Why Rates On Obamacare Are Skyrocketing


The news recently is awash with the alarming rate increases for Obamacare. People seemed surprised. They shouldn't be.

It was structured by those with no managerial experience. This, alone, was sufficient to forecast that the ACA would fail.

But, why the increases now? First, many insurance corporations have dropped out of the "exchanges" due to the fact that the "exchanges" were a loss-leader, profit wise. Fewer companies = less competition and less ability to spread the costs. But, there is more than just that.

It is common sense to believe that rates would increase and profits would disappear. Here is a high-level, simplistic look at the rationale.

Obamacare offered that people with pre-existing conditions had to be covered by insurance companies/exchanges. So, why pay premiums if I can just get insurance only when and if I need it? Yes, there is a penalty for those not having coverage. But, the "fines", if you will, are far, far less than the premiums.

The entire structure of Obamacare depended on young, healthy people signing up by the millions. The premiums from the "young" would cover the expenses of the more elderly - who, historically, have greater health issues. But, the "young" did NOT sign up (and are not signing up) as expected. Remember, the "fines" for failing to "sign up" are less than the premiums.

Next, the rates advertised were intentionally low to begin with - it was the only way to "sell" the ACA. The CBO projected these rate increases - BUT, not at the levels that are occurring.

The greatest number of people affected by these rate increases are those getting "subsidies". This means that you and I, the taxpayers, are paying their premiums, or a goodly portion thereof. So, it affects us only indirectly and affects them only slightly. What they do is to shop around for plans that have better rates/subsidies. The problem, of course, is that with the insurance companies no longer willing to "play", their choices are getting very limited.

People who get their health insurance through their companies will not suffer too badly from these premium increases - the employer picks up most of it. However, the deductibles are also skyrocketing.

So, even when truly affordable "rates" are available, the actual "out-of-pocket" expenses for people are problematic.

Please recognize that Obamacare is naught but a "ponzi" scheme. And, I do NOT mean this in an insulting way. If one thinks about it, all insurance operates as "ponzi" schemes. The insurance companies are betting that the vast majority of their customers never file a claim. It's pretty much that simple.

Factor this into a situation where those requiring payments are the only ones left in the insurance pools. Who is left to pay for all this? The people who need the coverage the most.

How would all this be described? A DISASTER!

WARNING: Whenever a politician offers to solve a 10% problem with a 100% solution, RUN! (Originally, Obamacare was to address the fact that 30 million out of a population of 300 million did not have health insurance.)

AND, it wasn't as if a majority of the 30 million uncovered persons could not afford coverage; they chose not to be covered. Why? The reasons vaired from the young believing "It won't happen to me." kind of thing to people willingly taking the risk. Now, even for those for whom we are partly paying the premiums, they can't afford the deductables. So, where does that leave them today?