If J. D. LeDell’s prediction at The Moderate Voice is correct, the incoming Congress may not need to repeal the Affordable Care Act. It may have become inoperative long before then:
In the meantime, if Republicans vote to repeal Obamacare(either right away or at some future effective date) without a replacement ready to implement, Obamacare as we know it will cease to exist no later than January 1, 2017 as every insurance carrier will flee the market.
I think he may mean January 1, 2018 but either way is not particularly good news for the program. Mr. LeDell’s expressed preference is for the federal government to underwrite the entire healthcare insurance market, in full or part.
His diagnosis of the problem, essentially, is that the constraints of the ACA make it impossible for private insurers to make a profit:
What should be done to cure Obamacare’s ills? Quite simply make rates reflect expected health care costs by age. Obamacare mandates that the difference in rates between a 63 year old can be no more than 3 times the rate for a young healthy 20 year old. In actuality, the 63 year old rates should be 10 times that rate for the 20 year old. In fact one of Obamacare’s biggest problems is that a 20 year old can find costs in the regular individual market that are half of Obamacare’s rates while the 63 year old will never ever find a rate as good as he can under Obamacare. Unfortunately, the designers of Obamacare took too much of what makes borrowed community rating practices from HMO’s and modified them without understanding the fundamental differences of the two. You can be sure that the 13 million people covered by non-Obamacare individual health policies are young and healthy since their rates are lower than Obamacare.
which is another way of saying that the ACA requires that healthcare insurance not be insurance. For a plan to be insurance premiums must be proportional to risk.
Once you’ve rejected the idea of healthcare insurance as insurance, keeping the system financially viable is a real challenge. Whether underwritten by the federal government or not, the system must be financially viable. Either we must be prepared to write providers a blank check, costs must be reduced, or rationing imposed. There really is no other alternative.
I hadn’t seen the number of people on non-qualifying policies before, but it’s been in the background in the reporting of insurance companies pulling out of the ACA, but promising to stay in the non-qualifying market.
One of my relatives bemoans that his sons are now working in the cash-economy, without healthcare coverage and without tax reporting. He had them on the family policy until 25 and has tried to talk them into finding a real job, but cash for construction work and timeoff to play video games has its appeal. I said something like, so your sons are now doing the jobs they can’t find illegal immigrants to do? “Pretty much.”