Is Obamacare Resilient Enough to Pull Through?

[XLFD]

It has been over five and a half years since the Affordable Care Act (Obamacare) was passed.  It has been challenged in court, and prevailed; In 2012, the Supreme Court sustained the power of Congress to enact the law in NFIB v. Sebelius. Three years later, it held that the ACA allowed for the payment of subsidies for all applicants who enrolled through either the state or federal exchanges.  It will not be defeated in the courts.

The unpopularity of the law was instrumental in turning both houses of the US Congress from Democrat to Republican control in the years since.  With a firm majority in both, but without a supermajority, nothing credible has been done to repeal the law.  The likelihood of it happening in the future is bleak especially as long as a sympathetic leader sits in the White House. 

But even though there is not the political or legal will to effectively combat the ACA, there is still a fair chance that it may kill itself off, because of the unsustainable nature of Obamacare.  Even now, many insurance companies are increasing their rates between 25 and 35 percent as they adjust to the “shock waves set off by the Affordable Care Act” in the marketplace.

A recent article in "The Week", reprinted below with the link to it following, discusses what looks like a slow drip death for Obamacare due to it's inability to have a strong foundation.  To cure its ills, Progressives/Socialists will use the fatal diagnosis to introduce plans for a single-payer system, while true conservatives/libertarians will attempt to prescribe a free market principle diet.  Either way, the experiment will have been costly, and the Interferon might not ever be applied.

President Obama has been hammered for his failure on ISIS in the wake of the Paris attacks. But there's at least one bright spot for him in that criticism: At least it deflected the spotlight from the unfolding catastrophe that is Obamacare.

Indeed, last month brought arguably the worst news for the program since the healthcare.gov debacle: UnitedHealthcare, the nation's largest insurer, announced that it might quit Obamacare's exchanges next year. Should UnitedHealthcare act on this threat, there may not be enough (red) tape in the desk drawer of even future President Hillary Clinton to put the Obamacare Humpty Dumpty back together again.

United announced during an investor briefing Thursday that it was expecting a whopping $425 million hit on its earnings this year, primarily due to mounting losses on its Obamacare exchange business. "We cannot sustain these losses," United CEO Stephen Hensley declared. "We can't really subsidize a marketplace that doesn't appear at the moment to be sustaining itself."

Avik Roy, who serves as GOP presidential candidate Marco Rubio's health care advisor, suspects United may just be the first domino to fall. Other commercial insurers, such as Aetna, Anthem, and Cigna, have raised premiums by double digits and still say they can't make the numbers work in their favor. Hence, they have withdrawn from counties where their losses were particularly acute.

For-profit companies that have shareholders breathing down their necks don't have much latitude to absorb losses. But even companies that don't face similar profit-maximizing pressures can't escape the basic dilemma confronting the industry. For example, state filings of the non-profit Blue Cross Blue Shield show that the company barely broke even in the first half of 2015. In Texas last year, BCBS collected $2.1 billion in premiums and paid out $2.5 billion in claims. If Obamacare's condition worsens, such companies will have to scale back their participation too.

And Obamacare's condition will worsen. Why? Because not only are far fewer patients enrolling in the exchanges than projected, but those signing up are too old or sick for anything resembling a balanced risk pool.

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.)

The best medicine for the exchanges? It might involve letting the insurance industry offer pared back, cheap coverage at prices that reflect the risk profile of patients. This would bring back the young invincibles, but jack up prices for sicker patients. That problem could be solved by targeting subsidies on these patients on a strict means-tested basis rather than showering them on everyone up to 400 percent of the poverty level. The crucial upside to this approach is that it would allow the insurance marketplace to function again. However, market pricing based on health is against the religion of liberals. Clinton won't go there. She could twist the screws on opt-outs by raising their penalty to something close to the price of the coverage they are refusing. But that would require Congress to override the statutory limits on these penalties in Obamacare. And so long as the House remains in Republican hands, that ain't going to happen.

Hillary's only other option will be to impose price controls on the health care industry. She's recently taken to demonizing drug companies but, notes Roy, they account for only 12 percent of health care costs. The real "savings" that could lower the price of coverage would be from going after doctor and hospital reimbursement, but that would be the political equivalent of stepping on a land mine.

Obamacare is falling apart limb by limb, and there is really no keeping it together. It could well become President Obama's Iraq: A costly and conceited intervention that destroyed an imperfect but functioning system just because it didn't fit his utopian designs.

http://theweek.com/articles/589920/quiet-unraveling-obamacare?utm_s...

[Willy]

Wow. I hope the health care system can survive the progressive ideology. If health care providers cannot make enough money to continue to exist and are forced to close their doors we could see an end to the World's best system. I found a video that explains one of the "twisted" ways that is causing our health care system to hemorrhage. It explains how Obama care is being used to transfer money from people who have "more than they should have" to "those that should have more". The typical insane socialistic mentality that is going to bring us to our knees. Sorry about the buzzing noise in this video.

[XLFD]

The video is three and a half years old, and meant as a warning to the impending 'problems' of Obamacare, so it is a little dated in that respect.  Of course, it looks legit and one wonders how those numbers have went since then. 

Willy, you're pretty good at researching things, see whether you can get something from this year regarding these numbers that look pretty daunting.  Families making around $50,000 having to spend over a quarter of their income on health care payments is ridiculous.

[Willy]

I found the video below but it doesn't address the information you asked about. It explains how a person's premiums are figured after subsidies. It's a propaganda piece, I'm sure, and I'm wondering just how many people will understand it. I was laughing when I saw it while I imagining the average Obama dummy supporter trying to figure out where the "simple and easy" use of the program comes into play. I'm sure most people will be scratching their heads after seeing this.

[Dave]

And the hits keep coming for Obamacare.......

CBO: 2 million jobs' worth of hours lost under ObamaCare

ObamaCare will force a reduction in American work hours — the equivalent of 2 million jobs over the next decade, Congress’s nonpartisan scorekeeper said Monday.

The total workforce will shrink by just under 1 percent as a result of changes in worker participation because of the new coverage expansions, mandates and changes in tax rates, according to a 22-page report released by the Congressional Budget Office (CBO).

“Some people would choose to work fewer hours; others would leave the labor force entirely or remain unemployed for longer than they otherwise would,” the agency said in its latest analysis of the now five-year-old law.

The CBO is not predicting that employers will fire millions of workers or reduce hours because of the law, but that the law changes incentives over the years for the workers themselves both in part-time and full-time positions.

That could mean that older Americans who wish to retire but have remained in the workforce solely for employer health benefits could opt to leave their jobs.

Republicans were quick to seize on the report, which provides an update through 2025.

“When the President’s health law hurts the labor force at the same time it increases healthcare premiums and taxes, it’s clear the law is not working for the American people,” said Senate Finance Committee Chairman Orrin Hatch (R-Utah.).

“The CBO’s latest report confirms yet another broken promise and negative consequence stemming from Obamacare.”

The administration in the past has argued that the CBO figures also reflect new flexibility provided to workers through the healthcare law. It has also repeatedly disputed claims that the law is a "job killer" by pointing to the new jobs created with the millions of people who gained healthcare coverage.

From the month ObamaCare became law, "the private sector has added 13.7 million jobs over 69 straight months, the longest streak on record," a White House spokeswoman said.

The lower numbers could also mean that older Americans who wish to retire but have remained in the workforce solely for employer health benefits could opt to leave their jobs.

The CBO said its estimates were still based on uncertain evidence, citing, for example, that it does not know yet how people will respond to the work incentives created by the law.

The report comes just days after the Senate voted for the first time to send a repeal of the biggest pieces of ObamaCare to the president’s desk. Speaker Paul Ryan (R-Wis.) pledged last week, during his most significant speech to date, that he planned to roll out a replacement plan for the healthcare law next year.

http://thehill.com/policy/healthcare/262360-cbo-projects-2-million-...