There is no fix–

There is no fix—23eh.,b13.14

With Aetna’s announcement that it is pulling out “ii of most government-run exchanges, Obamacare’s death spiral has begun to accelerate.

Affordable Care Act’s high-priced, high-deductible, narrow-network plans. Insurers are responding to sicker risk pools and bigger losses by raising rates, which makes the plans even less attractive to the young and healthy—which makes the risk pools sicker, which makes the rates rise further. And the spiral continues, like water circling the drain.

Paul Krugam admits this is “genuine bad news” that shows “some real problems are cropping up.” Supporter Charles Gaba calculates that the average requested premium hike in 2017 for Obamacare plans is 24 percent. McKinsey & Company in an analysis done for the York Times, found that  1 in 50 Americans didn’t have a choice of insurers under Obamacare last year and thereby faced a private monopoly; next year, McKinsey says, it will be 1 in 6. Pinal, County, Arizona, is poised to have no Obamacare plan at all.

Following similar decisions by UnitedHealth Group and Humana—Aetna emphasized that insurance can’t be affordable without “a balanced risk pool,” and made clear that too many people are gaming the system and buying “insurance” only when they need immediate care: ”                 55 percent of our individual on-exchange membership is new in 2016,” Aetna reports, and “in the second quarter of 20161 we saw individuals in need of high-cost care represent an even larger share of our on-exchange population.” In other words. the risk pool isn’t just bad; it’s getting worse i

Last year, Seth Chandler who teaches insurance law at the University of Houston, wrote    that data released by the Department of Health and Human Services showed “the beginnings of an adverse selection death spiral that threatens the stability of the system of insurance created by the Affordable Care Act.” Chandler added, “Private health insurance is fragile. It generally does not well withstand the sort of underwriting regulation imposed by” Obamacare.

Indeed, it doesn’t. And that’s why Obamacare is unfixable: The coercive mandates on which it relies are incompatible with a vibrant—or even solvent—private insurance market.

They mandated that insurers cover all comers, no matter how sick or injured, pretty much at any time, at the same price as those who had been buying insurance all along. And they banned insurance that didn’t cover things they thought it should cover, like pediatric dental care for people without children. The combination caused prices to skyrocket.

It required that taxpayers fund huge subsidies so that a chosen subset of the population— the near-poor and near-elderly—could get heavily discounted, or even “free,” plans. And it instituted  an insurer bailout, putting taxpayers on the hook for a large portion of insurers’ potential losses. This combination of mandates and redistribution was supposed to hold down the rising premiums spawned by Obamacare’s  redefining of “insurance.”

The individual mandate, the fine for which is supposed to be at least $695 this year for a single person 35; and more than $2,000 for a married couple with two kids, has proven relatively easy to escape. Thanks to a long list of loopholes and lax enforcement by the Obama administration, the Congressional Budget Office estimates that only $3 billion in individual-mandate fines will be collected this year out of 27 million uninsured people—an average of just $111.00 per person.

The only way to “fix” Obamacare would be to double down on these same unpopular approaches—by dramatically beefing up enforcement of the individual mandate to get a lot more young and healthy people into the insurance pool and ramping up Obamacare’s various taxpayer funded subsidies to insurance companies.

Increasing subsidies for those who already get them—which Republicans won’t do— wouldn’t do a thing for those who don’t qualify for them. And Republicans aren’t about to reinstitute the unpopular insurer bailout. So the Democrats’ only real hope for “fixing” Obamacare—that is, for making it even more coercive and fiscally reckless—is to regain control of the House and Senate, both of which they lost because of Obamacare.

Already, Hillary Clinton has called for adding a “public option”—a government-run, government-subsidized insurance plan—to Obamacare. And she has called for making  55 the new age of eligibility for Medicare, a program that is already driving us towards bankruptcy.

Those who buy insurance on their own shouldn’t be denied a tax break like the one received by those who get insurance through their jobs. A good alternative would offer simple, non-income-tested, refundable tax credits of something like $1,200 for those under the age of 35, $2,100 for those between 35 and 50, and $3,000 for those 50 and over, plus $900 per child. These would be legitimate tax credits, not direct subsidies to insurance companies masquerading as tax cuts. People could use them for the insurance they want and put anything left over in a health insurance savings accounts.

source-weekly std, jeffrey anderson, nyt, paul krugman, charles gaba, mckinsey and co., seth chandler, cbo, neera tanden, center for progress

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