Obamacare is in Real Trouble
by by jdledell
After several years since it’s’ implementation, the flaws of Obamacare are readily apparent but the Republican Congress is likely to kill it rather than treat it so it can be brought back to health. Just about every Insurance company involved in Obamacare is losing money:
A – United Healthcare is expected to lose $850 million on Obamacare in 2016 and is withdrawing from 31 of the 34 states where they were involved.
B – Aetna is expected to lose about $300 million in 2016 and is withdrawing from 11 of the 15 states where they were involved.
C – Humana also will lose about $300 million this year on Obamacare and will withdraw from 8 of the 15 states where they participated.
These are just a few examples of what the insurance companies have to deal with on Obamacare. At the end of the 2016 open enrollment period, 11.7 million people had signed up for Obamacare. By July, almost 2 million of those people had dropped their insurance and stopped paying premiums. You can bet that none of the 2 million people who dropped coverage were old and sick. It is one of the primary reasons insurance company losses accelerated as 2016 progressed. The stories about the huge enrollment occurring now amounts to about 1 million new enrollees but the total Obamacare enrollment will only be 10 million for 2017.
Flying under the radar of politics and the media is the impact of Medicaid/CHIP (Children’s Health Insurance Program). Part of Obamacare was the expansion of Medicaid in many states. Before Obamacare about 56 million Americans had Medicaid/Chip and after the expansion about 73 million have coverage. This increase of 17 million insureds dwarfs the Obamacare individual policy addition that has politicians in such a lather.
When one looks at the American health Insurance market, government plans are already the major player in healthcare.
A – 145 million – Employer and Small Group Plans
B – 073 million – Medicaid/Chip
C – 055 million – Medicare
D – 013 million – Non Obamacare Individual policies
E – 010 million – Obamacare
F – 009 million – VA healthcare
F – 030 million – Uninsured
What should be done to cure Obamacare’s ills? Quite simply make rates reflect expected health care costs by age. Obamacare mandates that the difference in rates between a 63 year old can be no more than 3 times the rate for a young healthy 20 year old. In actuality, the 63 year old rates should be 10 times that rate for the 20 year old. In fact one of Obamacare’s biggest problems is that a 20 year old can find costs in the regular individual market that are half of Obamacare’s rates while the 63 year old will never ever find a rate as good as he can under Obamacare. Unfortunately, the designers of Obamacare took too much of what makes borrowed community rating practices from HMO’s and modified them without understanding the fundamental differences of the two. You can be sure that the 13 million people covered by non-Obamacare individual health policies are young and healthy since their rates are lower than Obamacare.
The way to handle healthcare in America is to recognize the government plans for Medicaid, Medicare, VA and Obamacare already constitutes almost 50 % of the insured population and we should go further to 100% government partially funded health insurance. In a future post, I will explain more of the details. In the meantime, if Republicans vote to repeal Obamacare(either right away or at some future effective date) without a replacement ready to implement, Obamacare as we know it will cease to exist no later than January 1,2017 as every insurance carrier will flee the market.
After a long career as a Senior Executive with Prudential, jdledell took early retirement to teach piano with his wife of 48 years, Cinder. The two of them established Castle LeDell Music in their home and have 130 weekly students spread out over 7 days a week. In spite of teaching being literally a full-time job, jdledell finds the time to consume vast quantities of Internet commentary and to communicate with his children and other relatives scattered around the globe. While jdledell got polio when he was two years old and now uses a wheelchair full-time, it doesn’t keep him from leading a rich and fulfilling life in Basking Ridge, NJ.