Are insurance companies the new "victims"? For awhile, it's been seeming that way and people silly enough to pin the failures of Obamacare by citing the "plight" of insurance companies tend to come up with similarly silly concepts of "fixing" Obamacare by "saving" insurance company profits.
For example, read Paul Demko's analysis of North Carolina's experience with exchanges and the "fixes" he comes up with, falling into the trap of misidentifying the rotten roots of Obamacare, its original premises and intentions, and therefore offering outlandish "saves" for the "victims"--insurance companies ["Obamacare’s sinking safety net," by Paul Demko, http://www.politico.com/agenda/story/2016/07/obamacare-exchanges-states-north-carolina-000162].
Mr. Demko plunges right in asserting that "The central pledge of the Affordable Care Act was to make insurance available to people who didn’t have it, creating a new safety net for millions nationwide," neatly trimming the broken promises of Obamacare into simply a promise to get people insured--enrollment ignoring the most noteworthy broken promise of Affordability (remember those savings of $2,500 a year?) and the promise of quality health insurance (remember Obama's promise of coverage like his family has?) as well as the 2014 "surprise" of the individual mandate, forcing people to purchase or pay a fine (the individual mandate), which for most of us in the real-world now know did not refer to affordability for the nation of consumers who put the President in office.
Framing his assertion of the purpose of Obamacare to narrowly ONLY include enrollment, which was mandated by the law or else pay a penalty, Mr. Demko piggybacks the number of newly insured in, specifically NC, as Obamacare's success, again ignoring the reality that not only has Obamacare enrollment (NC doesn't have expanded Medicaid, so it's exchange enrollment) has not only disappointed government estimates every year, but has disappointed insurance goals, to capture the young-healthy working people who buy insurance and are least likely to have to actually use it (make a claim).
But Obamacare was rotten from the start. After all, Obamacare, which applies to American citizens, had a finite pool of people it could force to get health insurance. While insurers and government foamed at the mouth about the 47 million untapped customers, in actuality it's proven to be less, much less than that year after year.
And the number's not budging because very simply, once you've force everyone with sufficient income to purchase health insurance then you've reached the END of who you can force to purchase health insurance. There is nobody new to force to purchase health insurance, especially in an economy with persistent unemployment and poverty which EXEMPTS the poorest individuals from such forced purchase which is why Obamacare's rotten roots--the FORCED purchase of a financial product, even with government entitlement payments in the form of premium assistance and cost-sharing has failed to prop up the initial "jump" in annual enrollments leading to a chronic annual under-performance of who would get insured of the (47 million uninsured) through the exchanges with this year's number as Demko confesses, "The Obama administration’s stated goal is now just 10 million enrollments by the end of 2016."
If you're unconvinced that the POOL of forced enrollment where the government offered its working citizens up as a sacrifice of consumer well-being to the financial product of health insurance with its COMPELLED purchase, has "disappointed" the insurance companies, see Hillary Clinton who directly tips her hat to insurers and offers the prospect of NEW enrollees and a promise to let anyone REGARDLESS OF IMMIGRATION STATUS, [completely contrary to the Obamacare law] have the chance to BUY-IN and providing for new incentives for consumers to buy-in on exchanges with new tax credits only for entitlement recipients (https://www.hillaryclinton.com/issues/health-care/) to keep the insurance companies "happy."
Briefly Mr. Demko tosses in the stray line that "Thanks to the ACA… far more of them can afford their health insurance," referring specifically to the entitlement payments, premium assistance and cost-sharing paid by the Federal government to the limited number of consumers (the 10 million) enrolled in exchange plans, 85 percent of whom (eight and a half million) who receive such entitlement payments.
However, Mr. Demko ignores that the failure of Obamacare to protect consumers' wallets, the rotten roots of the law, so that after being forced to purchase a consumer financial product consumers are looking for the cheapest way to do that.
This also is exposed by the government that confessed that people were choosing bronze plans instead of more expensive plans even though cost-sharing is not available under such bronze plans. Who are the ones choosing the cheaper plans? The young-healthies, “Outlays for cost-sharing subsidies over the 2015–2024 period are currently projected to be $39 billion less than previously estimated, primarily because CBO and JCT now expect that more people will forgo those subsidies by choosing to enroll in a bronze plan instead of a silver plan,” CBO, 1/15/15, page13.
Where else is the proof of the NON affordability of the plans, the rotten roots of raiding consumer wallets come in? Even Mr. Demko notes that enrollment estimates always end up lower because year after year they "erode as people stop paying their insurance bills."
Demko's failure to acknowledge the rotten roots of Obamacare--that there are no new people to force to purchase health insurance which in turn means that insurers have no hopes of gaining new enrollees (unless the birth rate spikes or, as Hillary proposes illegal immigrants are allowed to enter the marketplace) so that insurance companies will continue the very behaviors that led to our "healthcare crisis," by raising rates, cutting coverage, increasing consumer cash expenses of increased deductibles, copays and coinsurance to increase their profits, means that his recommendations for "fixes" are based on the equally rotten roots of Obamacare and are doomed to the same results--failure.
For instance, Mr. Demko, explains the enrollment failure on employers not dumping more employees into Obamacare and offering plans. In this he completely ignores the Obamacare law that incorporate demands that employers (of a certain size) offer health plans to their employees or face the EMPLOYER MANDATE penalties--illustrating NO intent that the Affordable Care Act would lead to the demise of employer health insurance offering but instead RELIED upon it. Yet, Mr. Demko seems unhappy with the result as bad for insurance companies on the exchanges and their "actuarial health."
In discussing the new victims--insurance companies--Mr. Demko commits himself to the gravest lie of all, grave because it jeopardizes the financial and physical well-being of every American, asserting that insurance companies didn't get enough of the young-healthies who pay premiums and won't make claims as part of their "pool," instead of addressing the inadequacy of today's INSURANCE PLANS, which formerly justified premiums based on covering the IF, the possibility that you might get sick or injured in exchange for a payment that if you're lucky enough not to get sick (premiums) is money down the drain each year.
But Obamacare's most rotten and inhumane commitment is to the insurance company scam of covering prevention as a replacement for covering illness in order to maximize people who simply pay and never make a claim or only use checkup services that have finite costs and minimize by any means possible those who are likely to make claims--a product which NO consumer in their right mind would purchase.
Consumers are onto this one too, especially the young-healthies. The Preventive Care Fallacy--that by Prevention and education insurers can distract consumers away from non-coverage and/or increased costs for the unanticipated costs of human frailty whether it's illness or accident by recreating insurance as a policy to cover finite healthy person costs of checkups instead of a contingency product for those who get sick that encourages defensive medicine and free checkups and fails people in covering the ever-rising costs of getting treatment for needed medical expenses is not getting them their desirable customers for this faux-coverage, the people least likely to need medical services--the young healthies.
Instead, as evidenced by every measure, the young-healthies are sensibly not willing to purchase higher cost health insurance plans for the very reason Obamacare needs them--they don't anticipate needing medical services and care.
Mr. Demko blames young healthies as screwing up risk pools because "they don't think they'll need health care," ignoring the 47 million uninsured that included millions upon millions who opted out of purchasing the consumer product of health insurance because it was inadequate and cites the young healthies as THE reason for the individual mandate--get them into the risk pool.
But Obamacare and Mr. Demko did NOT anticipate that the flaw of the health insurance products, that they pay for too little NEEDED medical care and cost too much, would far exceed even the LEGAL requirement to purchase health insurance so that young healthies considered their options--whether it was eligibility for Medicaid, utilizing their parents' insurance until they were 26, opting into cheaper catastrophic plans available to all those under the age of 30, or purchasing cheaper bronze plans, or even purchasing short-term limited duration plans to avoid the burden of paying for more coverage (CMS in June just tightened restrictions on short-term health insurance https://www.cms.gov/Newsroom/MediaReleaseDatabase/Fact-sheets/2016-Fact-sheets-items/2016-06-08.html).
The "preventive" model also backfired as young-healthies realized that the fine line between checkup and services for which you're charged exorbitant amounts was as fragile as being sent for an additional test, and additional follow-up, or simply and additional appointment making those free checkups a lot less valuable.
Then there's the overkill--Now that insurers were forced to cover free checkups, and physicians were incentivized to order free stuff because at least it wouldn't cost consumers money out of pocket AND it provides providers with more payout, INSURANCE companies are on the hook for paying for these checkups, tests, et cetera that are all part of PREVENTION and have become a veritable cottage industry for providers--racking up costs for TREATING THE HEALTHY.
The rotten roots flawed reasoning of Demko and Obamacare itself goes further as he argues that the insurers simply mis-guessed how much they would have to charge to make money. Not true, the three Rs were designed to bribe insurers to participate on exchanges by providing a 2014-2016 payoff to insurers who participated to protect them from losses. They were not intended to be permanent.
It should be of concern that Mr. Demko seems to think the payoffs are or should be permanent (again outside the law) as he states that the government is "weighing changes starting in 2017," opening up a never intended, new Obamacare provision for dumping yet more money into Obamacare that was NEVER intended to happen under the TEMPORARY provisions for the years 2014-2016.
As Mr. Demko tries to get us to cheer for the now curiously and ridiculously dubbed underdog victims of Obamacare, the insurance companies, he celebrates that insurers are hopeful they'll make even more money: “We do believe we're well-positioned for continued growth in the exchange marketplace if the market stabilizes to a more sustainable level,” Joseph Swedish, Anthem’s CEO.
Mr. Demko only tangentially acknowledges the absurdity of this insurance company victimhood by disclosing, "many plans also have a non-altruistic (and largely unspoken) motivation." Anyone making a surprised face here?
He notes that "Many plans are willing to take a hit in the individual market if they can keep securing much larger windfalls from other government programs." And there it is, insurance companies want the windfalls from Obamacare plans TOO, not because they're not making money because they're not making MORE money.
Mr. Demko then goes through his "fixes" to help the VICTIM insurance companies:
Get rid of the coverage of 26-years olds on their parents' plans: There is NO evidence this will fix the risk pool since young-healthies have enrolled in LESS coverage and sicker people get more coverage. If they're forced to purchase Obamacare exchange plans there is no reason to expect them to enroll differently than they have. Further, Obamacare likes the 26-year-old provision because it SAVES government money in premium assistance and cost-sharing because the government doesn't pay a dime for these enrollees.
Raise the penalties for non-insurance enrollment: Also based on the forcing of young-healthies to purchase health insurance, this would NOT improve the risk pool because it assumes that these young-healthies would buy into more expensive health insurance plans on the exchanges.
Charge more to older people: Remarkably Mr. Demko ignores the ageism in Obamacare--already permitting charging older people more than anyone else (except tobacco users) in premium and then using that higher number as the number to calculate what can be charged to the young healthies which is in a 3:1 ratio--old people can be charged three times as much as younger people.
If old people are charged more than the 1.5 times premium they're already charged under Obamacare then the amount of that increase that would be charged to young people whose premiums are dependent on what is charged to old people (3:1) would also go up. But these are Obamacare's rotten roots, the singling out of only the old, young and tobacco users for increased premiums protecting every other class of increased statistical cost including women of childbearing age, drug users, legal and illegal, alcoholics, obese individuals, and those with pre-existing conditions--these individuals cannot be charged a penny more in premiums.
Mr. Demko then proposes options of "less robust plans" (covering less than 60 percent of medical charges incurred) which will ONLY INCREASE the enrollment complaints of health insurers whose argument is that not enough young-healthies are enrolling in more expensive plans.
After ignoring the rotten roots of Obamacare and devising some fanciful plan based only loosely on the law, Demko returns to where he began, enrollment--apparently 20 million in his opinion, as the reason to keep Obamacare. Nonsense.
