Not Everyone signing up for Obamacare is paying for Obamacare

Posted by PITHOCRATES - April 6th, 2014

Week in Review

The big question in the Obamacare signups recently released by the Obama administration is this.  How many people have actually sent a payment into their insurance company?  For signing up for health insurance doesn’t mean you have health insurance.  You have to pay for it first.  With ‘first’ being key.  As anyone who has paid a health insurance premium knows.  You pay for next month’s health insurance this month.  That is, it’s cash before delivery.  As the insurance companies need the cash before they can pay any benefits.  This is the way all insurance has worked since the dawn of insurance.  First money goes into an insurance pool.  Then said insurance pool pays insurance claims.  The money must come first.  There’s just no other way for it to work.

So, is the money coming first with Obamacare?  As it turns out, the majority of it is.  At least, according to a leading federation of Blue Cross and Blue Shield health plans (see Blue Cross group sees Obamacare premium payments at 80-85 percent by David Morgan posted 4/2/2014 on Reuters).

A leading federation of Blue Cross and Blue Shield health plans said on Wednesday that it is receiving premium payments from 80 to 85 percent of its new Obamacare health insurance customers.

The estimate, released by the Chicago-based Blue Cross Blue Shield Association, reflects enrollment activity among 35 Blue Cross Blue Shield plans in 47 of the 50 states, including plans sold by WellPoint Inc, from October 1 through February 1…

If the Blue Cross Blue Shield payment rates held true for enrollment across the board, between 5.7 million and 6 million of the 7.1 million would actually be enrolled in coverage.

So that means the Obama administration is overstating the enrollment numbers from 18.3% to 24.6%.  And between 1.1 million and 1.4 million haven’t paid for the Obamacare they signed up for.  Of course, that’s assuming that the 7.1 million were all new Obamacare enrollees into private health insurance plans.  And not those who signed up for Medicaid who will never write a check for their coverage.  Which will not help the insurance companies pay for the expanded benefits mandated by Obamacare.

So the Obama administration’s numbers are suspect to say the least.  As is the continued existence of the private insurers.  For if they don’t get 7+ million signing up for Obamacare (with a heavy concentration of the young and healthy who will file few claims) the cost of caring for the old and sick will bankrupt them.  Of course if this was the plan all along the Obama administration could at least claim something in Obamacare was working according to plan.

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