Hillary Clinton opposes repealing Obamacare; that, by itself, should cost her the election.
The media has been pretty much silent lately on anything that would lead America to think about repealing Obamacare. They acknowledge that rates are going to go up massively again but then they distract us with other stories.
A possibility that might lead to a shattering of the media evasion is rates shooting up right before the November election.
I can’t believe that Obama would allow this to happen. If Hillary is the only alternative to Trump, I’m sure the Obama Administration will find a way to delay rate hikes.
But people who don’t want Hillary to be our next President need to trumpet the fact that Obamacare continues to strangle us. As Megan McArdle recently wrote, Obamacare may be impossible to continue.
In health insurance markets, this phenomenon is known as the adverse-selection death spiral. Basically, every time the price of insurance goes up, many of the people in the insurance pool who use the least health care decide that it makes more sense to go without the insurance and bear the risk themselves, and they drop their coverage. That means you’re left with the more expensive patients to cover, which means the average cost goes up, which means prices have to go up … and, well, you get the idea. The price the market eventually finds may be so high that very few people want to buy the insurance.
Now, there are factors weighing against this, most notably the mandate and the subsidies. So far, the mandate seems to have had very little effect on people’s propensity to buy insurance. I’ve been careful to say in the past that that might change, because the mandate penalties were phased in over a few years and are only now at full strength. However, next year will pretty much tell us whether the mandate is going to work. […]
The subsidies, on the other hand, are obviously affecting behavior, because most of the people buying exchange policies qualify for substantial subsidies. The good news is that this will blunt the desire for healthier people to drop their coverage as the price of policies rises, because those cost increases will be passed on to the government rather than the consumer. The bad news is that health is positively correlated with income (on average, the richer you are, the healthier you are likely to be), so a market in which the poorest people are the least likely to drop their coverage is a market in which you are selecting for a sicker, more expensive pool.
McArdle, respectable Bloomberg blogger that she is, refuses to predict what will happen and holds out hope that a price point will be found. But this seems so much like Puerto Rico’s death spiral that we will soon see in Illinois and other places.
- First, you promise benefits you can’t afford and go into debt to get them.
- Second, you attempt to force the healthier/wealthier people to pay for others. In the case of Obamacare, young, healthy people refuse the insurance at rates intended to subsidize older unhealthy people. In the case of Puerto Rico, professionals who can produce substantial income move to other places with lower taxes.
The lesson here is that government help always eventually produces greater damage.