Insurance 101: Why #Obamacare WON’T (and CAN’T) Work…

A quick Flashback for everyone:

Wow!! That sounds so incredibly…. like not what is happening, at all.

Health care costs are going up in most states, partially due to Obamacare’s Minimum Coverage levels. Accordingly, many catastrophic-type policies which were especially popular among the young-and-healthy crowd will no longer be sold, as they fall below the new, arbitrary minimums allowed by the new law. And, all things being equal, more coverage means more cost. -your-own-money Oh sure, some folks will qualify for subsidies, but that just means that Big Daddy Government is paying for part (or all) of the premium. And THAT means, of course, that WE are paying for those lower premiums. That’s not lowering the cost: that’s merely reassigning who pays for the cost.

Or if you prefer, it’s “spreading the wealth around”, Obama-style:

(via Forbes.com) – “…Obamacare’s bevy of mandates, regulations, taxes, and fees drives up the cost of the insurance plans that are offered under the law’s public exchanges.

A Manhattan Institute analysis I helped conduct found that, on average, the cheapest plan offered in a given state, under Obamacare, will be 99 percent more expensive for men, and 62 percent more expensive for women, than the cheapest plan offered under the old system. And those disparities are even wider for healthy people…”

Now, I’m sure many of you are already aware of this. You may also know that Obamacare is completely dependent upon healthy folks picking up the slack for those who are either unhealthy or can’t afford insurance, or both. But what you may not know is why this premise is so inherently flawed, because it deals with adverse selection. Insurance 101 “Adverse Selection” is a term that Insurance folks (as I’ve been for over 20 years) use to describe when the most costly people are buying a product, and the lower-risk, “profitable” people aren’t. This is crucial: you can’t inexpensively price coverage that only the expensive-to-insure folks desire, at least without your company swiftly going broke. It’s an iron-clad rule, regardless of  whether you’re insuring your car, your health, or your PlayStation-4.

And what if you had folks who qualified for “free” coverage? Since whatever coverage someone receives obviously costs money, someone else is gonna have to pay for it. Any guesses as to whom that might be? (**Hint: look in the mirror).

Obama’s ridiculous rhetoric to the contrary, the Obamacare Mandate was designed to offset this, by making the healthy & wealthy pay more than they needed to, so that everyone else paid less. But if those wealthy/healthy folks won’t (or can’t) afford to buy, the whole thing blows up.

Detonation in three…, two…, one….

(via MyNorthWest.com) – Enrollments in health care plans through Washington state’s new health care exchange continue to increase, but it turns out a majority of the enrollees so far won’t be paying for their plans.

“The Medicaid newly eligible population accounts for a little more than half of the 25,000 that we’ve seen,” Michael Marchand, with the new Washington Health Care Exchange, tells KIRO Radio’s Dave Ross.

A Medicaid expansion under Obamacare raised the income threshold for those eligible.

“So that’s the new population that’s part of the expansion that the state undertook,” says Marchand. “It’s quite possible that those people may have never had health insurance in the past and have been able to go to Washington Health Plan Finder and determine that their eligibility actually qualifies them for free insurance.”

I’ll add that the deeply flawed Obamacare Exchange website (with “deeply flawed” being exceedingly kind) is not the cause of this. It is, however, exacerbating it.

Simply put: the folks who have the most to gain will put up with all the delays and site crashes of the current website in order to get their payoff: affordable (or free) health care coverage, especially if they were previously uninsured or uninsurable. The folks who have the least to gain will not.

Shut-Down 333

Eventually the Obamacare website will work; when that is doesn’t much matter. What does matter is that even if/when the site works flawlessly, the underlying math doesn’t: the money for the subsidized premiums has to come from somewhere, after all.  This makes no more sense than the car salesman who, upon realizing he’s losing $1,000 on every car sold, says, “well, I guess we’ll just have to make it up in volume…”.

Yes, Car Salesman Obama has sold the country the biggest, foulest Lemon ever conceived. The only question remaining is how long it will take before his customers figure out they’ve been taken for a ride.

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17 responses to “Insurance 101: Why #Obamacare WON’T (and CAN’T) Work…

  1. livinrightinpgh

    Yep…ASSUMING folks eventually figure out they’ve been taken for a ride, it should occur about a New York nanosecond before the gubmint imposes nationwide single payer….sorry, you KNOW that’s where it’s going to end up. Thank you, RINOs….

    • There’s actually an argument against that, Pgh: the Obamacare rollout and subsequent fallout.

      Those who’ve always wanted Single Payer will still want it, true, but I have a sneaky suspicion that the arrogant claims of Governmental Competence which helped fuel O-care itself will ring substantially more hollow by then.

      The only thing that will remain by then will be if we’re actually given a CHOICE.

  2. Maybe it’s just me, but I wouldn’t be so quick to sign up for this stuff “on-line” anyway, especially with my own computer or phone. Something about sending the federal government all of our pertinent information ALONG with our IP address, just smells to me. Having said that, I really just have to shake my head. I’ve been a conservative republican all of my adult life. I listen to Rush on a daily basis and have now for YEARS. I need to realize that not everyone is as pro-active as I when it comes to understanding politics. Listening to that man blather on again, was just a painful reminder that folks will continue to actually buy the junk that spews from these liars mouths. Anyone who knows anything about the liberal agenda knows that the federal government is the LAST entity that will ever “lower” anything. That man NEVER should have been president in the first place! I just want to shake these people and scream!! 😦

    • I empathize, Wendee. His best strategy is not to say anything, since his cocky TrashTalk fires up the opposition much more than Harry Reid or even Queen Pelosi.

      Keep praying and don’t allow yourself to be dispirited: that’s what he WANTS.
      I promise…..

    • ****BTW: Been a Rush listener for many years, and his 24/7 package which gives you his podcasts, etc, is highly worthwhile.

  3. 3% of my paycheck, that’s what the penalty will cap at. So, here’s the deal. I won’t be able to afford the rising cost of health care nor will I be able to afford the stupid penalty fer not having healthcare. Very soon I will be forced to sign up fer govt “free” healthcare. Ya know fer a bunch of liberal Nazi’s these pukes are pretty smart. (BTW, I will never volunteer fer ACA)

  4. Obama Care was never meant to work. It is just a stepping stone towards the progressive prize…single payer.

    My wife checked out one of the sites that figures out your costs and whether or not you qualify for subsidies. I used to make north of 40 G’s a year, which is good for where we live. The last few years with the slow economy, my best year was 13 G’s. Plugged that into the formula and gave our ages, 55 and 60, and our premiums come out to 13,500 a year and we don’t qualify for a subsidy. So our insurance would cost more than I made last year. Looking for second and third job.

  5. Maybe the Rino’s had it right? ObamaCare will collapse of its own weight?

    I’m not counting on it but wonder what they’ll do when it’s not supportable?

    Great post, JTR.

    • Thanks, tannngl!
      It will collapse, but what their reaction will be TO that collapse is gonna be the real question.

      Poor claims loss ratios and doctor shortages are just two of the likely effects on the way. In response, the gov’t COULD mandate ever-higher premiums, or declare that nurses are now doctors. Not great ideas, but why should that bother them now?

      Nothing short of repeal will actually “fix” this, obviously, but total O-care failure is coming, of that I’m sure.

  6. Arrrgh! this whole thing is a nightmare, wake me up!

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