” OBAMACARE: More Financial Turmoil to Come in Markets and the Economy. “

” OBAMACARE: More Financial Turmoil to Come in Markets and the Economy. “
Whether you support the President and his policies or not, Obamacare could possibly be the worst piece of legislation of the last 100 years. It has been a debacle, and it will only get worse.

By Ty J. Young, CEO of Ty J. Young, Inc.
I have worked in the investment and wealth management industry for over 20 years. I have lived through and studied some of the most compelling moments in American history. I have never seen such stunning incompetence as the government’s roll-out of “Obamacare.”
The impact of what the Obama Administration has described in their own words as a “debacle” will have far–reaching effects on our markets, the economy, and your personal financial well-being. Other factors can have dramatic effect, such as the continued money printing of the Fed, and we will discuss all of those factors below. But with regards to Obamacare, I have never seen anything like it. It is hard to imagine that the President did not know he was being untruthful since the problems with Obamacare were predicted time and time again over the last 4 years. Not only did myself and other commentators repeatedly point out what would happen, on television and other media outlets, but as the law was debated on the floors of Congress, these issues were brought up and soundly shouted down by the Democratic Party. In party line vote after party line vote, the Democrats prevented any change or reversal in Obamacare. One can only conclude that they, too, were not telling the truth, and knew it.

I. The Obamacare Debacle.
Most of my readers and clients are already aware of the factual summary: 1) President Obama and the Democrats passed Obamacare in 2009 which gives the government oversight and control over how you receive health care and over 1/6th of our economy; 2) the President and the Democrats repeatedly PROMISED that “…if you like your health insurance, you can keep it”; 3) that was untrue then and untrue now, and has now been proven untrue, with millions of policy cancellations over the last couple of months; 4) to compound the problem, the government’s website doesn’t work. To describe the number of problems with the website in the era of Google and Amazon would take days and hundreds of pages, and the project has made the government a laughingstock globally; 5) the policy holder who has been cancelled now goes to the exchange, and over the last 30 days or so, if you can actually get into an exchange, you have learned you will pay more for a policy you don’t want with a higher deductible; and finally, 6) under intense political pressure from his own party, the President finally relented, and extended the period of time insurers can allow you to retain your existing policy in violation of his own law.
Stop for just a moment and ponder that last statement. Imagine if you will that you are an insurance company. You have painstakingly worked with the government to make sure you are compliant with the law. For 3 years you have changed documents, websites, servers, policy notices, staff, actuarial tables, business models and much more – ALL for the purpose of transitioning to a compliant status under Obamacare. In many cases your management team has politically supported this President, in an effort to influence the process. The law you are trying to comply with is over 2000 pages long, with just as many administrative rules and orders which have been promulgated and for which you must comply with. Your insurance commissioner has changed the state’s process for managing the newly created exchanges, or created one on their own, and has prepared for an influx of Medicaid recipients which will cost his tax payers additional money.
You were frustrated by the number of “waivers” granted by the President which each time impacted and changed your actuarial tables and how you were going to remain solvent and profitable. After 3 years you sent out the notices as you were required to do under the law, that the particular policies you had offered over time were no longer compliant under the ACA (“Obamacare”) and the policy holder would have to purchase a new policy through the exchanges.
After all of this, the millions of dollars in time, money and investment, the President, facing some political pressure, says he is going to let people keep their old policies for one year.
As former Democratic Governor Howard Dean asked – “is that legal?”
The answer is – “NO.”

II. The Unlawful Changes…..
The President cannot unilaterally alter the law which bears his name, that takes an act of Congress (But it seems he’s doing it anyways.) It is why the Republican bill in Congress that would try and fix this problem with language that allows the insurers to re-institute those plans, it does not compel them to do so. How could you? The insurance industry has already been re-wired to accommodate the law as it is currently constructed. The Senate bill, from the Democrats, forces the insurers to offer the old plans after the law compelled them to cancel them.
What Obamacare has compelled you to do – and you are compelled, Obamacare is an individual mandate for all citizens – is essentially rent an apartment, after which the government tells the landlord they are going to level it. They make you move out, and then they level it to the ground. Now what do you do? You’re out in the cold. The government responds and says you can move back in. Too late (!) – your apartment has already been leveled! For that fantasy to come true the landlord would have to re-build the old building, spending untold amounts of money, only to have his apartment buildings LEVELED AGAIN one year into the future. There is no basis in reality for this administration’s fix to Obamacare. Elected officials on both sides of the aisle on EVERY level are calling for a repeal (at least parts of it).
What do you between the time they condemn the building and at some future point rebuild it?
You freeze to death.
There is no escaping from the conclusion that the President and the Democratic Party at the very least misrepresented the truth. The evidence is quite substantial from the Congressional record over the last several years. I believe they purposely intruded upon, and created financial chaos in, our health insurance markets. They have endangered people’s health by having their individual plans cancelled. The incompetence is so complete that you cannot believe it is possible, leaving you only with the conclusion that it is quite possibly on purpose – driving our country towards a European Socialist model of single payer health care.

III. Government centric versus government take-over.
Many of my readers and clients benefit from a “government-centric” system, but providing for the elderly or the poor is quite different from fundamentally altering the entire private free-market landscape. And I understand that our healthcare system was not completely a “free-market” driven system, because government central planning had already caused major distortions in the healthcare industry (Medicare and Medicaid). But nonetheless, some of you who do receive government provided care are most likely saying: “Give it some time, let it work out the kinks, make some changes to improve it.”
Remember that while you would not give up your Medicare, it is neither profitable nor free. Medicaid can help the poor but is rife with waste, fraud and abuse. The political idea of taking tax dollars and spending a percentage of those dollars on providing access for the poor and the elderly does not need to conflict with free market principles. You can have a free market system that assigns certain resources to care for those who cannot care for themselves.
Other examples used to support government provided health care include the models of Canada and England. However, as we know, those systems have massive systemic failures which lead to delays in actually seeing a doctor, poorly trained medical staff, wrong diagnoses, and pre-mature death. The drugs bought from Canada come at a lower price because the Canadian government “subsidizes” the drug company’s costs! You are getting cheaper drugs thanks to the Canadian tax payer! That is not free – someone is paying for it!
And the last thought on changing America’s free market system is this: all of the socialist models around the world are either broke or failing, and they are able to provide their substandard care thanks to the product and industry innovation found in the American free market. From drug company R&D to the most recent advances in MRI technology, you can provide socialist care when someone else is doing all the work. The world essentially works as a “free-rider” on the American system of health care. That system, thanks to Obamacare may be over.
IV. What Next? Single-payer?
Without question, the President and Democratic Party will spend billions of your tax dollars to fix the problems. I expect the website to be eventually operational, if somewhat dated as to its abilities.
The extension of one year to retain your cancelled insurance policy seems most problematic – how does that work given the years of change the insurance companies have already put in to transitioning out of the old policies? The scope of buffoonery, and the obvious lack of any real business sense, is quite discomforting.
But the biggest concern is the employer-based policies. Next year the employer mandate will kick in, and insurance companies will be raising the group rates and changing the group policies altogether. When that segment of the market is hit, all political heck will break loose. And make no mistake, when your employer based group plan is required to provide maternity care, hair transplants, and mental health services to all employees, if you BELIEVE your companies costs will not increase, and you believe they won’t pass that cost on to you – or worse – cancel the policy altogether, you’ve got another thing coming.
This effort, by design, forces everyone to the government for health insurance, i.e. – single payer. Do I believe the Democratic Party was smart enough to do this on purpose? No. Are they happy that they now see where this could lead? I believe so. The intrusion into the insurance market is causing irreparable harm to the business model, and may eventually force insurance carriers to close up shop or move to a different industry. You may prefer single payer – but you will be wishing for a system that has the same capabilities as the current Obamacare website, with a doctor you may see within the year, possibly on a skype phone line in another country, with all the charm, talent and grace of the Department of Motor Vehicles. *************************************************************************************************************
V. Conclusion
As stated in our opening paragraph, there are lots of factors which impact the economy and our markets. The Fed’s money printing is most likely the worst actor – because it devalues the currency, your currency, and it destroys the value of money specifically for savers. Combined with the Fed’s purchase of mortgage backed securities, and we are inflating another housing bubble.
But there is also fiscal policy in the hands of Congress and the President, which has been dismal for years – including the Bush era. Global trade policy has been non-existent during the Obama administration, with little to no movement on major trade treaties with friendly countries. And of course Dodd-Frank has been a drag on US banking policy and business lending in particular.
But nothing, nothing has compared to the breathtaking scope of incompetence found in this Administration’s execution of Obamacare. The combination of all of these drags on the economy will impact your retirement future.
“But Ty, the stock market reaches a new historic high every day!”
Yes, and our clients benefit when the stock market goes up. They lock in their gains each year.

The market doesn’t go up forever. The market started its ascent in 2002, from end of the dot.com bubble and 9/11. It ended approximately 5 years later, when the recession began in November of 2007. Many forget that Bear Stearns collapsed in January 2008, and we faced a gas price crisis in the summer of that year. Fannie and Freddie went under government control that summer as well. The market collapse of 2008 due to the Lehman Brothers bankruptcy and passing of TARP was substantial, but the market decline occurred over a year.
That bull market from mid 2002 through January 2008 was about 5 and a half years.
We started our current market ascent in 2009 – we are closing in on the 5 and 1/2 year mark, aren’t we?
Our firm’s message has been resolute before, during and since the upheaval in the market this past decade – invest in protected principal investments. So that when the market goes up, you lock in your gains, and when the market goes down – as it always does – you won’t lose anything.
Obamacare is a “debacle.” Protect your portfolio from the market reactions to this government-created disaster.