Obamacare: Obama lied and People will Die

Posted by PITHOCRATES - December 14th, 2013

Week in Review

There are about 414 million people in the United States.  And Obamacare is supposed to insure them all.  But that’s not all.  The Affordable Care Act was going to make health insurance less costly while covering more people.  As well as providing more extensive coverage.  Obamacare promised more for less.  And if you liked your health insurance, your doctor and your medication you could keep them.  It just sounded too good to be true.  And, as it turned out, it was too good to be true (see Does the pre-existing condition program foretell broader problems for Obamacare? by PHILIP KLEIN posted 12/13/2013 on the Washington Examiner).

The program, known as the Pre-Existing Condition Insurance Plan, or PCIP, was a temporary measure within Obamacare meant to be a bridge to provide coverage to those with pre-existing conditions between the law’s 2010 passage and Jan. 1, 2014, when all plans will be required to offer coverage to those with pre-existing conditions…

What’s interesting about PCIP is that it ended up attracting much fewer Americans than expected while also costing more than expected. The reason was that those who did enroll ended up being those with extremely high medical costs — even by the standards of a program for those with pre-existing conditions.

By March 2013, HHS suspended enrollment in the program because it couldn’t afford to cover any new applicants.

As the New York Times reported in May, “The administration had predicted that up to 400,000 people would enroll in the program, created by the 2010 health care law. In fact, about 135,000 have enrolled, but the cost of their claims has far exceeded White House estimates, exhausting most of the $5 billion provided by Congress.”

The same story explained that HHS announced it “was cutting payments to doctors and hospitals after finding that cost overruns are threatening to use up the money available…”

But given the dismal enrollment numbers to date, it’s worth asking whether the exchanges could end up encountering similar problems to PCIP — only on a much bigger scale.

The plan that had only targeted 400,000 enrollees only got 135,000.  About two-thirds short of their target.  Why?  Insurance that covers preexisting conditions is very expensive.  Because it will pay a lot of claims.  The money people pay in as premiums pays those claims.  But the cost to cover these people is so great it took another $5 billion of taxpayer money.  And even then the program ran out of money with only 135,000 signing up for this insurance.  Showing the futility of buying insurance for a group with preexisting conditions.

Insurance by definition protects the financial assets of a policy holder from a possible loss.  This is the key that makes insurance actually insurance.  Not everyone that pays a premium for this protection will suffer a loss.  So there is a surplus of premiums to pay for the few that do.  The PCIP sells policies to a group of people who will all suffer a loss.  So people aren’t paying a premium to protect themselves from a possible loss.  They’re paying a premium to pay for a known loss.  And everyone in the pool will be paying and submitting claims.  So that the cost of insurance eventually equals the cost of health care per policy holder.  Which makes the insurance redundant.  And unnecessary.  While only serving to increase actual costs by introducing a third party into the process.

This is why the PCIP needed the $5 billion in taxpayer subsidies.  For without it people would not save any money by buying this insurance.  As many haven’t.  Even with the subsidies.  The taxpayers paid about $37,000 per person in addition to the cost of the premium pool.  Based on the number of months since the Affordable Care Act became law that’s about $842 per person per month in subsidies.  Based on the horror stories of what the young and healthy have to pay for their Obamacare health insurance the premiums for the PCIP are probably greater than the subsidies.  And it’s still not enough to cover their costs.  Which is why they’re cutting people off and cutting payments to doctors and hospitals.

Which will happen for the rest of us.  Once the enrollment numbers fall far short of their projections.  As they are.  And claims exceed premiums.  As they will.  Leaving them little choice but to cut costs.  Raise premiums.  Charge more for prescriptions.  Increase wait times.  And ration health care.  Not what President Obama promised.  Then again, he lied.  PolitiFact called it the Lie of the Year.  And because of the president’s lie people will have poorer quality health care.  Who may succumb to their health problems as they wait those longer wait times.  And can no longer afford the prescriptions that kept them healthy.  All because President Obama lied.

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