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Will Obamacare Increase North Carolina Bankruptcies?


Obamacare to greatly increase insurance premiums

Image source: InsureBlog.blogspot.com

Today was the day that the public healthcare exchanges for the Affordable Care Act opened for business. It was an ignominious start at best with the government’s Obamacare website crashing multiple times as consumers tried to check out enrollment and plan information. A Health and Human Services (HHS) press release bragged that “Premiums before tax credits will be more than 16 percent lower than projected.” Despite HHS reassurance, North Carolinians will not be seeing any “affordable care” any time soon.

A Forbes article published last month offers rate analysis information based on research performed by the Manhattan Institute for Policy Research and a series of maps that show premium differences before and after Obamacare for sample gender and age. These clearly show that North Carolina has no good news coming on the Obamacare front. The map below shows average rate increases for 40 year old women. You can see that NC can expect the second highest increase at 202% for women in this age group.

North Carolina Obamacare rate for 40 year old women

Image source: Forbes.com

For 40 year old men in North Carolina, as you can see below, they will face the worst rate increase of any state with a whopping 305% rate increase according to data provided by the Institute and analyzed by Forbes for this piece.

North Carolina Obamacare rate for 40 year old men

Image source: Forbes.com

27 year old women in North Carolina will fare a little better under Obamacare. You can see below that in this age and gender bracket, they are the 5th highest in the nation for increased costs at 151%. This is nothing to cheer about but at least it’s not as bad as the anticipated rate rises for 40 year olds.

North Carolina Obamacare rate for 27 year old women

Image source: Forbes.com

Men are getting the short end of the Obamacare stick in our state. You can see from the map below that young males in NC can expect the second costliest rate increase in the US at 267% higher than current costs.

North Carolina Obamacare rate for 27 year old men

Image source: Forbes.com

You also must understand these are rate increases from standard premiums available in our state prior to the implementation of Obamcare versus the lowest tier plan under the Affordable Care Act! For better coverage, the rates will be drastically higher than these already terrible rates.

You will hear people defending the ACA and touting that the tax breaks will make up some of this cost increase so qualifying consumers will get some relief. That sounds good, but the reality is grimmer. First, the anticipated tax breaks will not be enough to offset the increased costs of coverage under this plan by anyone’s reckoning.

Second, tax breaks are limited in who they will help. Most of us will be paying significantly more for coverage despite any tax incentive. Third (and most important) the tax credit will not help you afford the out of pocket costs for your premiums that will be due long before a subsidy comes into play on your annual tax return.

Consider this – if you are a 40 year old male paying $200 per month for your coverage now, Obamacare will drive that up to $610. Annualized that’s a difference of $4,920 out of your pocket or $410 each month extra. Do you have that? For 40 year old women, if you're paying $175 per month now, your rates will balloon to roughly $355 which will cost an additional $2,160 per year. There is no good news for individuals or families with these new rates.

Obamacare subsidies won't help up-front costs

Image source: AHIW.com

Your subsidy (if you qualify) will not redeem the difference. If you’re lucky enough to have 50% of the additional cost coverage (and this is highly unlikely) you will still be out of pocket hundreds each month. Who can afford that?

This is a long discussion to get to our topic of whether Obamacare will increase North Carolina bankruptcies. The obvious answer seems to be yes. Because how could it not? Our unemployment rate is still higher than the national average and for those that are already cash strapped, how can complying with this financially onerous law be anything but disastrous?

If you are already deep in debt, while bankruptcy won’t help you escape the Affordable Care Act, it can help you get your relief so that you more readily afford the increased costs of the mandatory new health coverage. Call a reputable North Carolina bankruptcy attorney like John T Orcutt for advice on your debt circumstances and how bankruptcy can help you. 

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