Health care system will need a bailout

Published 10:21 pm Thursday, November 7, 2013

By Staff Reports

 

  1. New woes for HealthCare.gov: Wrong tax info sent out
  2. Latest effort to enroll healthy young adults in Affordable Care Act healthcare faces challenges

It’s not a particularly prescient prediction; the math simply doesn’t work. But more and more experts are making the prediction, so perhaps policy makers should pay attention.

If the Affordable Care Act — Obamacare — collapses, its likely successor will be a single-payer system, which is what many Democrats wanted in the first place.

We made such a prediction as recently as Oct. 27. Now, the American Spectator is warning of the same thing.

Because of the math, writes Peter Ferrera, either taxpayers will soon have to bail out insurance companies as they collapse under the weight of new mandated coverage and too few healthy enrollees, or we’ll soon see “Medicare for all.”

“Next on the horizon is an Obamacare ‘death spiral’ for the private health insurance industry,” Ferrera warns. “Taxpayers will now be told a new bailout of hundreds of billions for the private health insurers must be passed, or else private health insurance will go out of business under Obamacare. That would leave the government in complete control of American health care, especially as he who pays the piper calls the tune.”



And it’s not even the Democrats’ fault this time. Republicans realize that some parts of Obamacare are very popular, and even somehow expected now. As far back as 2011, Mitt Romney was pledging not to undo some of those health insurance mandates, including provisions that force insurance companies to enroll people with pre-existing conditions.

In March, House leaders including Speaker John Boehner and Majority Leader Eric Cantor sent a letter to the White House reaffirming their support for that provision.

“Then there are the Obamacare regulatory requirements of ‘guaranteed issue’ and ‘community rating,'” Ferrera adds. “Those requirements mean that no matter how sick and costly a new applicant for health insurance is when he first shows up, the health insurance company must issue a new policy to them covering everything at standard rates. That is like requiring fire insurance to issue new homeowner policies to those whose first call comes when their houses are already on fire…Those very guaranteed issue and community rating requirements will further contribute to the final crash and burn of the death spiral.”

There’s early indication that, particularly with a faulty website and sign-up process, young people and healthy people aren’t enrolling in the droves we need. But sick people — including those thrown off of high-risk pools that Obamacare dried up — are signing up.

“The premiums the insurers receive from this adversely shrunken pool will not remotely cover the costs of that pool,” Ferrera contends. “Hence they will be facing bankruptcy next year, absent another taxpayer bailout of hundreds of billions. So the choice will be that, or socialized medicine…”

And what’s the likelihood of a massive bailout of private insurance companies? Do Americans have the stomach for such a move? Not for banks, not for Detroit, and not for the airlines, according to polls.

So where does that leave us? With a stronger than ever possibility for a single-payer health care system.

That’s not a scare tactic. That’s just math.