It is increasingly clear that President Barack Obama’s reform of American healthcare (sorry, even the president admitted he was reforming health insurance not care) is nothing less than the elimination of all private health insurance. At that point we will have de facto single payer healthcare: the American healthcare system under total control by Washington, D.C.
While we know that Bernie Sanders would be cheering, the American people won’t be happy at all, not with what we get (or don’t get.)
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In recent news, UnitedHealthCare Insurance, the largest insurer of Medicare enrollees, announced that the losses previously projected at $425 million for selling Obamacare insurance underestimated their true losses, which will exceed $500 million. Not even UnitedHealth can sustain such losses for very long.
Meanwhile, Humana Inc. announced on January 8 that it would set aside a “premium deficiency reserve” for its 2016 Obamacare business. This is insurance-speak for when expenses are greater than revenue. Just like UnitedHealth, Humana and others are losing money when selling Obamacare insurance.
Aetna and Anthem have already left the market and stopped selling Obamacare insurance.
Private insurance companies are beginning to do what hospitals have been doing for years to stay in business: revenue shifting. They take money from profitable customers to cover losses mandated by the government. For insurance, that means charging higher and higher prices for private coverage.
As the premium prices go up, fewer and fewer people will buy private insurance, meaning less profit to cover required losses. This will force insurance to raise prices further. Eventually no one will buy private insurance because no can afford it. Voilà! Private insurance is being murdered (“eliminated”) by government fiat.
By Obamacare law, upheld by the Supreme Court, citizens* are required to purchase health insurance. When private insurance leaves the market, the last man standing will be the government. Then the only option available to Americans will be the “public” one.
(*Despite the draconian effects on the vast majority of individuals, nothing will change for the 12-15 million undocumented Americans. They will still be prohibited from government supported insurance yet still can get “free” care through Emergency Rooms as required by the Emergency Medical Transport and Active Labor Act of 1986. How hospitals will cover these very large government mandated losses is unclear.)
When government insurance is the only insurance available, the government will solely determine benefits. There will be no market competition. Government will also dictate what medical care you get and what care will be denied. Remember the Independent Payment Advisory Board? That is the federal agency that rations your medical care.
Let’s review the bidding, as they say in bridge. Washington will then control the entire market in healthcare, both supply and demand. Government decides your care; not you, not your doctor, not even your insurance company. Government determines how much you pay by dictating insurance prices and through a host of hidden taxes. Government takes money from providers to pay bureaucrats, so there will be no doctors.
And we all will die while standing in line waiting for our government approved health care, just like our American veterans.
Until recently, the death of commercial insurance was merely a prediction by vigorous opponents of the president’s reform law. Now, the evidence is starting to confirm this unfortunate reality.
Dr. Deane Waldman MD MBA is author of just released “The Cancer in the American Healthcare System;” Host of www.wecanfixhealthcare.info; Professor Emeritus of Pediatrics, Pathology and Decision Science; and Adjunct Scholar (Healthcare) for the Rio Grande Foundation, a public policy think tank. Dr. Deane sits on the Board of Directors of the New Mexico Health Insurance Exchange as Consumer Advocate. Opinions expressed here are solely his and do not necessarily reflect the opinions of the Board.
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