The PJ Tatler

Deadbeats to Prosper Under Obamacare

Suppose you can’t keep paying your Obamacare premiums because they’re just too high. Or, suppose you’re a deadbeat and only bought the insurance to avoid the penalty and don’t feel like paying anymore.

Once your insurance company drops you for not paying, you should be liable for any health care bills you incur while uninsured, right? Not exactly.

Reason reports:

Tucked inside nearly 11,000 pages of the Affordable Care Act is a little-known provision that doles out three months of free health care to individuals who choose to default on their premiums.

People who receive the federal subsidy to be part of Obamacare will be allowed to incur a three-month “grace period” if they can’t pay their premiums and then simply cancel their policies, stiffing the doctors and hospitals.

Their only repercussion is that they have to wait until the following year’s open enrollment if they want coverage on the exchange.

“It will help break the system,” said Rep. Louie Gohmert, R-Texas, one of a core group of Republicans who oppose Obamacare. “This is a huge piece of evidence to show this can’t work, you will break the system and bankrupt people involved.

“The hospitals, doctors and insurance companies will be left holding the bag. There will be disagreements over who will pay for what. Lawyers will get involved because we are talking about a lot of money,” he said.

Under Section 156.270 of the Affordable Care Act, the insured needs to pay a premium for just one month before qualifying for the three-month grace period. The insurance company must pay the claims during the first month of the grace period; during the second and third month doctors and hospitals are left to collect unpaid bills.

This loophole wasn’t lost on some unnamed individuals who queried the Department of Health and Human Services during an open comment period for the new law in 2011.

While officials at HHS did not respond to requests for comment on this story, they did offer a glimpse into their thinking in a March 27, 2012, report contained in the Federal Register.

“HHS will continue to explore options for incentivizing appropriate use of the grace period,” the register said. “HHS will monitor this issue moving forward and will continue to work on the development of policies to prevent misuse of the grace period.”

Bottom line: Those who wish to game the system can purchase one month’s of insurance and be covered for 4. And, of course, they avoid the penalty for not purchasing insurance.

The only way you can “incentivize” people not to misuse the grace period is put them in jail if they do:

Experts say the federal government has given people the green light to commit fraud.

“In a sense, it legalizes fraud,” said Wesley J. Smith, a senior fellow at the Discovery Institute of Human Exceptionalism and a frequent critic of the Affordable Care Act. “It legalizes putting your burdens on the insurance companies’ shoulders and never paying your premiums. The government wants people to be irresponsible and apparently they want the whole system to descend into chaos.”

This is already a problem in Massachusetts, where the template for Obamacare was born. And, of course, any cost savings realized through Obamacare will be wiped out by the deadbeats as hospitals and doctors will be forced to pick up the tab by charging the rest of us more.

Or, they can just go broke.

The solution for some doctors is to refuse to see anyone who got their insurance through the exchanges:

And any doctor who is paid by the insurance company during the last two months of the grace period will have to return that money, he said.

“Our overhead is about 50 percent; I get $100 and it costs me $50 to stay in business,” Brotherton said. “The most obvious solution is anything through the exchange, we’re not taking it.”

Fewer doctors are going to be seeing Medicaid patients as the number of beneficiaries rise. Now we have the prospect of millions of people receiving their insurance through the exchanges and not being able to find a doctor in their area to treat them.

These little Obamacare nuclear bombs keep going off as we discover just what’s in this monstrosity. You can be sure that deadbeats being deadbeats, they’ve already figured out the angles and will milk the rest of us for all we’re worth if we give them a chance.