Higher health care premiums could cause ObamaCare to death spiral
Whatever the cause of the higher premiums, however, this trend presents a key structural challenge to Obamacare. The health care law aims to prevent insurers from discriminating against those with pre-existing conditions, to make sure that policies cover a specified package of benefits, and to limit how much extra money insurers can charge older and sicker patients. All of these provisions increase costs and decrease insurance industry profits. But through the mandate forcing individuals to purchase insurance, the law hopes to push enough younger and healthier Americans into the insurance pool to offset theses cost increases. This is where the problem with rising premiums comes in.
The Times story notes that, “Particularly vulnerable to the high rates are small businesses and people who do not have employer-provided insurance and must buy it on their own.” This is precisely the population that the federal government hopes to induce to purchase insurance through the mandate. But as the Obama administration argued before the Supreme Court, those who choose not to purchase insurance would still be in compliance with the law so long as they paid the tax penalty for not purchasing insurance. Should premiums continue to rise, more and more uninsured Americans are going to choose to pay the penalty rather than purchase expensive insurance. And those who go without insurance are more likely to be the ones who can afford to do so — young and healthy Americans with limited medical expenses. Should this occur, insurers would have to raise premiums even more to subsidize the expenses of the sicker beneficiaries they must cover under the law.
Blowback
Note from Hot Air management: This section is for comments from Hot Air's community of registered readers. Please don't assume that Hot Air management agrees with or otherwise endorses any particular comment just because we let it stand. A reminder: Anyone who fails to comply with our terms of use may lose their posting privilege.
Trackbacks/Pings
Trackback URL
Comments
The socialists in office will keep ObamaCare no matter what. It’s people that will death spiral.
Axion on January 9, 2013 at 9:42 AM
There’s that word again, funny how it always pops up when discussing BarkyCare.
Bishop on January 9, 2013 at 9:42 AM
Is this the new norm? Journalists forever behind by two years?
NotCoach on January 9, 2013 at 9:46 AM
You’re so naive, Phil. This is all intentional. Health care premiums skyrocket. The public goes apesh-t. Obama and the Dems ride in to the rescue by instituting price caps on health insurance costs. The health insurance providers either dump coverage or go out of business altogether. And then we have single-payer by default.
Doughboy on January 9, 2013 at 9:46 AM
Higher healthcare premiums are racist.
ramesees on January 9, 2013 at 9:46 AM
Not to worry, the final solution is ready and waiting to go – Single Payer.
OldEnglish on January 9, 2013 at 9:47 AM
So young healthy people would rather pay a tax penalty than purchase expensive insurance they don’t need to subsidize the health care costs of old sick people? Who could have seen that coming?
mbs on January 9, 2013 at 9:48 AM
My post would have beaten yours if it didn’t have to come all the way from Australia.
OldEnglish on January 9, 2013 at 9:48 AM
Bishop on January 9, 2013 at 9:50 AM
Look for more of this stuff along similar lines. Us young people are pretty sick of subsidizing 1000s of creaky old farts we don’t know, aren’t related to, and don’t give a rip about.
MelonCollie on January 9, 2013 at 9:51 AM
All according to plan.
Then the libs will scream for single payer. The only acceptable solution to the last government-top-down-one-size-fits-all solution is an even more intrusive and massive overnment-top-down-one-size-fits-all solution.
gwelf on January 9, 2013 at 9:51 AM
Duh!
Stating the obvious I see. Who would have seen this ahead of time.
D-fusit on January 9, 2013 at 9:51 AM
Mine are up 18% with a doubling of the copay.
Meryl Yourish on January 9, 2013 at 9:53 AM
The sooner you realize that the Liberals’ plan for this to fail is a good thing the sooner you realize that their plan is working.
Notorious GOP on January 9, 2013 at 9:54 AM
This was the plan all along.
People will then start screaming and demanding government “do something,” of course, forgetting that this pain was the result of Obama’s Democrat-dominated government “doing something” when they passed to stupid bill in the first place.
Good Lt on January 9, 2013 at 9:55 AM
I’m sure he meant the Obama Care Tax.
Little Boomer on January 9, 2013 at 9:56 AM
hah! At my age, I try not to think too far ahead.
OldEnglish on January 9, 2013 at 9:57 AM
Eh, single payer is nothing to fear. I know I know, British patients are being starved, ignored, euthanized, and left to die in pain by their tens of thousands….but OUR socialists are smarter than those Redcoats.
Everything will be fine. Just lay back, choose your favorite color and music, and wait for the injection.
Bishop on January 9, 2013 at 9:57 AM
Meanie!
OldEnglish on January 9, 2013 at 9:57 AM
You’ve figured it out. Now we just need the rest of the country to catch on.
Axion on January 9, 2013 at 10:00 AM
Higher health care premiums could cause ObamaCare to death spiral
You mean like the country’s death spiral of rising debt, higher taxes, slower economic growth, all orchestrated by a narcissistic, grinning clown whose primary contribution is to blame Republicans and the rich? THAT death spiral?
Paul-Cincy on January 9, 2013 at 10:01 AM
That’s what’s truly scary. Our federal government can’t run the post office. And people in this country wanna entrust them with delivering health care?!
Doughboy on January 9, 2013 at 10:01 AM
‘death spiral’ usually means that something dies. Unfortunately despite exponentially rising premiums, flawed forecasts, and enforcement at the end of an evil assault rifle, I don’t see Obamacare dying unfortunately.
gatorboy on January 9, 2013 at 10:01 AM
That’s what the Brits thought about National Health in 1947…
Rixon on January 9, 2013 at 10:06 AM
The author doesn’t account for the cost savings measure of the death panels which are designed to kill off the elderly approaching their most medically expensive years. The added bonus is the additional Social Security savings these terminations occasion.
tommyboy on January 9, 2013 at 10:06 AM
The ACA was a colossal blunder. The cost would eventually skyrocket. The progs are dumb as bricks. Living in the DC bubble, they’re coming up with more and more inventive ways to ‘help’ the average joe/jane, but ending up scre*ing the same.
tommy71 on January 9, 2013 at 10:09 AM
Nationwide, more than 20 percent of Medicare is given to people under the age of 64.
hawkdriver on January 9, 2013 at 10:12 AM
You are correct about Obama & the Dems’ intent, but I don’t think it will work out that way. Enough hell has been raised for people to know exactly who to blame for skyrocketing health care costs.
The 2012 election results and the GOP’s tax cave were disappointing, but I think 2014 will be an extremely ugly year for Dems, and Obamacare is just the tip of the iceberg.
DRayRaven on January 9, 2013 at 10:13 AM
And afterwards, a short trip to the Soylent factory.
cozmo on January 9, 2013 at 10:16 AM
Federalism is the only solution. The post office fails because it has no competitors. And the further away from federalism we move the more abysmal our government becomes. We have survived as a free people because of the competing interests of the many states, and we will lose our freedom as the federal government gobbles up the rights and responsibilities of the states. Isn’t it the typical liberal who most often rails against monopolies? Yet they fail to see the most destructive monopoly of all as it slowly consumes all our liberties. It takes a special kind of stupid to fail to understand just how dangerous it is to concentrate power.
NotCoach on January 9, 2013 at 10:17 AM
Rising costs will cause the private health care industry to death spiral.
And that will leave Socialized medicine as the only alternative. That was the plan from the very beginning.
logis on January 9, 2013 at 10:19 AM
ObamaCare is Socialism! It’s made out of Socialism!
@CharltonHeston
Paul-Cincy on January 9, 2013 at 10:20 AM
Death spiral right into the glowing red loving arms of Moloch.
Single Payer round the korner b****hes!
tom daschle concerned on January 9, 2013 at 10:22 AM
Article could have been written 3 years ago just as easily. Completely predictable…and WILL happen.
michaelo on January 9, 2013 at 10:27 AM
I just hope I’m processed into equal parts yellow and green soylent, none of that red stuff.
Bishop on January 9, 2013 at 10:30 AM
We cannot let this statement go without combating it each and every time.
It is not discrimination for an insurer to refuse to insure someone AFTER the event. A car insurer is not discriminating by refusing to insure you after you had a crash.
When you require an insurer to cover someone with a per-existing condition – you are not asking that person to insure against a risk – you are asking an independent company to pay the known medical expenses of someone else with no chance at ever recovering from that person its losses.
We have taken the word “discriminate” – which means making decisions based on information – and turned it into something bad in all cases. In 99% of situations, using discrimination – i.e., making a decision based upon known information – is correct and appropriate. You decide to hire person “A” over person “B” because person “A” went to a better college and had better grades. That is “discrimination” against person “B”. And there is nothing wrong with that.
How the left (and media, but I repeat myself) cannot grasp this fact demonstrates their utter inability to use logic or apply facts to analysis. they simply make crap up out of thin air and expect it to work. Hey – let’s make insurance carriers cover everyone!!!! That’s not using the power of the state to rob peter to pay paul. No, it’s somehow a rational and good thing. It’s not socialism, or tyranny!! No, it is good because I have pure motives.
Is there a problem with people with pre-existing conditions affording medical treatment? Yes. Is it an “insurance problem” – no. It is rational and right for insurers not to cover known costs. Insurance, by definition, is for potential future risk – it is not meant to be a transfer of liability for payment of current known costs.
Arguing against this mindset is arguing against pure and utter ignorance. Ohh, insurance companies are evil because they refuse to cover someone with a known illness that will cost hundreds of thousands to treat.
Let’s see. Let’s say you open a groceries store and someone comes in and says – “I’ll make you a deal Mr. Grocery man, I’ll pay you $100 a month, and in return you give me $1,000 in food a month” – would you take that deal? No. That is what you are requiring insurance carriers to do when requiring they cover pre-existing conditions. It is theft by gov’t, pure and simple. Insuring against risk is not the same thing as transferring payment liability.
Monkeytoe on January 9, 2013 at 10:34 AM
I hope you’re right. But we’ve got some seriously stupid people in this country who are probably susceptible to another demonization campaign against the GOP or insurance companies or God knows who else.
Doughboy on January 9, 2013 at 10:40 AM
Our lives are often informed by our early professional experiences. As a community organizer working in South Chicago, Obama worked to get as many goodies and services from the government for the people he served. To this day he’s doing the same thing. Unlike many others, I believe Obama means well, and doesn’t realize what he’s doing is just evil, and that it will ultimately hurt most those he wants to help the most.
Paul-Cincy on January 9, 2013 at 10:43 AM
Forget subsidizing the ones we don’t know. It rankles to subsidize the ones we do know too.
Many of our grandparents worked during a time you still got a pension at retirement and were thrifty with their money.
Between her pension, the survivor benefit on her husband’s pension, her Social Security and her surivor’s benefit on that, my husband’s grandmother makes ~$6,000 each month.
Now, I realize not all old people are bringing in that much money,but, there are a lot of them out there that are doing just fine.
Of course, where benefits were promised and people have already reached the age where they’re cashing in (even if they’re already pulling out far more than they ever paid in), we need to honor our obligations, but, it seems like we should be planning some future adjustments to the system so 20 y/o recent grads and 30 y/o’s with young (expensive!) families aren’t subsidizing 20+ years of retirement for people that are doing just fine.
JadeNYU on January 9, 2013 at 11:01 AM
Sure, Americans are going to start getting the shaft big time with their premiums. And they won’t connect that with OCare – they will listen to the Demoncrat line and demand someone punish our insurance company enemies.
CorporatePiggy on January 9, 2013 at 11:06 AM
That’s all fine and well, but how many *people* are going to “death-spiral” in the time it takes for us to get rid of this POS?
Mr. Prodigy on January 9, 2013 at 11:06 AM
What if they don’t have that money either? In fact John Roberts said we don’t have to pay that either, in his confusing opinion.
dogsoldier on January 9, 2013 at 11:08 AM
Obamacare was designed to fail.
RadClown on January 9, 2013 at 11:25 AM
as Prof Reynolds would say, it’s a feature, not a bug
This is all by design, a trojan horse to destroy the private insurance industry (who operate very efficiently and fairly) and fill the void with a single payer system
Remember, the Dems cried bloody murder for a year to have a “public option” in Obamacare, which would have served this same purpose, only faster. Enough moderate Dems (when they existed) knew this was a fiscal disaster, thank heavens
Gee, wouldn’t it be nice if we could experiment with systems like this? Like let one state try one way, one the other?
Oh yeah, we do it’s called federalism
I can self-insure in Texas for $129/month. In NY state, I would be paying $600/month because of all the extra mandatory crap required for a minimal plan, plus guaranteed issue
Guess which system the geniuses in this admin went with?
thurman on January 9, 2013 at 11:26 AM
This was the plan all along. Ushers in single payer because the sheeple will be screaming to the rafters for help with their ginormous health insurance premiums, among other things.
totherightofthem on January 9, 2013 at 11:43 AM
Couple things here.
1) Obama would be thrilled if fewer people bought insurance, because eliminating Big Insurance pretty much creates his single-payer utopia.
2)Don’t forget that the tax penalty escalates. So while it may look affordable initially, it gets more expensive later own.
hawksruleva on January 9, 2013 at 12:05 PM
What evidence is there that he means well? He told a woman on a live ABC forum that maybe her sick grandmother would have to take an aspirin, instead of getting cancer treatments.
hawksruleva on January 9, 2013 at 12:07 PM
Death to it. It’s neither affordable, nor care. What a Geobbelsean naming!
Schadenfreude on January 9, 2013 at 12:17 PM
I work at a doctor’s office. I know some of our patient’s have been forced out of regular Medicare and into a Medicare Advantage plan. I guess they are now finding out just how long they can keep their plan, if they like it.
meMC on January 9, 2013 at 1:35 PM