Monday, August 22, 2016


Among the many reasons that Obama Care should and will fail is it is basically fiscal unstable. Universal health insurance/ care has to deliver care at a cost which reimburses all providers or participants fairly.

Among the villains are the Insurance carriers who believed that they had a golden cow since the government was backing their policies. Many carriers low balled their initial premiums and can no longer afford to provide insurance at that rate.

Disregarding a “what the traffic could bear” reimbursement a fee schedule based on available funds will result in providers opting out of the system. The alternative is strictly limiting services provided, or denying costly procedures. That is rationing!

Federal control means bureaucracy with multiple regulations which increase the cost of service for providers be they physicians or facilities such as hospitals or long term care, or outpatient clinics and ERs.

The Exchanges with a no one can be denied insurance have resulted in major insurances dropping out of the market because of loss. This has been due to the fact that there has been an influx of people with chronic diseases that had not been able to receive insurance. There has also been many who were independently insured to the cheaper Exchange policies.

The government has subsided the carriers in the exchanges to make up for some of the expected loss for the first few years but that subsidy is being discontinued.

Since such subside has to be paid by the government it can done either by increasing tax income, or by the politician's  favorite, increasing the debt to a point that would result in defaulting on bonds.

In their rush to tap into this goldmine many of the carriers grossly underestimated the risks. Now they are attempting to compensate by either dropping out of the exchange insurance or raising the premiums by double digits of anywhere from 15 to 43 percent.

The theory was that all uninsured would now get insurance. However to day there still are about 26 million not insured. Many are the young age group who were supposed to balance the carriers cost by not using resources. They have opt to not be insured despite the so called penalties as being less expensive. They will take their chances of not having a catastrophic medical crisis.

The other factor affecting the carriers balance is that there was a large increase of heavy service users who had private insurance are buying the cheaper Exchange insurances.

Others who no longer have a major health problem drop their insurance ASAP.

Insurance companies usually charge different premiums depending on risk including such factors as sex, occupation, income level and age. Under the ACA the only variable can be age, and that is a restricted one.

In many locations instead of competition for the Exchange customers there is only one carrier and the premiums reflect that monopoly.

No comments:

Post a Comment