The Death Spiral of the American Health Insurance System

By |2019-04-13T20:54:57+00:00April 21st, 2016|Insurance|

Recently, updates on the actual cost of the Affordable Care Act has disclosed severe issues that could cost the American taxpayer billions.

The report has gone on to include that actual cost in both Medicare expense and user expenses unexpectedly have increased.  What went wrong?

We had predicted that insurance rates would rise based on personal experiences with our own medical reimbursement from Medicare providers.

See link to the article:  Why Obamacare will Destroy the Baby Boomers.

http://www.retirevillage.com/images/How-Obamcare-will-destroy-the-baby-boomer-generation.pdf

The program is just not sustainable without a severe Medicare financial support system supplied by the American taxpayer.  It has been estimated that over 18,000,000 people have benefited from this program, at the same time, those providing insurance protection are suffering enormous losses.

What is the answer?  I truly don’t know but if the system continues, one of three things will happen:

  1. Premiums will escalate high enough that those with the protection will drop the policy and be back to state aid for health protection
  2. The American taxpayer will subsidize the insurance company’s losses which will be in the billions of dollars.
  3. The medical professionals who provide the services will cease.

 

The Hill, a news service that follows both current and ongoing news examines the current effect ObamaCare is having on those providing the services.

Here is the entire article: http://thehill.com/policy/healthcare/276366-insurers-warn-losses-from-obamacare-are-unsustainable

United Health Care estimated on 4-19, their estimated losses could reach $680 million this year due to morbidity experience because of the lack of younger people joining the group.

All across the health insurance spectrum, health insurance companies are amplifying their warnings about the financial sustainability of the ObamaCare marketplaces as they seek approval for premium increases next year.

Insurers say they are losing money on their ObamaCare plans at a rapid rate, and some have begun to talk about dropping out of the marketplaces altogether.

While analysts expect the market to stabilize once premiums rise and more young, healthy people sign up, some observers have not ruled out the possibility of a collapse of the market, known in insurance parlance as a “death spiral.”

Insurers have been pounding the drum about problems with ObamaCare pricing.

The Blue Cross Blue Shield Association released a widely publicized report last month that said new enrollees under ObamaCare had 22% higher medical costs than people who received coverage from employers.

What does the future hold for the Affordable Care Act?  Obviously, Congress is going to have to step forward and inject money into the problem, in not doing so, millions will be faced with unaffordable premium increases.

It is important to fully understand what the future holds for Affordable Care Act members. One thing is for sure, the current scenario will not be what the future holds, change in inevitable. Most experts agree the plan will change and the actual cost will be passed to the end user, or the taxpayer.

Either way, the failure of the Affordable Care Act is a reality.

About the Author:

Bill Broich
Bill Broich is a well-known annuity expert with over 30 years of experience. He has written hundreds of articles on annuities and other financial topics, and has been a featured commentator on TV, Radio and the Internet. To follow Bill's profile, click here.