I am losing count of the articles I see published about Obamacare and rate increases with apologetic statements from people in the ObamaCare inner-sanctum telling us not to worry. I have written before about the withdrawals by various insurers from states where they have already ‘lost their shirt’ in the ObamaCare marketplaces. This is eerily similar to Alfred E. Neumann of Mad Magazine fame saying to us “What? Me Worry?”.
A Bloomberg News article this morning by Zachary Tracer is yet another indication of ‘whistling in the graveyard’, in my less-than-humble opinion. Kathryn Martin, Health and Human Services’ acting assistant secretary for planning and evaluation (how about that for a title that must wrap around to the backside of her business card?) says “Headline rate increases do not reflect what consumers actually pay. Even in a scenario where all plans saw double-digit rate increases, the vast majority of consumers would continue to have affordable options”.
Ms. Martin conflates affordable options with U.S. subsidies of premiums by use of more taxpayer dollars and with those who have coverage needing to reduce their coverage by dropping to a less-costly version of ObamaCare with lower rates of coverage, potentially fewer physicians, shallower drug offerings, etc., etc. She, by the way, enjoys the comfy Federal plan so ‘not to worry’.
These are the earmarks of the dreaded “death spiral” in insurance-speak where it simply becomes impossible to increase premiums rapidly enough to offset the increase in claims costs, eventually forcing the plan sponsor to withdraw the plan from the marketplace. For-profit insurers react more quickly than does government when these signs are exhibited. We have already witnessed this in the world of Obamacare where insurers have left the mix.
This is not a new phenomenon in the world of health insurance. Just because this is a government-run package of programs doesn’t mean that reality can be suspended. Even Uncle Sam, using our money, will run out of funds, service cuts, etc. to stave off this impending failure. President Obama has been quite proud that we’ve re-named these programs after him. Reality has been successfully suspended for a few years by using the tricks that have been employed by insurers who find themselves in a bad place in the health insurance world. In the end, these types of charades end in flames, and that will be especially problematic for government-run plans since politicians will have had their hands all over the corpse making an effective autopsy finding a virtual impossibility.
Some politicians will be issuing “I told you so” press releases. Other politicians will be issuing fabricated denials of culpability for the mess blaming the ‘other party’. Former President Obama will be someplace playing golf with nary a care in the world. Real people will be suffering. And, unfortunately, gullible voters will be placing blame on the other political party just as they always do, even though there will be facts available with which reasoned judgements and proper assignment of blame could be accomplished.
I still remember the 2AM (or thereabouts) vote where Democrats rammed this plan through and how they posed proudly for holy pictures at the end of this process. Most had no real working knowledge of the plan nor of this whole world of health care and insurance. That worked out well, don’t you think? Wonder if we’ll see those pictures ever again at the rate this mess is unfolding?