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LA Times: Ignore insurance death spiral, Trump is fearmongering

Conservative Review

The mainstream media continue to live in a fantasy world of its own making, where Obamacare works great and the evil Republicans, led by President Trump, are trying to take people’s health insurance away.

A Friday headline from Brian Bennett, reporting for the Los Angeles Times, reads “'Death spiral!': Trump is stoking fear that the Obamacare markets will collapse if Congress doesn't act.”

“Stoking fear,” eh? Last week, the president tweeted about Aetna’s exit of the Obamacare insurance markets, exclaiming “Death Spiral!”

“Many health care experts and industry officials believe the marketplaces need to be tweaked, and the withdrawal of insurers has left consumers in some parts of the country with few options,” Bennett reported, before denying that the “death spiral” exists.

“That said, health care experts have not seen signs of a so-called ‘death spiral’ for the exchanges, and have seen enrollment on the marketplaces remain relatively steady, even with recent premium hikes.”

So, according to the L.A. Times, Trump is fearmongering. But the truth is, the president has repeatedly claimed, correctly, that Obamacare is imploding; premiums continue to increase and individuals are unwilling to pay the higher prices, driving insurers out of the marketplace.

When United Health Care announced last year it would withdraw from the Obamacare exchanges, Conservative Review contributor Logan Albright explained how Obamacare has created the insurance death spiral Trump is talking about.

The death spiral works like this: When the pool of people who sign up for health insurance is older and sicker than insurance companies expect, costs end up being higher than projected. Companies have to raise their prices (premiums) in order to make a profit. Higher prices cause some people to drop their plans as being too expensive, and the people most likely to do this are the ones who need insurance the least. This makes the remaining pool still more costly than before, and the cycle begins again, until nobody can afford insurance anymore.

While Bennet writes that “health care experts have not seen signs” of the death spiral, in Maryland:

This Washington Post article by Carolyn Y. Johnson, published the same day as Bennet’s piece in the Times, quotes health care expert Chet Burrell, chief executive of CareFirst Blue Cross Blue Shield, stating that the Obamacare marketplaces “were in the early stages of a death spiral.”

“The head of the largest insurer in the Mid-Atlantic region warned Thursday that the Affordable Care Act marketplaces were in the early stages of a death spiral, a statement that came as the company announced its request for massive, double-digit premium increases for next year.” (Emphasis added)

CareFirst, which The Washington Post reports insures about 215,000 people thorough the Obamacare exchanges, has lost $600 million since entering the marketplaces four years ago. They are asking Obamacare regulators to approve a more than 50 percent premium rate hike in Maryland to cover their costs.

“What we’re seeing is greater sickness levels. The pool of beneficiaries is becoming sicker, in part because healthier people are not coming in at the same level we hoped,” said Burrell.

The explanation is straight from the definition of a death spiral. Obamacare’s insurance mandates and “consumer protection” regulations have driven up the cost of insurance plans, pricing healthy people out of the market. Without those people paying in to subsidize the sick, insurance costs must increase to make up the difference. The resulting higher premiums and deductibles price more people out of the market, and the cycle repeats ad nauseam.

“We were hoping for more stability. The factors that I have described to you today lead to instability and to a spiral, and we think we are in the beginning of that,” Burrell explained to the Post.

Obamacare is collapsing. Insurers in the health exchanges are indeed in a death spiral, and the president is telling the truth. The Los Angeles Times is being dishonest with the American people about the failure of Obamacare by accusing President Trump of “stoking fear.”

Campaigning against Obamacare’s visible failures has been a winnings strategy for Republicans in every election since the bill’s passage. Unfortunately, the Republican American Health Care Act, as passed by the House of Representatives, does not solve the problem.

“As a Marylander who know pays three times more for premiums in order to get less coverage and be subject to a $13,100 deductible, I can say this is an issue that fully resonates with residents of the state,” Conservative Review Senior Editor Daniel Horowitz said. “The problem is that Trump continues to promote a bill that accepts that premise of Obamacare that is causing these rising premiums.”

That premise is the continued demand for protective regulations for individuals with pre-existing conditions, community rating, and the insurance mandates from the federal government that micromanage what coverage insurance companies are permitted to offer to consumers. Those elements of Obamacare are preserved in the GOP reform bill, not repealed whole cloth as was promised.

“It takes talent, at a time when Obamacare is making families pay another mortgage, for Republicans to take the focus off the ills of Obamacare and transfer it to the ACHA,” Horowitz said.

“Yet, this is what happens when they focus on half-baked replace instead of repeal.”

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