I Spleen ObamaCare

If it appears that Aggie and I are reveling in the stupidity of the American electorate who returned to office the most destructive and ruinous president this republic has ever known, you have us wrong.

While we marvel at the imbecility of the “booboisie” (™ H.L. Mencken), we hardly revel. It’s our money, too:

Health-insurance premiums have been rising—and consumers will experience another series of price shocks later this year when some see their premiums skyrocket thanks to the Affordable Care Act, aka ObamaCare.

The reason: The congressional Democrats who crafted the legislation ignored virtually every actuarial principle governing rational insurance pricing. Premiums will soon reflect that disregard—indeed, premiums are already reflecting it.

Central to ObamaCare are requirements that health insurers (1) accept everyone who applies (guaranteed issue), (2) cannot charge more based on serious medical conditions (modified community rating), and (3) include numerous coverage mandates that force insurance to pay for many often uncovered medical conditions.

Guaranteed issue incentivizes people to forgo buying a policy until they get sick and need coverage (and then drop the policy after they get well). While ObamaCare imposes a financial penalty—or is it a tax?—to discourage people from gaming the system, it is too low to be a real disincentive. The result will be insurance pools that are smaller and sicker, and therefore more expensive.

How do we know these requirements will have such a negative impact on premiums? Eight states—New Jersey, New York, Maine, New Hampshire, Washington, Kentucky, Vermont and Massachusetts—enacted guaranteed issue and community rating in the mid-1990s and wrecked their individual (i.e., non-group) health-insurance markets. Premiums increased so much that Kentucky largely repealed its law in 2000 and some of the other states eventually modified their community-rating provisions.

Have you noticed a proliferation of these bumper stickers?

I usually pull my car over because I don’t want to be anywhere near a driver so impaired. It’s dangerous on the road, and dangerous to the country.

Who’s reveling? We’re just reporting.

PS: And we buried the lede:

But unlike the federal government, health insurers can’t run perpetual deficits. Something will have to give, which will likely open the door to making health insurance a public utility completely regulated by the government, or the left’s real goal: a single-payer system.

Henceforth all reporting will come via the UK’s Daily Mail, whose articles on the shortcomings of Britains National Health Service will turn your hair white.

1 Comment »

  1. Buck O'Fama said,

    January 14, 2013 @ 3:30 pm

    Seems analysts are cutting 4Q GDP estimates in half, to about .8% from 1.5% (2% is considered the “stall” rate where the economy is in danger of lapsing into recession.)

    On top of this, this morning I read that the “unexpected” expiration of the temporary SS payroll tax cut is going to cut .8% off of 1Q GDP. So we may well be in another recession already, just as businesses look forward to 2014 and the ObamaCare turd landing on them full force.

    It’s gonna be a long year (except for politicians, that is.)

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