Friday, June 27, 2014

ObamaCare Premium Hikes Inevitable

There is no good arguing with the inevitable. The only argument available with the east wind is to put on your overcoat.

James Russell Lowell (1891-1891), American poet, critic, author, and diplomat, Democracy

With health exchanges plans and with health plans in general, premium hikes are inevitable.

Sick people require higher rates, and health insurers with investors have to stay in business.

More sick people are going to sign up for federal subsidies than well people.

That is precisely what is happening with the health exchanges. That is why premium rates are going up. And that is why the ObamaCare prognosis is grim.

Obama promised family premiums would go down $2500. Instead a $5000 swing has occurred with rates going up at least $2500.

The inevitable premium increases are one reason why, among other dismal economic factors, such as the 2.9% contraction of the GDP last quarter, why Americans may vote for a Republican Senate in November. This contraction may be due to the Winter of Economic Discontent, but there are other reasons as well.

It was inevitable that more sick people would sign up for the exchanges. They need the care.

It was inevitable that 27% of those signing up would have serious medical conditions like diabetes, cancer, health conditions, and other ailments, more than double the number of those who choose to hang on to their existing plans.

It will be inevitable that insurers will have to raise premiums to catch up with insurers’ expenses of caring for the sick.

It will be inevitable that government will have to “bail out” insurers for their losses through “risk corridors.”

All of this is inevitable when government mandates that private insurers have to cover all those with “pre-existing conditions;“

when insurers cannot ask what those conditions are;

when government itself must relegate coverage to others because it does not have the expertise to manage coverage;

when data is not available or is not yet forthcoming to judge what coverage costs will be;

when one-size-fits-all government policies require that everybody must pay for conditions that may occur with others but not themselves;

and when the entitlement state engulfs us all.

So put on your economic overcoats. It's inevitable it will be cold outside and political condition frigid inside for some time to come.

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