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发帖数: 29846 | 1 ObamaCare is entering its dreaded ‘death spiral’
By Betsy McCaughey
October 19, 2015 | 7:46pm
ObamaCare is heading toward a death spiral.
The Obama administration is having trouble selling insurance plans to
healthy people. That’s a big problem: When the young and healthy don’t
enroll, premiums have to be hiked to cover the costs of older, sicker people
, discouraging even more young people from signing up.
Last Thursday, the administration predicted enrollment for 2016 will be less
than half what the Congressional Budget Office predicted in March.
Despite subsidies to help with premiums and out-of-pocket costs, most of the
uninsured who are eligible for ObamaCare are saying “no thanks.” Only one
in seven is expected to sign up. That’s despite a hefty increase in the
financial penalty next year for not having insurance.
The president sees the writing on the wall. You won’t be seeing the
customary nationwide TV campaign to encourage sign-ups, as there were in
previous years. Remember the young guy in plaid pajamas — “Pajama Boy,”
to conservatives — well, he won’t be back this winter.
Bad enough that healthy people aren’t buying. Worse is that the
administration is spending billions of your tax dollars covering up the
problem, paying insurers to keep offering the plans, even though they’re
losing their shirts. But facts are facts — and there’s no hiding these.
Health and Human Services Secretary Sylvia Burwell predicts ObamaCare
enrollment will inch up by 1 million or so, to 10 million people — half
what the CBO forecasted. Open enrollment for the coming year, which begins
Nov. 1, “is going to be a challenge,” she said.
David Wichmann, UnitedHealth Group’s president, announced higher premiums
last week because enrollees will “require more medical services than
original expectations.”
Many states (though not New York) are looking at premium hikes of 30 percent
or more, according to a new Robert Wood Johnson/Urban Institute analysis.
The Heritage Foundation estimates that insurers lost 12 percent selling ACA
plans in 2014, with more losses this year.
Don’t shed any tears for the insurance companies. Though they’re losing
money on exchange plans, overall they’re profitable and their stocks are
doing well. It’s John Q. Public who’s bearing the brunt. Just as ObamaCare
intended.
If you get insurance at work, you’re paying an extra tax to fund “
reinsurance” for ObamaCare plans. It’s a fund to defray the cost of their
most expensive enrollees.
So far, insurers have collected about $7.9 billion. Recent congressional
testimony shows the payments kept ObamaCare sticker prices about 11 percent
lower than they otherwise would have been. In short, you pay a tax to make
ObamaCare look more affordable than it is.
But even with these hidden subsidies, ObamaCare isn’t working because the
design is fatally flawed. The 5 percent of the population with serious
medical conditions consume nearly 50 percent of the health care. When you
try to sell insurance to sick and healthy people for the same price, the
healthy don’t sign up. It’s too expensive.
New York state learned that in the 1990s, when one-price-for-all insurance
laws pushed premiums to the highest in the nation, crushing the individual
insurance market here.
ObamaCare repeats that mistake. Despite slapping the uninsured with
penalties — which will jump to 2.5 percent of household income in 2016 —
they’re not signing up. The need to coerce enrollment with penalties is
proof the plans are a bad deal.
How long will big insurers play along? There are political considerations,
and for most, ObamaCare losses are still just a dent in their overall
business. Not so for the 23 co-op insurers set up under the health law.
Eight state plans have already failed, including New York’s Health Republic
, and most of the rest are bleeding money.
With ObamaCare enrollment floundering and losses mounting, the nation needs
alternatives. The Republicans are coalescing around a reform plan, but
Democrats are doubling down. Hillary Rodham Clinton wants to burden the
existing, unpopular plans with more “free” goodies, and make it harder to
dodge the mandate. That won’t work.
A real reform would cover the seriously ill — people with pre-existing
conditions — in separate plans with separate pricing and subsidies to make
them affordable.
Just like the high-risk pools many states used to maintain. That’s the
lesson of the failing ObamaCare scheme.
Betsy McCaughey is the author of “Beating ObamaCare” and a senior fellow
at the London Center for Policy Research. |
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