at 8:48 AM, Lizword wrote:

    This primarily reflects insurers' market shares in California. Kaiser already covers most of California's insured to the tune of nearly 50% of CA's citizens. It's service area covers almost the entire state, is more comprehensive, and is a far better deal than any other insurance product in the state.

    Anthem has the next largest market share, but far lower than Kaiser. Blue Shield distant third.

    Most public sector agencies offer Kaiser at no cost to the employee, and if the employee wants Anthem, the employee pays the difference. The other insurers aren't even offered.

    No other insurers, including CIGNA and United Health, are even players in the state. These insurers hold less than 5% of California's insured. Not population -- insured. They're DOA anyway.

    It's too bad that the author didn't do a comprehensive enough analysis to convey information that I knew before I even finished the article.

  • Report this Comment On May 25, 2013, at 9:52 AM, LouBodoh wrote:

    Here is an item from 6 months ago in which a major healthcare giant discusses the dangers of GMO's(genetically modified organism') and how to avoid them in their newsletter.

    It Obama Care is so concerned about the health of the nation, then it needs to get the population off of these dangerous products. Your Standard American Diet(SAD) is composed of overprocessed, fragmented, devitalized, chemicalized, GMO ladened, dead and stale material passing off as "foodstuffs.". Americans are overfed and undernourished. The sickest people on earth reside in the USA.

    Why is that? Why are you all so ill?

    Could it be your diet?

    But then again in America, the land of monopolies such as Big Food, Big Pharma, Big Oil, Big Media, Big Brother, Big Military, etc. each one of these giants feed off of themselves. A truly parasitic relationship.

    Top US Healthcare Giant: GMOs Are Devastating Health

    http://naturalsociety.com/top-us-healthcare-giant-gmos-are-d...

  • Report this Comment On May 25, 2013, at 11:16 AM, getagrip67 wrote:

    Alot of interesting comments. I too am a RN working in Critical Care---I disagree with the fact that medical employees are being layed off due to Obama care. If they are it is probably due to the fact that some one higher up in corporate is going to get a smaller pay check. I am involved in mangement and believe me I know. Insurance companies are as crooked as they come. Don't you know its the little guy that goes first.....Its all about money

  • Report this Comment On May 25, 2013, at 11:21 AM, Bibityboo wrote:

    In regards to some providers staying out of the California market, the article says: "Some would point out that this could be a good thing, which may result in savings due to less competition." Just where does that work?

  • Report this Comment On May 25, 2013, at 11:23 AM, gemswinner12 wrote:

    If 80% of premiums collected must be spent on healthcare, then the smart insurance companies will be offering a bunch of "junk" policies. High deductibles, no dme, maternal, or pharmacy coverage, etc... There is a rule about catastrophic plans written into the Obama package, but there are many ways around this and the age cap is quite low.

    This will result in many angry consumers who thought they were getting a great deal but didn't bother to read and understand the plan.Many people will just choose the cheapest, and go on with their lives until somebody has to go to the hospital. I think Cigna and United were smart to sit this one out.

  • Report this Comment On May 25, 2013, at 11:34 AM, RHO1953 wrote:

    Just one of many major flaws. The premiums will rapidly escalate, and more taxes are on the way already. Don't forget the forty percent excise tax on high end plans that is looming. There are still millions of stupid democrats who think are going to get free health care. I talk to them every day. There is no convincing them that they are going to pay for their own health care.

  • Report this Comment On May 25, 2013, at 12:04 PM, wscarp1 wrote:

    The goals of the Affordable Health care act are distorted in this article. There is no planned transformation of the health care system...only of the health insurance system. The goal of the legislation is to afford the 25+million Americans who currently have no insurance and cannot afford to get any...or are eliminated by insurance companies from getting any a selection of insurance options which cannot reject them and which, if necessary, the government will help them pay for.

    The health care system remains the private, enormously inefficient, over-priced system it has been since the insurance companies went for-profit in the 1990's.

    The health insurance act will provide the insurance companies with tens of millions of new customers. One would hope this would lower insurance premiums, but don't hold your breath!

  • Report this Comment On May 25, 2013, at 12:21 PM, Observero0 wrote:

    For those providing comments on "Obamacare" that "something is better than what we've got", you just might want to re-think that & beware what you wish for. In case you haven't read the bill, or various analyses on the bill, you're in for a very rude awakening because the bill does not control the increase in health care costs which in turn are passed on to patients with, of course, a tidy insurance overhead added to the medical cost.

    Further, the "health care" bill does nothing make health care costs & outcome transparent to the patient so the patient can shop for the best health care service not only from insurers but also from health care providers.

    And ,the "health care" bill does not have "squat" in it about assuring access to health care. With a burgeoning number of patients & dwindling health care providers, we are going to witness a very nasty health care, & financial, train wreck. Those that can afford it, will most likely take advantage of "medical tourism" & get U.S. equivalent or better treatment outside the U.S. at a much lower cost.

  • Report this Comment On May 25, 2013, at 1:42 PM, ErickRhoan wrote:

    The TL;DR Version: major health insurance companies are cautious in how CA's exchange will play out, so they're not participating just yet, but other companies are. In 6 months when PPACA is in full swing they'll re-calculate their options. And life goes on.

  • Report this Comment On May 26, 2013, at 7:03 AM, hirilluthien wrote:

    How would the saving not be passed onto their customers? We received a rebate this year from our insurance company. Under the Affordable Care Act the insurance companies must use at least 80 percent of the premiums they collect on medical care and quality improvement. So if the insurers gain savings due to less competition they actually are required to pass those savings back to their customers... by law.

  • Report this Comment On May 26, 2013, at 11:00 AM, higashione wrote:

    o_bomb_ya doesn't care and if the title is a lie why would you expect to find any truth in the actual program? anybody looking at public health care in california and not agreeing that it has declined in quality in the past 2 decades is blind!

    i wonder how it could get any worse....as usual they will extort more money and still show up empty handed.... what difference does it make that the homeless will now have insurance if they do not actually get medical care?

  • Report this Comment On May 26, 2013, at 5:33 PM, Jjones4460 wrote:

    It is the "Affordable Care Act".

    Nicknamed Obamacare by the conservatives in a failed tempt to hang something unpopular on the President in time for the 2012 election. Why did the renaming fail? Because the plan is WAY better than what we had going before. No one likes the ACA except the part about continuing coverage for children under 25.

    Elimination of lifetime cap on coverage? Ok we like that too.

    Elimination of pre-existing conditions? Well, of course, that we should keep.

    No denial of coverage? Well...that should stay.

    Yeah, funny that.

    The real problem all y'all have regarding the ACA is that it is still market driven. Meaning that whole plan has to guarantee the insurance companies make money pimping us consumers out to providers and paying the bills.

    There is no way to keep all the above listed "goodies" without throwing a 20% government guaranteed profit to the insurance companies. You see originally insurance was supposed to be a collective banding together to spread risk. Now it is a corporation banding people together to insure profits and until recently there was no requirement that 80% of the premium cost go to providing care. Prior to that the insurance companies had built into their profit motive the ability to refuse care and no limit on profits.

    Further, we talk like the "government" isn't us. In any given instance it may not be any one of YOU but it is ALWAYS us.

    Further, there is discussion like the ACA is socialized medicine. It is not! It is government regulated private insurance, not unlike most of our utilities (gas, water, electric,)

    We do have many fully socialized programs in this country, you may be more familiar with them than you think:

    Streelights, use those?

    Streets, freeways, use those?

    Fire department, there's a damn commie conspiracy if there ever was one.

    Police, yeah some are more familiar than others.

    Then there is my all time favorite government run communist American programs: Army, Navy, Airforce, Marines.

    So, if you truly want a government run healthcare program I suggest we get Medicare for all, and if you think that's so bad, try ripping out of the still alive because of it hands of your grandparents.

  • Report this Comment On May 31, 2013, at 10:19 PM, Rebmoma wrote:

    Yes, it's true. Obamacare is a replica of Romneycare, a plan based on the Republican plan put forward by the Heritage Center and introduced by Senator Chaffee to compete with "Hilarycare."

    So long as we have for-profit insurance in a "competitive" system, we will have a Republican plan. Only if that fails will we get a "socialist" plan, or maybe Medicare E. Then you'll have Democrats to blame. If you don't believe me, check out this chart from Kaiser that compares Obamacare to the provisions in the Chaffee bill (reminder: the 1990s Republican plan from the Heritage Center) http://www.kaiserhealthnews.org/graphics/2010/022310-bill-co... . I can't believe you have an opinion on Obamacare and don't know this basic fact.

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