Thursday, August 27, 2015

ObamaCare Doctrine : No Risk, Everyone Gains, Except for Those Paying Higher Premiums and Deductibles

The ObamaCare doctrine is this: if you end the financial risk for caring for the sick and the needy, if insurers and government guarantee equal access to all regardless of their age, gender, and pre-existing medical conditions, all be well.

The problem with this ideological doctrine is that it doesn’t work very well in the real world. It may work well for the subsidized poor (3% of the population) and those who have neglected care because of costs, but it doesn’t work very well for for-profit insurers, who are beholden to stakeholders, and for the middleclass, who must bear the burden for health care without risks.

Risk is an essential pre-condition of the capitalistic society. Investors and entrepreneur are wary of anyone who urges action in which they incur no risk. You take your chances, and you accept the consequences.

With ObamaCare, consequences of accepting all comers for insurance coverage and guaranteeing that all comers will receive standardized, comprehensive coverage without regard to financial risk, has been and will continue to be increased premiums and deductibles.

It should be no surprise, then, that major insurers in some states have raised premiums in the health law’s third year, despite the ObamaCare’s insistence it will force states to justify these increases. Insurance regulators in multiple states have approved premium increases as “justifiable” because of the hefty increases needed to cover higher –than expected claims for sick people who signed up for health exchange plans.

Among the state raising premiums above 20% are major insurers in Tennessee, North Carolina, Maryland, Idaho, Oregon, and Kentucky. The problem is keeping insurers in business and staying financially sound while providing insurance. Five major insurers – Blue Cross and Blue Shield of Rhode Island, Medical Mutual of Ohio, MVP Health Care, Anthem, and Blue Cross of Michigan 0 have proposed raising premiums by more thatn 10%.

Requiring companies to allow anyone to buy policies, regardless of medical history, age , or gender comes at a cost. The Obama administration says people should shop around, but this is difficult in states where the major insurer dominates the market and where shoppers cannot cross stateliness in search of a better deal.

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