Obamacare is dying. Let it die.

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It’s no secret that Obamacare is in trouble.

Nearly half a billion dollars in federal money has been spent developing four state Obamacare exchanges that are now in shambles — and the final price tag for salvaging them may go sharply higher.

Each of the states — Massachusetts, Oregon, Nevada and Maryland — embraced Obamacare, and each underperformed. All have come under scathing criticism and now face months of uncertainty as they rush to rebuild their systems or transition to the federal exchange.

The federal government is caught between writing still more exorbitant checks to give them a second chance at creating viable exchanges of their own or, for a lesser although not inexpensive sum, adding still more states to HealthCare.gov. The federal system is already serving 36 states, far more than originally anticipated.

Rich Lowry:

Enrollment is falling short. The Obama administration projects that it will have roughly 10 million people on the state and federal exchanges by the end of next year, a staggering climbdown from prior expectations. The Congressional Budget Office had predicted that there would be roughly 20 million enrollees. If the administration is to be believed, enrollment will only increase about another million next year from its current 9 million and only sign up about a quarter of the eligible uninsured.

Premiums are rising. Not everywhere, but steeply in some states. Indiana is down 12 percent, but Minnesota is up 50 percent. Health-care expert Robert Laszewski points out that it is the insurers with the most enrollment and therefore the best information about actual enrollees who have tended to request the biggest increases — a sign that they don’t like what they’re seeing in their data.

Relatedly, the economics are shaky. According to a McKinsey & Co. analysis, last year health insurers lost $2.5 billion in the individual market that Obamacare remade. Obamacare co-ops that were supposed to enhance choice and lower costs have been failing, and almost all of them are losing money, a victim of the absurd rules (no industry executives on their boards, no raising capital in public markets, etc.) imposed on them by the law.

High risk pools were already running out of money.
Contrary to Obama’s promises (shocked face), rates are going up:

Many people signing up for 2016 health policies under the Affordable Care Act face higher premiums, fewer doctors and skimpier coverage, which threatens the appeal of the program for the healthy customers it needs.

Insurers have raised premiums steeply for the most popular plans at the same time they have boosted out-of-pocket costs such as deductibles, copays and coinsurance in many of their offerings. The companies attribute the moves in part to the high cost of some customers they are gaining under the law, which doesn’t allow them to bar clients with existing health conditions.

These dual realities threaten to undercut the law’s popularity with the customers it relies on the most: relatively healthy people. Their participation is vital to offset the costs of sicker people who can buy coverage at equal prices for the first time under the law; if the healthier ones pull out, that would put additional upward pressure on premium prices.

Premiums for individual plans offered by the dominant local insurers are rising almost everywhere for 2016, typically by double-digit percentage increases, according to a Wall Street Journal analysis of plan data in 34 states where the HealthCare.gov site sells insurance.

Insurers are threatening to leave:

UnitedHealth Group UNH +1.79%, in a surprising announcement, said this morning it has revised its profit expectations for the rest of the year due to what it called a “deterioration” of its individual commercial insurance offerings on government-run exchanges under the Affordable Care Act and offered no commitment it would stay in the business beyond next year.

The nation’s largest health insurer said it was “evaluating the viability of the insurance exchange product segment,” pulling back on its marketing efforts for individual exchange products for next year and “will determine during the first half of 2016 to what extent it can continue to serve the public exchange markets in 2017.” The insurer sells individual plans on public exchanges in 24 states and covers more than a half million Americans in these plans.

We here have predicted that rates would jump big time once the risk corridors expire in 2017. Risk corridors are subsidies to cover losses to insurance companies participating in Obamacare and keep rates artificially low. When they’re done, boom:

The ACAt’s authors created these two programs for a specific reason: They would ease the transition from the pre- to the post-ACA health care system. In the post-ACA world, health care is more expensive — a fact borne out by 2014’s average 41% spike in base premiums. Re-insurance and risk corridors have largely hidden these price increases from consumers for the past year; they will continue to do so until Jan. 1, 2017.

Premiums likely will skyrocket come that date. The Medical Industry Leadership Institute’s study estimates that once the two subsidies expire, premiums for a cheap bronze plan in Wisconsin could increase by a staggering 96% for individuals and by 46% for families.

The regime knows this is coming and they’re setting the stage for unending subsidization of Obamacare:

The Department of Health and Human Services attempted to reassure private insurers on Thursday that they’ll be able to recover losses from participating in Obamacare by claiming it was an “obligation” of the U.S. government to bail them out.

At issue is a provision within the law known as the risk corridors program. Under the program, which runs from 2014 through 2016, the federal government is to collect money from health insurers doing better than expected and use those funds to provide a federal backstop to other insurers who incur larger than expected losses from rising medical claims. The idea was to provide training wheels to insurers in the first years of Obamacare’s implementation, and to take away any incentive for insurers to cherry pick only the healthiest customers.

Obamacare is “unexpectedly” failing to live up to its promises:

Now that insurers have been able to look at medical claims, what they’ve found is that enrollees in Obamacare are disproportionately sicker, and losses are piling up. For the 2014 benefit year, insurers losing more than expected asked for $2.87 billion in government payments through the risk corridors program, but HHS only collected $362 million from insurers performing better than expected. Thus, the funds available to the federal government only amounts to 12.6 percent of what insurers argue that they’re owed.

Insurers are bleeding and they see no end to the hemorrhaging:

The insurer announced losses of $425 million on ObamaCare plans, and CEO Stephen Hemsley said, “We cannot sustain these losses,” and “we saw no indication of anything actually improving.”

Hemsley pointed to enrollees who were older and sicker than expected and in many cases gamed the system by waiting until they were ill to sign up. “We can’t subsidize a market that doesn’t at this point appear to be sustaining itself.”

As I said earlier this year:

We here predicted this a long time ago. There is simply no way you’re going to eliminate pre-existing conditions, add illegals to the rolls of free health care, add millions of new Medicare patients and lower health care costs.

Last year I wrote:

Obamacare is going die slowly. It has become a giant gas bag and as the little enthusiasm that exists for it now wanes it will cool into something no longer recognizable after all the “fixes.”

Now we’re “obligated” to bail it out? I don’t think so.

In 2009, Obama said “If you misrepresent what’s in this plan, we will call you out.”

He did repeatedly, and now we will.

Obamacare is dying. Republicans really don’t need to waste any more time on repeal. It’s going to die on its own. All the GOP needs to do is to not once again snatch defeat from the jaws of victory. Obama and the democrats got exactly what they wanted. They shoved Obamacare down our throats. They wrote the law unilaterally. They were inflexible, unrelenting, uncompromising. That is what the GOP should offer in return now.

Pass the popcorn and let it die. It’ll be great fun watching the Obama legacy go down in flames.

DrJohn has been a health care professional for more than 30 years. In addition to clinical practice he has done extensive research and has published widely with over 70 original articles and abstracts in the peer-reviewed literature. DrJohn is well known in his field and has lectured on every continent except for Antarctica. He has been married to the same wonderful lady for over 30 years and has three kids- two sons, both of whom are attorneys and one daughter on her way into the field of education. DrJohn was brought up with the concept that one can do well if one is prepared to work hard but nothing in life is guaranteed. Except for liberals being foolish.

30 Responses to “Obamacare is dying. Let it die.”

  1. 2

    Enchanted

    This is no surprise. Obamacare has nothing to do with health care but control of the people. I saw a commercial where the spokeman said it was against the law not to have health insurance.

    Two of my sister’s doctors shut their practice because of obamacare; my nephew who makes 22k a year can’t afford the premium or the deductible and was told he makes too much money to get a subsidy. I did his taxes last year and he had to pay a penalty of $119 because he has no insurance. This year the percentage will be higher. My brother has MS . He requires 24/7 care, lives in an old folks home since he was 45 ( now is 51) and only has use of his right hand ( and of course he is left handed). The care he receives is abysmal and they are just waiting for him to die. Afterall obamacare is for the young and healthy not those like my brother who are a strain on the health care system. This is the same as the encouragement of abortions in the plan. As the democratic congressman ( name slips my mind but it is on youtube) That said on the floor while it was in debate that babies being born were a burden to the healthcare system.

    Remember 100% of democrats voted for obamacare.

  2. 3

    Reem

    It always amazes me how those on the right would try to dismantle that which is designed to help their own while being hoodwinked by liars of the corporate right.

    The success of the Affordable Care Act is a hugely inconvenient truth for its opponents
    https://www.washingtonpost.com/posteverything/wp/2015/09/21/the-success-of-the-affordable-care-act-is-a-hugely-inconvenient-truth-for-its-opponents/

    Obamacare Has Been Even More Successful Than Expected
    http://www.nytimes.com/roomfordebate/2015/06/11/has-the-affordable-care-act-proved-its-worth/obamacare-has-been-even-more-successful-than-expected

  3. 4

    Pete

    Now HHS is blathering about an “obligation” for the federal government to bail out the insurers who have lost over a billion on obamacare payouts. That means TAXPAYERS.

    Screw the insurance companies that lobbied for obamacare, with the damnable risk corridors, which were temporary hedges against the inevitable failure of this socialist nightmare. Every single worthless promise of Obama and his power-hungry leftist cabal on the wonderful utopian medical system and economic benefits of obamacare has catastrophically failed just as anyone with common sense predicted would occur. Gruber was caught multiple times on video talking about the manipulations the Obama regime went to in order to get this damnable power grab crammed down our throats. The thrice damned RINOs in congress who have refused to defund obamacare, and on SCOTUS who have turned clear language upside down to falsely declare obamacare constitutional.

    If the republicans give in and fund this, then there is no reason to support it as an organization ever again. Let obamacare fail under its own weight as the damnable abomination it has always been.

  4. 5

    Petercat

    Let it die.
    Let health insurance become truly free market- no interstate trade restrictions.
    The only mandate that I would apply would be insurance company ownership of illness. That is to say, if Wendy, while covered by insurance company A, contracts cancer, then company A owns that cancer and must pay for the treatements, no matter Wendy’s life situation. If she becomes unemployed and cannot pay the premiums, she is still covered by the insurance, but only for the illness that began while she was insured.
    That’s how Workman’s Comp works, and it’s not in trouble.
    My knee is covered for the rest of my life.

  5. 6

    Andrew_M_Garland

    Drjohn: “Obamacare is dying. Republicans really don’t need to waste any more time on repeal. It’s going to die on its own.”

    Maybe the Republicans don’t need to immediately repeal O’Care, but they do need to present their written, detailed plan for their replacement regulation of US medicine. That should include a massive de-regulation with the aim of allowing a free market in services and prices. Medicaid, Medicare, and government pressure must stop shifting costs onto other sick people with insurance.

    The states have a big hand in the problem. State rigid regulation of health insurance causes the buyer to be insulated from health costs. The insured must be able to benefit from being frugal in their use of resources, or there is no brake on the services demanded.

    Otherwise, the collapse of O’Care will merely empower FedGov to implement something worse, something much closer to the Socialist ideal.

  6. 7

    kitt

    It was always designed to fail, to usher in single payer. Would I like to see the insurance companies get reimbursed for losses from the tax payer pocketbook, no most voters did not want this monster.
    Well if AHC is suffering can we put a bullet in its head. Why the hell do they expect the republicans to repair/replace it…damn please get the government out out out of healthcare.

  7. 8

    Petercat

    @kitt: #6
    “Why the hell do they expect the republicans to repair/replace it…”
    Because them’s the rules. Liberals break it, Conservatives fix it.
    If only we had a Conservative majority in congress, fixing Obamacare wouldn’t be a problem.
    The way to fix a valueless item is to throw it away

  8. 11

    kitt

    @Greg: It must be painful.
    It will be efficient if they know not 1 dollar bailout if you fail. Let the free market take care of it, Doctors and hospitals should post prices for testing , insurances should be free to compete across state lines.
    The feds efficient? hey you still havent answered my question how many depts and/or agencies comprise the federal government?

  9. 12

    john

    Talk about living in the rush bubble
    Let’s see what Gallup has to say about ACA (Obamacare)
    Well 51% vs 45% say that the government SHOULD ensure healthcare
    http://www.gallup.com/poll/186782/say-gov-ensure-healthcare-coverage.aspx?g_source=Healthcare&g_medium=newsfeed&g_campaign=tiles
    And the newly insured through exchanges are VERY happy in fact MORE pleased than those with private insurance http://www.gallup.com/poll/179396/newly-insured-exchanges-give-coverage-good-marks.aspx
    Everyone is entitled to their own opinion, but not to their own “facts”

  10. 13

    Common Sense

    @Greg: Greggie Greggie Greggie, no one is more idiotic than you when it comes to understanding the administration of healthcare!! Quality of care has suffered beyond believe thanks top Obolacare !! Obola said it would cost less and that was a lie, he said if you like your health insurance and/or doctor you can keep them “period”, and now our government pays for the murder of innocent babies. Private care in medicine just as in business drives the highest quality and most efficient product. Managed care drives nothing, less is moe in this model and rather than having an efficient office driving maximum patient care we have employees and all levels with the attitude that it doesn’t make any difference how fast I work and I want more time off and more pay!! I have spent 42 yeas involved in healthcare and this experience includes domestic clinical, sales, and marketing. I have also spent 10 years selling globally to all markets in the world. There is NO better care than US privately managed Greggie. Also and I doubt you would even know this, but Obolacare has yet to be managed at the group level. When that hammer drops the 5-6 million who lost their care due to Obolacare with private plans will be minimal compared to this disaster!! Obolacre will NOT remain the law of the land Greggie because it is a loser. Obolacare is one of the primary reasons Republicans took back the House in historic numbers in 2010 and played a huge roll as well when Republicans took the Senate in 2014. Obola lied to get elected the first time around about Obolacare and he lied second time around when he told America Al Qaeda was on their heels. Reggie, on the subject of healthcare you would be better to keep your mouth shut to avoid the ignorant BS coming out of it on this topic!!

  11. 14

    kitt

    @Reem: Lowering costs? In my county there is 1 provider, that provider increased on bronze level from $320.00 for single person to $450.00 in 2015 no competition at all no choice. That same provider is pulling out of 3 states because they are being constrained from gouging the tax payers. Is that what you call success? The elderly did not get a raise there is no inflation, according to the government, but insurance companies are allowed to raise rates as they please? In Wisconsin expected to go up 96% Get government out of health care, they cant keep any of their programs in control. Fewer and fewer doctors can afford to accept medicare patients. Talk to your doctor see what it is like on the front lines of government healthcare.

  12. 15

    Bill

    @Pete: Indeed. Some states saw that there was an end to the subsidies and opted out of this grand “success” (for you, john) and their foresight will be rewarded. The rest, the liberal states, followed their practice of living on borrowed money and kicking the can down the road… hopefully, something will miraculously fix things.

    @Greg:

    To be clear, it’s the state-run exchanges that are doing so poorly. The federal exchange is far more cost effective.

    Yes, let’s DO be quite clear. State run exchanges were supposed to be the case in all 50 states. Imagine the disaster if they ALL had believed Obama.

  13. 16

    Greg

    @kitt, #11:

    Let the free market take care of it…

    Leaving it to the free market is how we got to the point where tens-of-millions of Americans who needed access to healthcare the most couldn’t buy insurance. The free market environment is the setting in which the cost of medical goods and services had been skyrocketing upward, far more rapidly than any other component of the U.S. economy, and long before Obamacare existed. It’s how we got to CT scans that can cost well in excess of $1000 in the United States, but less than $100 in Japan.

    Obamacare only exists because the party that now claims to have “better solutions” ignored such problems for years. I don’t see where they suddenly have better ideas. Every scheme they suggest involves a restoration of one or more of the problems Obamacare is designed to fix. Their central theory is that government is an incompetent manager of just about everything—which I will admit can seem like an entirely plausible theory, if you observe how incompetent they themselves are when given the responsibility of governing.

    What we should focus on is the improvement of what we’ve got. It’s not particularly smart to burn down the new barn because you find fault with some of it’s features. You make alterations. The republican Congressional majorities won’t consider that, however, because they’ve turned Obamacare into a political football. Keeping it as an item of controversy is far more important to them than dealing with the nation’s healthcare problems.

  14. 17

    kitt

    @Greg: The sky rocketing cost of healthcare began with medicare. Skyrocketing education with government subsidized loans. Housing collapse with government pressuring banks to loan to those unqualified. getting a pattern here? The less government the better. Seems everyone thinks its ok to rip off the government, colleges see low interest government backed loans so jack the tuition, medicare is rife with fraudsters. And the poor need housing no matter they cant afford the payment just balloon it. Make sure they have PMI. As medicare when it isnt fraud doesnt cover the doctors business expenses he has to charge everyone else more.
    Now isn’t it time for your electro shock treatments.

  15. 18

    Greg

    @kitt, #17:

    Republicans love to complain about Medicare and Social Security, but the vast majority would be up a creek without them. Shift the topic to their own situations, and the story quickly changes to how they’ve earned every penny of value they receive from such programs.

    And don’t lay all of Medicare’s financial woes at the feet of democrats. It took republican geniuses to create an enormously expensive Medicare prescription drug program that had no defined mechanism to raise the revenue necessary to pay for itself, and that specifically forbade the administrators from bargaining for lower prescription drug costs like any private insurer is able to do.

    Republicans simply alter history and facts as needed to support their story, and rely on an uninformed and deliberately misinformed support base to get away with it. Systems like Medicare and Social Security are essential components of any modern and prosperous national economy.

  16. 19

    kitt

    @Greg: I agree part D SUCKS, I can’t see why you cant admit you were led down the rosy path.
    After driving a stake thru government healthcare, let the gov control the malpractice insurance a huge expense for doctors and hospitals. Allow insurance to compete, Obamacare has set up monopolies in areas, no choice no rate controls. There were real problems the government could have dealt with but they shoved a monster with so many taxes and fees, robbed medicare to get it off the ground. I have no problem with medicare I have a problem with those that defraud the system. Maybe they could afford to pay the doctors a reasonable amt if they cleaned house moved faster on reports of fraud.
    I do not think There will be money in Social security for me, I pay the tax and justify it to myself that my mom uses the programs.

  17. 20

    Greg

    @kitt, #19:

    The state monopoly was hardly Obama’s invention. The current situation should be credited to the McCarran-Ferguson Act of 1945. It would be up to Congress to repeal or modify that. Maybe someone should drop a note into their suggestion box.

  18. 21

    Bill

    @Greg:

    Obamacare only exists because the party that now claims to have “better solutions” ignored such problems for years.

    Based upon the havoc wreaked upon health care by the liberal “solution”, perhaps the reason a rework has not happened is because it is difficult and simply forcing people to do things is not the answer.

    Looking a what we have for healthcare at this moment, it appears we had it pretty good in the pre-Obamcare days.

    Yet another example of liberals screwing everything up. Everything.

  19. 22

    Greg

    I haven’t noted any havoc. I’ve noticed a propaganda campaign in the media, with a lot of unsubstantiated claims of havoc. I’m also aware that a lot of corporations have used Obamacare as cover for dumping employee and retiree health insurance benefits. Doing so is actually a cost-cutting measure. There’s also been a wholesale unloading of private sector pension obligations onto the taxpayer. They’re going to break the Pension Benefit Guaranty Corporation. And then they’ll blame the government.

  20. 23

    Pete

    @Greg:

    What an unmitigated crock of crap.

    Thankfully, I am not one of those forced into the epic failure of obamacare. Yet when I have called to make an appointment with a physican’s office the first question out of their mouths is “What insurance fo you have?”. When I told them, the next question was, “Is that an obamacare policy, because we don’t accept those.”

    When I call outpatient physicians to coordinate care when I am trying to discharge patients from the NICU, they always ask if it is medicaid or obamacare, before they are willing to accept them.

    Obamacare is a failure, as it was designed to be. Let it die.

  21. 25

    kitt

    @Greg: McCarran-Ferguson Act of 1945 under Teddy R., Democrat and the closest we ever got to a king. Loads of interesting supreme court decisions during that admin too.

  22. 27

    Greg

    @kitt, #25:

    I know you meant Franklin.

    70 years is a long time, but that doesn’t mean the McCarran-Ferguson Act is immune from alteration or repeal. As pointed out, the current Congress has had nearly a full year to address this problem and remove restrictions that prevent the creation of a national insurance marketplace. If they’re not doing it, it’s because they don’t want to.

    A republican-majority Congress had no problem effectively appealing the Glass-Steagall Act in 1999, and it had been in place since 1932.

  23. 28

    kitt

    @Greg: True but severely constrained by a President that would not sign it into law. There are other measures that could be taken but again there are political blocks to reform. In my unicorns and rainbows land there would be a clean bill law, no pork or attached laws. All regulations would be reviewed to see if they are constitutional and rewritten by english majors to high-school level reading comprehension. Fewer laws would be broken if people could understand them.
    (And I could write off my dog as a dependant 😉 )

  24. 29

    Common Sense

    @Greg: Greggie Greggie Greggie, the government under Obola, Pelosi, and Reid ARE to blame. That’s why Republicans now control the Peoples House and the Senate!! Obola lied about his health care abortion and he still’s lies about it!!

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