PSSST…Think Obamacare is Moronic? There May Be an Alternative…

Written by: Jack Boylan

If recent polls are any indication, the number of people looking forward to the Obamacare rollout will soon be down to the size of the audience for Kim Kardashian’s TV show (actually it might be those very same people!). Don’t worry though. In the grand tradition of communist reeducation camps, uh, I mean community education, our government is busy recruiting the NFL and Hollywood celebrities, to teach our young people that signing up for Obamacare is pretty near the equivalent of patriotism. The coming campaign should be quite a sight to behold as anyone signing up for the health care law’s “exchanges” who’s even remotely “young” will need to have his or her head examined (hey, that’s where the mental health benefits kick in…it’s a win-win!). There have been a flurry of articles on Obamacare lately, and they all seem to mention that the “key” to the law is that “young” people sign up in sufficient numbers. Then there is often a tricky contortion of language used to elide some of the, well, obvious problems with that scenario. However, in one of the more forthright pieces written, Jen Wieczner at the Wall Street Journal’s sister compay, MarketWatch, lays out some of the daunting math involved in getting the “young” to jump aboard. While still using language that is a touch delicate, she manages to be refreshingly straightforward:

But for a healthy 20-something who rarely goes to the doctor and doesn’t take prescription medications, that penalty might be far less expensive than buying a health plan through the state health exchanges, the new insurance marketplaces opening Oct. 1

The penalty for 2014 is as low as $95 or at most 1% of one’s salary (these increase as the years go by). Oh, and the exchange charges are just the start as most plans have more out-of-pocket costs built in:

And the bare-bones plans also have high deductibles, so 20-somethings in the least expensive Washington plan would still have to pay $6,350 in medical bills before the insurance company would start to pick up the tab—a calculation that could lead more young people to see the penalty as a comparative bargain

Yes, I imagine that they would indeed see the penalty as a “bargain“. As the average health care costs for the young population is reportedly only about $800, paying $100 or $200 a month with a huge deductible might be more accurately described by fitting in the word “insane” in there somewhere or another.

Interestingly, there seems to be an alternative that has quietly (thus far) garnered some attention. And it can be used at all ages, not just the young. And where does one get this alternative? Well, would you believe life insurance? It’s true, and at least for now these policies seem to be a workaround for those who simply don’t want Obamacare for whatever reason. As usual when buying a life insurance product, a death benefit is involved, but in addition to that these policies have more features:

Along with life insurance coverage the policy includes what’s called a “critical illness” component. If the policyholder needs, say, surgery, the insurer writes the policyholder a check based on a schedule. Let’s say, for example, it’s $10,000.

The policyholder has $10,000 in hand to pay for the medical care — or, frankly, anything else since the money belongs to the insured — but the value of his life insurance benefit is reduced by the same amount, to $240,000. Thus the critical illness component simply accelerates the benefit payout.

These policies will appeal to those who are primarily concerned with the type of major expenses that can happen with accidents or major illness. Of course, that used to be what “insurance” primarily meant. Even before Obamacare though, health insurance has sort of morphed into something akin to a retainer paid to a law firm. But that doesn’t mean that many (probably most) people are not chiefly concerned about the major bills associated with a catastrophic health event. So, how much is this life insurance product?

For one company, a 30-year-old male would pay $1,438 a year, and for a 50-year-old male it’s $3,234.

And remember, this isn’t just health coverage. In the event of a tragic accident or illness, whatever is left of the benefit goes to the estate upon death.

Interesting isn’t it? I would bet that this option might fit the needs of an awfully big portion of the population. Now, I have not dug into the fine print of these policies and am relying on the linked article at Forbes. And the details are, needless to say, extremely important. The above example is still quite a bit of money for the “young” and on top of that, they may have zero life insurance needs. Still, what I find amusing is the resilience of this entrepreneurship, so to speak. If a market need is out there, people will try to meet it. Now, if these policies became popular, it is more than probable that the government would try to outlaw them, so as to not “hurt” Obamacare. But this coverage option definitely shows some initiative and what the heck is wrong with that? Plus, I think more than just the 20-somethings will be looking around for alternatives come January.


PSSST…Think Obamacare is Moronic? There May Be...

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