In “The ACA: If You Can’t Fix It, Tax It” I looked at some of the problems with the Affordable Care Act, affectionately called “Obamacare”. Recent news articles suggest that the situation is even worse than predicted earlier. Insurance companies lobbied for Obamacare because they saw a potential revenue windfall. It hasn’t happened, in fact, they’re losing billions of dollars! A major health insurer has said it will exit most exchanges in 2017, and if it does, other companies will follow. Along with the fact that several state insurance co-ops have gone bankrupt this would mean the collapse of Obamacare.
The insurance companies have an alternative, though: a taxpayer bailout. Give us the money or we’ll walk. Since Congress must approve such a bailout our lawmakers hold the future of a flawed law in their hands. Actually the term “bailout” is inaccurate because that term implies a one-time payment. What would actually be needed is a yearly subsidy because, as long as people get sick, Obamacare won’t be profitable for a private company. Once taxpayers have to subsidize insurance companies the country would be running a bizarre “multi-payer-with-single-payer-rules” system with executive bonuses thrown in.
So what’s happened? Enrollment figures aren’t nearly as high as projected. While insurers expected lots of young healthy enrollees, what they got are older sicker people with high medical expenses. This is a direct consequence of the socialist “one-size-fits-all” plan. Many young healthy people want to buy an inexpensive catastrophic illness coverage plan and pay for routine expenses out of pocket. Such plans aren’t allowed under the ACA. Many single men don’t understand why they should have to pay for maternity benefits either, since they’re biologically incapable of ever using them, and women don’t see why they should have to pay for PSA tests. Some families simply can’t afford the combination of high premiums and sky-high deductibles. Subsidies may lower the policy cost but not the deductibles, which can top $12,000 a year.
All business decisions involve risk. In this case the insurers bet the wrong way by making a politically expedient but economically bad choice. Should the taxpayers be put on the hook for multi-year bailouts of for-profit companies? Should our tax dollars fund executive bonuses? Is Obamacare “too big to fail”? If you agree that the answers are “NO” tell your senators and representatives “no bailout, not now, not ever”.
If the law is that bad, fix it or flush it.