Wednesday, July 19, 2017

Obamacare: Let the Situation Ripen

Yesterday I made the following statement about Obamacare: "government spending is rising much faster than originally projected while revenues are falling short."

These days one should not just throw out a statement like that without a link or two. Here is Investor's Business Daily, on the signs of collapse:
  • The Centers for Medicare and Medicaid Services reports that the number of insurers applying to participate in ObamaCare exchanges next year plunged by 38% compared with last year, and is half what it was in 2016.
  • CMS also reported that 40 counties in Indiana, Ohio and Nevada are at risk of having zero insurance companies in their ObamaCare exchanges next year. The Kaiser Family Foundation put the number of at-risk counties at 38.
  • In addition, CMS reported that 2.4 million enrollees in 40% of the nation's counties will have just one insurance company in their area.
  • The average increase in premiums next year for a Silver plan in eight states will be 18%, according to Avalere. One of the last ObamaCare insurers in Iowa has put in for a 43.5% hike. In Washington state, the average boost is 22%. In Tennessee, the proposed rate hikes range from 21% to 42%. And so on.
  • As we noted before in this space, these insurance defections and gargantuan rate hikes have nothing to do with the Republican's repeal effort, but with the continued deterioration of the ObamaCare markets.
  • States are also starting to struggle with the costs of ObamaCare's "free" Medicaid expansion. A report from the National Association of State Budget Offices said that the expansion will cost states nearly $9 billion next year, more than twice what it cost in 2016.
  • CMS reports that the per capita costs of the Medicaid expansion are 50% higher than expected.
  • Arkansas scaled back its Medicaid expansion in May, and Ohio lawmakers voted in June to freeze the expansion in that state. Oregon's Medicaid expansion contributed a $1.6 billion gap in the state's budget. In California, the Medicaid expansion will cost the state $1.3 billion this year, putting additional strain on the state's budget.
  • Today President Trump repeated his call to the Senate to continue working on a health care bill. It's my belief---hold on to your hats---that he thinks it's the right thing to do despite the fact (not a probability) that he and the Republicans will be vilified no matter what they come up with. As a person with life experience, he knows that trying to help people who don't wish to be helped not only is unappreciated but resented.

    He should just call off his effort, declare Obamacare to be the law of the land until the people overwhelmingly want something different, agree to provide funding according to the 2009 CBO projections, and let the Obamacare advocates tell us how to fix it as long as they stay within the budgetary guidelines (plus 10% because he's a reasonable guy). Let the situation ripen, as the saying goes.

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