Even the administration has admitted that ObamaCare enrollment has essentially flatlined, with only 1.3 million new members expected to buy coverage next year, compared to the 8 million projected when the law was passed. This means that overall enrollment by 2016 will be somewhere between 9.4 million and 11.4 million. That’s half — half — of the 21 million initially predicted. So much for universal coverage!
The reason for this pathetic take-up rate is that the lavish benefits — in-vitro fertilization for 50-year-old women, for example — that ObamaCare mandated for qualifying plans have backfired. This mandate was intended to make sure that the young and healthy would purchase full — not bare-bones, catastrophic — coverage so that they would offset the cost of sicker patients. Instead, it has forced companies to jack up rates so much that only those eligible for full subsidies (the relatively poor) or the sick find it worth their while to buy coverage. The relatively young and healthy are opting to pay the penalty and “go naked.” This, in turn, is forcing insurers to raise prices even more, which is causing more healthy people to drop out, unleashing the dreaded adverse selection spiral.
ObamaCare tried to prevent this downward spiral by, ironically, insuring the insurers against losses until 2017 through something called the risk corridor provision. Basically, the plan was to shake down companies making higher than expected profits and handing their proceeds to companies with higher than expected losses. Setting aside the perversity of forcing successful companies to subsidize failing competitors, the program hasn’t worked because the entire industry is confronting losses and Congress has barred the administration from dipping into general funds — aka taxpayer pockets — to bail it out. (United withdrew partially because it sees no relief in sight from the government. “We see no indication of anything actually improving,” CEO Henley said.)