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Why ObamaCare = Increased Premiums

DoubtingDave
Posts: 380
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10/28/2013 1:38:18 PM
Posted: 3 years ago
It seems like every day I get stories about people whose insurance premiums are going up and are losing their coverage because of ObamaCare. Here is the real reason why ObamaCare cannot reduce premiums.

Imagine for a second that your 18-year-old neighbor drives a corvette, rarely obeys the speed limit, never stops at stop signs and has a penchant for texting and driving.
Now, imagine that neighbor #2 drives a minivan, never drives above the speed limit and respects all traffic laws.

Who do you think is going to cost the car insurance company more to insure? Obviously neighbor #1. Why am I writing this? Because this simple story explains the economics of why #Obamacare's real problem is not the website, but the faulty economics underlying it.

The reason nearly everyone is seeing their healthcare premiums increase under Obamacare is due to its use of what's called community rating and guaranteed issue. These two faulty tools mean that everyone in the community cannot be charged a premium equal to their risk but they must be charged what the government says is "fair".

To offset the costs of higher risk customers, everyone will be forced to pay more and given that the millions of "neighbor #2's" they needed to enroll in order to subsidize the "neighbor #1's" have refused to enroll, expect your costs to skyrocket even higher next year.

The irony here is that if we had just passed legislation giving lower-income individuals income-based support to buy a private plan themselves rather than bankrupting hundreds of thousands of Americans and forcing them off their current healthcare plans, because of the mounds of faulty regulations, based on broken economics, a healthcare solution would be sitting in front of us. And, to add insult to injury, this was done to empower DC bureaucrats and to eviscerate the private healthcare insurance industry.

If there was ever a time for change, it is now.
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drhead
Posts: 1,475
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10/28/2013 2:33:55 PM
Posted: 3 years ago
At 10/28/2013 1:38:18 PM, DoubtingDave wrote:
It seems like every day I get stories about people whose insurance premiums are going up and are losing their coverage because of ObamaCare. Here is the real reason why ObamaCare cannot reduce premiums.

Imagine for a second that your 18-year-old neighbor drives a corvette, rarely obeys the speed limit, never stops at stop signs and has a penchant for texting and driving.
Now, imagine that neighbor #2 drives a minivan, never drives above the speed limit and respects all traffic laws.

Who do you think is going to cost the car insurance company more to insure? Obviously neighbor #1. Why am I writing this? Because this simple story explains the economics of why #Obamacare's real problem is not the website, but the faulty economics underlying it.

The reason nearly everyone is seeing their healthcare premiums increase under Obamacare is due to its use of what's called community rating and guaranteed issue. These two faulty tools mean that everyone in the community cannot be charged a premium equal to their risk but they must be charged what the government says is "fair".

To offset the costs of higher risk customers, everyone will be forced to pay more and given that the millions of "neighbor #2's" they needed to enroll in order to subsidize the "neighbor #1's" have refused to enroll, expect your costs to skyrocket even higher next year.

The irony here is that if we had just passed legislation giving lower-income individuals income-based support to buy a private plan themselves rather than bankrupting hundreds of thousands of Americans and forcing them off their current healthcare plans, because of the mounds of faulty regulations, based on broken economics, a healthcare solution would be sitting in front of us. And, to add insult to injury, this was done to empower DC bureaucrats and to eviscerate the private healthcare insurance industry.

If there was ever a time for change, it is now.

You do realize that even if your premiums go up, you will still benefit from having access to preventative care at no out-of-pocket expense, right? Any increase in premiums likely has this as one of its causes, so it isn't quite fair to assign the blame to only one thing. Any increase in premiums related to covering preventative care would go back to you and would, in all likelihood, save the insurer money since their patients wouldn't be as hesitant to see a doctor about any symptoms they have, therefore they wouldn't wait until an otherwise simple condition becomes almost life-threatening to do something about it.

Also, your example is a bit flawed, since people don't have the same control over pre-existing conditions that they have over their driving habits. Even so, patients in this case would have access to preventative care (which they would be expected to use) to ensure that their condition does not become a problem, and that if it does, it is recognized and taken care of quickly.
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CarefulNow
Posts: 780
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10/31/2013 2:06:11 PM
Posted: 3 years ago
At 10/28/2013 1:38:18 PM, DoubtingDave wrote:
The irony here is that if we had just passed legislation giving lower-income individuals income-based support to buy a private plan themselves rather than bankrupting hundreds of thousands of Americans and forcing them off their current healthcare plans, because of the mounds of faulty regulations, based on broken economics, a healthcare solution would be sitting in front of us.

Perhaps, but a greater irony is that a Tea Partier is advocating a handout. And while I'm certainly sympathetic to a basic income as an alternative to non-discriminatory insurance, doesn't your "income-based support" suffer from the same if not more of the problem you accuse non-discriminatory insurance of? In other words, isn't income just as controllable as pre-existing conditions? By the way, where were you with these constructive criticisms during the debates? I seem to remember a lot of fear-mongering, representations of Obama as an African witchdoctor (as if socialized medicine hasn't been successful for decades in the whitest countries on Earth), and the like, but nothing pertaining to the un- and underinsured.