Saturday, October 24, 2015

When Forecasts Fail to Match Reality

Recall that Obamacare was sold on the premise that 40 million or so Americans couldn't get health insurance either because of their health or the price. So great was that problem that the government mandated the uninsured to get insurance or face financial penalties. Subsidies for the insurance are also available. So what has happened?

Well, despite the threats and cash, those people "denied" access to health insurance aren't in the system:

Despite subsidies to help with premiums and out-of-pocket costs, most of the uninsured who are eligible for ObamaCare are saying “no thanks.” Only one in seven is expected to sign up. That’s despite a hefty increase in the financial penalty next year for not having insurance. ...

Health and Human Services Secretary Sylvia Burwell predicts ObamaCare enrollment will inch up by 1 million or so, to 10 million people — half what the CBO forecasted.

I never understood why we needed to compel--by the weight of government power--people to buy health insurance if those people desperately wanted--but were denied by evil forces--health insurance.

Today, not enough healthy people have enrolled to make the system sustainable--without hefty taxpayer subsidies. So the system is in a "death spiral" of increased premiums that reduce the incentive of healthy people to sign up. Which forces premiums up.

The article doesn't mention it, but a good chunk of the people counted in Obamacare were put into the existing Medicaid system.

Perhaps nearly all, actually.

Although I suspect that's not really the case if you bore down into the stats. Some in Obamacare are new and didn't have access to health insurance. Some lost existing insurance because of Obamacare regulations and went through Obamacare to replace their insurance. But a lot are actually diverted to Medicaid, which they already qualified for without the existence of Obamacare.

So to deal with a much smaller real problem of sick people who can't afford insurance, we established a massively expensive and complicated quasi-governmental health insurance system (really, there are commercials that boast of a company's ability to navigate the "complicated health care system" by highlighting that even odd types of health problems have their own unique code to record them!).

So clearly our government will increase the pain and increase the subsidies. More cowbell!