Dave Ramsey

I wanted to share this video of Dave Ramsey explaining how Obamacare will impact us.  The video below is from a radio show he did on October 4th.  He asserts that health insurance premiums will have to go up.  “They have to… it’s not a political statement. It’s that I know how to do math.”

“You’re not exempt from math if you’re a Democrat, you are not exempt from math if you’re a Republican.  You are not exempt from the math if you’re a liberal, and are not exempt from the math if you’re a conservative.  You still have to do math.  Anyone who can can do math can tell anyone who has the basic business premises of something like a social security system or something like the tenets of Obamacare – the processes that are being put in place there.  It’s fairly easy to surmise with critical thought what is going to occur.  You just have to be intellectually honest enough to do critical thought and to look at it regardless of your political leanings  And you  have to pull your head far enough out of your politics to have an original thought.” Ramsey said.

Insurance companies will be forced to take on anyone regardless of preexisting conditions starting on January 1, 2014.  They will not be allowed to change them more as they used to be able to do with those customers.   That will force everyone’s premiums to rise.  He also explains how this will impact businesses forced with raised premiums.

“Employers aren’t going to pay for this.  They aren’t going to accept less profit. They’re going to cut expenses like not hire as many people or not give as many raises – you are going to pay for it,” Ramsey said.

“Anytime you force you force everyone to be on the same playing field, you force income reallocation – regardless how you feel about it or what your moral imperative is, you still have the same net result mathematically,” Ramsey added. “The more we look into Obamacare, the more we realize that we’re being forced to do this. You don’t get the option of not participating. You are going to pay a fine. Your employer’s going to pay a fine. Your employer’s going to pay higher fees.  You are going to pay higher fees.”

Watch below:

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  1. If you don’t cover the sick, the old, and those with higher risks because of pre-existing conditions, rates can be kept lower. Dumping works as a cost containment measure for insurance companies but that’s not the whole picture. It just pushes costs elsewhere. People fall into bankruptcy and receive poorer and inadequate care when they can’t get coverage. Medical providers don’t get paid and recoup the costs elsewhere. Somebody pays and most often it’s the insured and the taxpayers.

    Now, rates in Massachusetts haven’t risen disproportionately despite several years of similar programs to the ACA. That’s thanks in part because hospitals and emergency departments don’t need to pass the costs of care for those who couldn’t pay on to those who are insured with higher charges. With most of the people covered with insurance in the state, hospitals and doctors have fewer unpaid bills.

    Shane, what are your thoughts on coverage of preexisting conditions and the appropriate make up of health insurance pools? My preference is to make pools broad and deep. While I fortunately don’t have to worry about preexisting conditions, I know enough friends who’ve had to go through that nightmare of getting insurance coverage to know I’m certainly willing to pay against that risk.

  2. He also fails to mention that the individual mandate is also about getting younger and healthier people to sign up for health insurance.

      1. Actually it changes the math considerably. The purpose of insurance is to distribute and share financial risk. If the finacial risk is broadly distributed and shared the average premium can be lower. All insurance is redistributive, it redistributes money from those who do not suffer loss to those that do suffer loss covered by the type of insurance being provided.

  3. Let’s talk about the math because he left several variables out of the equation. 1) competition on the market place. 2) limits on the amount of profit an insurance company can receive (the 80/20 rule) before they have to issue refunds to policy holders. 3) transparency in the hospitals (helps make hospitals accountable and make it easier for you to shop around…creating competition which is a mechanism for driving costs down) 4) More people purchasing insurance (and based on his own words this would drive cost down) 5) Government Subsidy that a person may qualify for. 6) inflation 7) rising costs of healthcare with or without new health care law

    Now an intelligent conversation about the math would have included these points. It’s possible that he may have still reached the same conclusion, because these are variables that we don’t know how are going to play out in the real world. But he doesn’t do that…he completely ignores this part of the math. Why would he do that? And by the way, Obama’s original plan had also included a government run insurance program to help create more competition. That was compromised out of the final law.

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