Oba­macare is un­af­ford­able and fail­ing

Maryland Independent - - Community Forum -

I don’t know about you, but since the Af­ford­able Care Act, or Oba­macare, took ef­fect, my health in­sur­ance costs have dou­bled.

An im­por­tant pro­vi­sion of Oba­macare was the risk cor­ri­dor. The idea of the risk cor­ri­dor was to com­pen­sate in­sur­ance com­pa­nies that end up with big­ger costs than they ex­pected. Un­der the law, they must sell poli­cies equally to ev­ery­one, re­gard­less of their med­i­cal his­tory.

Po­ten­tially, this meant some in­sur­ers might end up with an es­pe­cially un­healthy pool of cus­tomers. At the time, fed­eral of­fi­cials said they were count­ing on the risk cor­ri­dor pro­gram, which lasts through 2016, to fore­stall any ner­vous­ness among in­sur­ers about their ini­tial cus­tomer base and pre­vent them from rais­ing rates.

The risk cor­ri­dor pro­vi­sion of Oba­macare pro­vided that if an in­surer’s ac­tual claims in 2014 are at least 3 per­cent greater than the claims pro­jected when the in­surer set its 2014 rates, the gov­ern­ment must re­im­burse the in­surer for half of the ex­cess.

If ac­tual in­sur­ance claims jump 8 per­cent be­yond pro­jected claims, the gov­ern­ment cov­ers 80 per­cent of the ex­cess.

In a re­cent ar­ti­cle by Sean Wil­liams in The Mot­ley Fool, he notes that “in 2016, in­sur­ers that were los­ing money on Oba­macare’s ex­changes re­quested $2.87 bil­lion in fi­nan­cial as­sis­tance. Un­for­tu­nately, the Risk Cor­ri­dor doled out just $362 mil­lion, or 13 per­cent of what was re­quested.”

So, who is pick­ing up the dif­fer­ence? For the most part, it is the in­sur­ance com­pa­nies (at least tem­po­rar­ily), and some ac­tu­ally own and op­er­ate health care fa­cil­i­ties that will prob­a­bly share the loss.

The fail­ure of the gov­ern­ment to pro­tect in­sur­ance com­pa­nies from losses has re­sulted in many opt­ing out of the ex­changes. This ul­ti­mately re­duces com­pe­ti­tion and its pres­sure to keep rates low.

Ul­ti­mately, you, the in­sured, will pay up and all of us will re­ceive a lower level of health care. Cur­rently, the pro­jected in­crease in health in­sur­ance pre­mi­ums for 2017 is 18 per­cent. Ul­ti­mately, it will prob­a­bly be some­what lower for 2017 but there is no re­lief in sight for fu­ture years.

There is no “Santa Clause.” If you don’t pay di­rectly in pre­mium pay­ments, you will pay in taxes or re­duced care. Di­rectly or in­di­rectly, ev­ery­one will be ad­versely im­pacted by Oba­macare. Oh, and by the way, Oba­macare was a pro­gram to get ev­ery­one in­sured to at­tain a healthy pop­u­la­tion. Gallup’s most re­cent sur­vey pegged the unin­sured rate at 11 per­cent.

So, one in 10 are still not in­sured and these are mostly the healthy young peo­ple who were to pay in more than they cost and, thus, sup­port the un­healthy peo­ple — an­other failed at­tempt at wealth re­dis­tri­bu­tion.

With this out­stand­ing suc­cess at re­duc­ing health in­sur­ance costs and in­creas­ing en­roll­ments, I do not un­der­stand why any­one would want to change it.

Fred Mumma, Lusby

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