Wayne Smith III | On February 22, 2017

Robin Hood Statue, Nottingham (Arran Bee on Flickr)
CC BY 2.0, Resized/Cropped

Now that Inauguration Day has come and gone, many are wondering what Donald Trump and the Republican-controlled Congress will do with Obamacare. Here are analogies on the effect Obamacare has had on the health insurance industry:

• Never having a single traffic ticket, you pay the same auto insurance premium as your neighbor, with four DUI’s and three speeding tickets in the last two years. This is Obamacare.
• Being an accomplished triathlete, you pay the same premium for life insurance as your neighbor who is obese, has lung cancer, chain smokes, and only gets off the couch to grab another bag of Cheetos. This is Obamacare.
• You live in a $200,000 house, and pay the same homeowners insurance premium as your friend, that lives in a $5 million mansion that sits on an earthquake fault line in California. This is Obamacare.

The goal of Obamacare is to provide affordable health insurance to those who cannot afford it based on income, or face denial due to preexisting conditions. While an honorable goal, Obamacare causes healthy Americans to pay more for health insurance than they should pay based on their health status. This allows unhealthy Americans to pay less than they should pay based on their health status. Obamacare upended the health insurance industry by turning it into a reimbursement industry. The Affordable Care Act, or “ACA”, does little to reduce system costs – it moves costs around to other people.

Obamacare has eliminated the ability of insurance companies to determine the risk they are accepting from policyholders. Insurance companies charge fair premiums, and, if too low, they raise premiums and reduce the benefits the next year to become profitable (My premiums went up 40% for 2017). This is a reimbursement game, and not an insurance game.

To be fair, I realize that there are many Americans that are unhealthy, not a result of their choices. Yet, health insurance is not the only type of insurance whereby one’s health status influences the premiums we pay. Why not treat the disability, life, home and auto, and long-term care insurance markets the same way? Doing so would create another entitlement program that America and Americans cannot afford.

In total, Obamacare has been nothing more than a wealth transfer law. Instead of “taking from the rich and giving to the poor”, we are “taking from the healthy and giving to the unhealthy.” It is impossible to legislate away every difficulty, ache and pain, ounce of risk, and inequality.

2017 is going to be interesting. The best healthcare law is one where there are incentives to make healthy lifestyle choices – and make healthcare affordable for all. We must accept personal responsibility for our lifestyle choices, failing to do so will cause the loss of freedom to access the healthcare of our choosing. 1 Corinthians 10:31 says it best:

“So whether you eat or drink, or whatever you do, do it all for the glory of God.”

Wayne Smith III

Prior to establishing Insight Wealth Partners in 2010, Wayne spent 16 years as a CERTIFIED FINANCIAL PLANNER™ practitioner and Senior Financial Advisor with Ameriprise Financial Services. During his distinguished career he earned many awards including being selected by his peers as Advisor of the Year. His areas of expertise include comprehensive financial planning and investment management. Prior to becoming a wealth manager, Wayne spent 10 years in the manufacturing industry where he achieved ever-increasing levels of responsibility in manufacturing management and plant engineering at the best-in-class organizations, Frito-Lay, Inc. and Ecolab Inc.

Wayne graduated from the University of Illinois, Champaign-Urbana in 1984 with a Bachelor of Science degree in Chemical Engineering. A member of the Financial Planning Association, Kingdom Advisors and Crown Financial Ministries, Wayne has also traveled extensively throughout Europe and Asia teaching Biblical financial principles to business and church leaders and individuals.

Wayne lives with his wife, Julie, and two children in Allen, Texas where he enjoys golf, sailing, scuba diving and the study of stewardship. His stewardship blog can be found at www.amusingsteward.com