The Administration is proclaiming a victory for Obamacare: The level of “uninsured” has fallen to the lowest point ever. Well, maybe – but one can wonder what the numbers would be if insurance was NOT mandatory. Remember, if one doesn’t have insurance, one is fined. So, rather than risking the fine, many folks have signed on for insurance, and, assuming the federal government’s numbers are accurate, the share of uninsured has fallen to under 10%. We are not sure why there are still 10% uninsured; with coverage “mandatory” it would seem to follow that close to 100% should be covered. Perhaps those of us who are covered should make an effort to find out the techniques of the 10% who aren’t, so we can join their ranks.
But,the number of people covered is less important than how they are being covered. Under Obamacare, premiums are soaring, deductibles are soaring, insurance exchanges are going out of business, health care costs are up, people are forced to purchase coverage they don’t want at prices they can’t afford, and the taxpayers are on the hook for massive subsidies. And despite that, insurance companies are losing money hand over fist because they are not able to attract the “healthy” people who don’t need insurance – you know, the same group that made up the largest slice of the “uninsured population” before Obamacare – those who don’t need insurance. Mostly young, relatively well-off, and healthy enough that they do not have large medical expenses, they can afford to pay the penalty, when it, added to their healthcare costs, is less than their premium would be. It’s basic economics: they don’t need insurance, they would rather spend their money on something else, so they are not in the insurance pool, and their premiums go uncollected. This upsets the actuarial table for Obamacare, and leads to the “not enough premium to pay the benefits” catastrophe that we have now. A study of the insurance market by McKinsey & Company shows that In 2014, insurers had a margin of minus 4.8%, and lost a combined $2.7 billion on the individual health insurance market. In 2015, the margin expanded to something between minus 9% and minus 11%. And this has led to soaring increases in insurance premiums. How about the President’s claim about Obamacare resulting in everybody saving $2,500 on premiums?
Well, if the marketplace fails, there’s always that subsidy to fall back on, and with the government subsidizing people whose incomes are below 400% of the federal poverty level, the taxpayers are bleeding money faster than the insurance companies. And, under Obamacare, deductibles are far higher than before, which means that customers must pay more out of pocket before they can get benefits from their insurance. And it is getting hard to find a healthcare provider in many parts of the country. What’s more, some insurance companies are pulling out of the insurance markets. Some are leaving certain counties (it is estimated that 650 counties in the United States will have only one insurance carrier next year), some drop certain coverages, others are abandoning certain states.
It doesn't have to be this way. We could go to market-based plans, that give the consumer the coverage he wants, with the deductible he is able to afford, that allow him to use the provider of choice. As many, many people are coming to realize the bitter irony of Obamacare: it would have been cheaper if the taxpayers had subsidized insurance for those 30 to 40 million uninsured people, and allowed everybody else who was satisfied with his existing insurance to “keep his plan.”