Monday, June 6, 2016
ObamaCare – Unsustainable for Insurers, Unaffordable for Consumers
The Un-s are winning.
Unsustainable for Insurers
ObamaCare exchanges are proving to be unsustainable for major insurers and for small insurance co-ops as well. The big insurers are dropping out exchange markets in multiple states, and 13 of 23 coops have declared bankruptcy. These losses stem from a simple set of realities: 1) Healthy millenials and healthy people below 45 have not joined exchanges in sufficient numbers to offset expenses entailed in covering older and sicker folk.2)Those that join exchanges are sicker than actuaries predicted. 3) And once people join, record numbers drop out once they are treated.
Unaffordable for Consumers
ObamaCare exchanges are also proving to be unaffordable for many unsubsidized middle-income people. They cannot afford to simultaneous pay for spiking premiums and deductibles, higher out-of-pocket costs and co-pays, and out-of network costs should they require a specialist.
A Matter of Social Arithmetic and Social Chemistry
This dire situation, sometimes referred to as the insurance death spiral, is a matter of simple arithmetic: Unexpected Addition of costs, Unexpected Subtraction of services, Multiplication of unexpected high expenses ( 12.7 million new exchange patients and 7.3 million new Medicaid patients X $4,152 per year per subsidized enrollee + $16.643 for each new Medicaid recipient each year = $65 billion), and Unpopular Division and redistribution of taxes between economic classes, And, of course, Social Chemical Equations which state the right and left side of the equation must balance, or unexpected consequences ensue.