The best way a handful of businesses in any given
industry can guarantee profits, marginalize competitors, and bailout their
mismanaged company is to become a government sponsored cartel. We’ve seen this “most favored” status
conferred upon select banks, auto makers, and various businesses that know how
to milk the government teat. Their names
need not be listed. We all know who they
are.
The health insurance industry has become the next “too
big to fail” government sponsored cartel and Obamacare is the vehicle for which
a handful of businesses will shelter themselves from a massive failure with the
expectation that taxpayers will bail them out.
The handwriting is on the wall. Performance is not meeting expectations. This means massive increases in
premiums. Big insurance knew this was
coming, as well as their enablers in Washington D.C.
The Washington Examiner reported the following:
This is an ominous sign for the future of Obamacare, because two
federal programs that were supposed to act as training wheels for insurers in
the early years of Obamacare by absorbing excess risk are set to expire after
2016. If insurers don't do a better job of attracting a healthier risk pool,
2017 promises to be a rocky year for insurance markets, regardless of which
party is in control of the White House.
In the first two years of the
implementation of Obamacare's insurance exchanges (2014 and 2015), insurers set
rates with the expectation that the government would absorb a certain degree of
risk and they made assumptions about the medical costs of their enrollees.
And here comes the rub:
In a scenario in which there are massive industry-wide losses
(and thus there isn't enough money being raised by the program to make it
self-sustaining), Republicans argued that the program would take on the
characteristics of an open-ended taxpayer bailout.
At first, the administration said the
program would be budget neutral – meaning it would only make payments to
insurers up to the amount that was collected from other insurers. But that led
to a furious backlash from insurers last spring, as
lobbyists and company executives warned of serious rate hikes for policies
starting in 2015 unless they were given added reassurance that the federal
money would continue to flow
Now that insurers
have had more time to look at the claims coming in from those enrolling from
Obamacare, they're finding that the pool of customers is older and sicker than
originally projected, driving up medical costs. Meanwhile, federal help isn't
what they anticipated.
Or, do they?
Does anyone truly believe Washington D.C. is going to let this
government program fail?
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