In the midst of huge foreign policy concerns, societal breakdown on multiple dimensions, its easy to forget about our top concern a couple of years ago: the government takeover of our health care system. We predicted disaster, and Obamacare has never been popular with the American people. It came at great cost to the Democratic party, and despite the Supreme Court’s amazing rulings keeping it on life support, it seems destined to collapse from its own contradictions.
The plan was always specious in its promise: the central premise is we can force healthy young people into the system to subsidize older and sicker enrollees. Yet the penalties were delayed and phased in, such that they are small in comparison to actually buying insurance. So why should young people (who paradoxically supported Mr. Obama against their own interests) buy Obamacare policies, especially now that they could always sign up in the future if they got really sick? The answer? They don’t.
By the end of 2016, an estimated 10 million will have been enrolled in health coverage in plans sold on government-run insurance exchanges, said Health and Human Services Secretary Sylvia Burwell, who based that goal on an analysis by her department.
That’s only about 10 percent more than the 9.1 million people that HHS expects will be enrolled in the plans by the end of this year, despite the fact that the tax penalty for failing to have health coverage is set to rise significantly in 2016.
The figure is also 11 million people lower than the 21 million customers that the CBO had predicted for 2016 enrollment on the exchanges as recently as last January. CBO has estimated that 12 million people will be enrolled this year, well above the actual figure.
And that’s where today’s headlines and video come in. UnitedHealth is our nation’s largest health insurer, and they say if things don’t change, they will be existing the Obamacare exchanges.
UnitedHealth chopped its 2015 earnings forecast and the nation’s largest health insurer has begun to question its future in public insurance exchanges, a key component in the nation’s health care overhaul.
The company said Thursday that it would pull back on the marketing of its exchange business a few weeks after open enrollment for that coverage began nationwide. It also said that it will decide in the first half of next year “to what extent it can continue to serve the public exchange markets in 2017.”
“We cannot sustain these losses,” CEO Stephen Hemsley said Thursday. “We can’t really subsidize a marketplace that doesn’t appear at the moment to be sustaining itself.”
Obamacare will not survive Mr. Obama. These issues were utterly predictable, not because we are that prescient, but that economics is very simple in this respect: people respond to incentives. And you should never expect people to voluntarily subsidize others. Force them the government can do. But if the force is only through a fine, and the fine isn’t large enough, they won’t come. And this couldn’t happen to a nicer bad government program.
Bert Wheeler
Jeff Haymond
Marc Clauson
Mark Caleb Smith
Tom Mach