Tuesday, October 25, 2016

Double Digits

The so-called Affordable Care Act was sold to the American people by the president and congressional Democrats (not a single Republican voted for it) on the pretense that it would make insurance cheaper and medical care better. Critics at the time cautioned us that what we were being told wasn't true, that Obamacare, as it came to be called, would end up in a death spiral because young, healthy people would opt out thus depriving insurance companies of the revenue to pay for the medical costs of the sick people who would flock to the system.

Despite the warnings that this would happen, a lot of people thought a nice man like Mr. Obama and a nice lady like Nancy Pelosi would never lie to us. Well, they did, and now the bills are coming due, and millions of Americans are experiencing the insurance equivalent of sticker shock.

The Obama administration has admitted that insurance premiums will rise by double-digit percentages in 2017, an admission that will likely bring the debate surrounding Obamacare to the forefront in the final days of the 2016 election:
Premiums will increase at an average of 25 percent across the 39 states serviced by the online marketplace healthcare.gov, according to the Obama administration. Even worse, around 20 percent of consumers, or one in five, will only have one insurer to choose from in the marketplace.
This is because insurance companies will go bankrupt if they stay in the system so they're getting out as fast as they can:
This is not great news for the already struggling healthcare legislation. Obamacare is in the midst of a death spiral: 17 co-ops have failed, the Tennessee Health Commissioner says the healthcare exchanges in the state are “very near collapse,” insurance companies in North Carolina have become a “financial sinkhole,” and few health experts have positive things to say about the future of the legislation.

The total number of insurers participating on the Obamacare exchanges is likely to drop from 232 this year to 167 in 2017. That is a loss of 28 percent in just 12 months.

This year’s expected increase is triple the size of 2016, and will have a direct effect on 16 percent of consumers who are not protected by subsidies, the Hill reports. Some 5 to 7 million consumers are either not eligible for subsidy assistance, or they purchase healthcare packages outside of the exchanges, where subsidies are not available.
The lesson here is that one should never trust politicians, no matter how charming they may be, to tell the truth nor the government to do anything well (other than run the military) or efficiently or better than free people shopping in a free market can do.

This is a lesson that a lot of millenials who supported Barack Obama, Bernie Sanders, and Hillary Clinton refused to accept, but now, unfortunately, millions of them are going to learn it the hard way.