400,000 expected to enroll; five billion to pay claims and then reality sets in; 125,000 enroll and the $5 billion is nearly gone seven months before the program ends.
That is the temporary program for people with pre-existing conditions under Obamacare. Do these Americans need health care, certainly they do, but what we don’t need is politicians making unrealistic promises based on absurd assumptions. The short-term solution for the Administration is simply to cut payments to doctors and hospitals treating these people. The long term solution; well that is to have the people using the health insurance exchanges along with federal tax credits pick up the bills.
The New York Times (May 20, 2013) has an excellent article on this significant problem and concludes with this:
When the federal program for people with pre-existing conditions ends on Jan. 1, 2014, many of them are expected to go into private health plans offered through new insurance markets being established in every state. Federal and state officials worry that an influx of people with serious illnesses could destabilize these markets, leading to higher premiums for other subscribers.
For this reason, federal and state officials say, they will try to recruit large numbers of healthy young people to buy insurance. Their premiums would help pay for the care of less healthy people.
I urge you to read the full NYT article and also to read this recent Quinnscommentary blog post on this subject.
You see, adverse selection is very real. People who have foregone insurance and now have serious illness spend a great deal of money on health care which, contrary to popular myth, is why insurance companies charge more and limit coverage and also why employer plans make people wait a full year if they don’t enroll upon hire. When these people can’t be denied coverage or charged more all other insured in the group will pick up the burden of these claims … just so you know.
If you are a healthy young person, take notice, government officials expect you to buy insurance you are unlikely to use in order to help pay for those who do use health care … a lot.
Don’t get me wrong, I think the responsible thing to do is to carry insurance, but if federal officials are counting on this, they are in for a shock.