Is Obamacare a spectacular failure because of incompetence, or by design?

Private insurer participation in Obamacare exchanges, 2015-2016
Private insurer participation in Obamacare exchanges, 2015-2016

First, let’s establish that Obamacare really is a failed policy.

One of my favorite health policy experts Sally C. Pipes reports for CNBC (H/T Bree) on how private insurers are reversing their decision to sell customers Obamacare policies.


Aetna the nation’s fourth-largest health insurer, just decided to stop offering plans on Obamacare’s exchanges in all but four states in 2017. The firm says that it was losing roughly $300 million per year on these policies. And it projected that its losses would only increase, since the share of covered individuals “in need of high-cost care” was growing, according to CEO Mark Bertolini.

Aetna isn’t the only insurer giving up on Obamacare. UnitedHealth, America’s biggest insurer, will sell plans in just three states next year, down from 34 this year. Humana will offer coverage in just 156 counties in 2017, 88 percent fewer than this year.

In other words, the insurance “death spiral” has arrived. Obamacare’s critics have long predicted that exchange plans’ high premiums and deductibles would keep all but the sickest Americans from enrolling. These people would need so much medical care that insurers would lose money no matter how much they raised premiums. Eventually, insurers would have no choice but to pull out.

[…]Insurers that haven’t pulled out of Obamacare are requesting premium hikes averaging 24 percent next year. And some states have it far worse. Many Georgians could see a hike of 65 percent. The 600,000 Texans enrolled in Blue Cross Blue Shield may face a 59 percent premium increase.

I must have blogged about 50 posts on Obamacare, and why it would fail, before the 2012 election. I even had podcasts and articles by Sally C. Pipes! She predicted all of this long ago. The 2012 election was our last chance to stop it, and we failed.

Obamacare premium growth, 2015-2016
Obamacare premium growth, 2015-2016

I always like to think about the future so I can prepare for it. Investors Business Daily thinks that if Hillary is elected, she will use this crisis to push for single payer health care. Single payer basically means that you pay into the government based on what you earn, and the sickest / least responsible people get a deal because they get “free” care. It’s a terrible deal for healthy, fit single men who never use health care. We have to pay about $10,000 a year in taxes, and never use it.

Investors Business Daily explains:

So what’s Hillary Clinton’s answer to the failing private exchanges? Get more people on government insurance through what she calls the “public option.” This would be a government-run health care plan offered in ObamaCare exchanges across the country.

“The public option, Clinton says, “will strengthen competition and reduce costs.”

But wait a minute. The “public option” was pushed by liberal Democrats in 2009 when ObamaCare was being built, and it was rejected by centrists in the party because it looked too much like a steppingstone to single payer.

As a matter of fact, that was the idea behind the “public option” in the first place.

As Mark Schmitt explained in the liberal American Prospect, “The public option was part of a carefully thought out and deliberately funded effort (to convince the single-payer crowd) they could live with the public option as a kind of stealth single-payer.” The idea was that the public option would be able to undercut private plans, driving them all out of the exchanges.

But all those centrists Democrats who opposed the public option are gone from the Senate, and if Hillary Clinton gets elected with a more liberal Senate majority, the public option will likely be top of her agenda.

With the vast Medicaid expansion, and the public option (as well as Clinton’s proposal to expand Medicare), it’s not far-fetched to say that soon the only people covered by private insurance will be the diminishing number who get it through work. (ObamaCare was also designed to shrink employer-based health.)

I guess my solution to this is to hang on to my employer-subsidized plan for as long as I can, and then if single-payer becomes the law, then I’ll just ease back my working. Maybe work part-time in a less demanding job. I don’t want to get up and go to work to pay for strangers, especially if their “health care” is just abortions, in vitro fertilization, drug addiction therapy, breast enlargements and sex changes – which is what happens in countries where the government does run health care. They just use it as a way to buy votes.

One thought on “Is Obamacare a spectacular failure because of incompetence, or by design?”

  1. In answer to your headlines: yes

    It was certainly designed to lead us to single payer, but they were planning to gradually subsume the insurance industry into the bureaucratic/regulatory complex. Thankfully for us, they had too much faith in bureaucrat competence. Now they hope that people won’t notice how badly they screwed it up and give them another crack at it. Unfortunately, I’m not certain that the public has been sufficiently put off by their bumbling to stop trusting government.

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