As state governments continue to buckle under the weight of skyrocketing insurance claims, one has to wonder just how long the Obamacare charade can continue. A New York Times article from July of this year reports that the new health insurance customers, benefiting from the Affordable Care Act, are far sicker than insurance providers had anticipated. Those companies are seeking rate increases of up to 40 percent to stem the millions of dollars in losses they are taking due to the increase in claims made by these new customers.
One example is Oregon, where it was found that the cost of providing coverage totaled $830 million in 2014 while premiums were only $703 million. Many states experienced something similar. Utah-based company Arches Health Plan is requesting a 45 percent rate increase and Scott & White Health Plan of Texas is seeking a 32 percent rate increase, as are others.
The death spiral that these rate-increase requests herald should make all those who have blindly supported this massive intervention pause and ponder over just what their faith in government omnipotence has wrought. How much devastation will be allowed to materialize before they realize that the progressive totem of universal healthcare is unrealizable? That may be too much to ask, considering the generous helping of blind faith that fueled the passage of Obamacare.
We can expect a stay-the-course attitude, on the part of both the Progressives who created it and Republicans who don't seem all that interested in repealing it, in response to premium hikes, public opinion be damned. That's because the political class never really cared about what actual Americans thought about their healthcare scheme to begin with. While that has always been obvious to those paying attention, Obamacare architect Jonathan Gruber made that abundantly clear in several public interviews where he mocked the stupidity of the American people, and touted the benefit that a lack of transparency had on the process of selling Obamacare to the public.
While the popularity of Obamacare has remained split along party lines, and as seams continue to split open, it seems clear that support for the bill will fizzle. As Obamacare enrollees see their rates increased by as much as 30 percent or higher, they will surely begin to yearn for the anarchic days before the Affordable Care Act.
Just what is this death spiral, anyway? Obamacare architects have bet the farm on having young, healthy people sign up for insurance to effectively subsidize all the sick people that now have access to insurance. The phrase "death spiral" refers to the series of rate hikes and customer drop-outs that feed on each other until the insurance exchange goes bust. It occurs when young people decide not to sign up because they don't feel the need for health insurance. As premiums increase in response to the increase in claims, the higher price makes it even more unlikely that healthy people will sign up for insurance. Fewer healthy people subsidizing a greater number of sick drives the price ever higher, until all healthy people drop their insurance completely, leaving only the sick stranded on the insurance exchanges.
The cycle seems inevitable, indeed built into the logic of Obamacare, and how could it not be? The entire law was built around the fantasy that government can provide cradle-to-grave care for all citizens, as if by magic. It's a fantasy that will have real consequences, however, as it impacts most negatively those too poor to shield themselves from the bad decisions of government technocrats like Jonathan Gruber, who don't bother themselves with the concerns of the peons anyway.
The death spiral of Obamacare can be seen as a metaphor for the decline of the American republic as it flames out in the final years of its pursuit of empire. The seemingly desperate drives to further cartelize the American economy via regulation mirrors the blind, overreaching militarism of the political class as it inserts America, and in turn American citizens, into every foreign conflict around the globe.
The question isn't whether we should put an end to foreign and domestic interventionism. Rather, the question to be asked is, how much devastation should be allowed to occur before these various interventions are scrapped? How deep of a hole will Obamacare be allowed to dig, and will we all tumble in once it gets too big?
As the reality of the precipitous rise in Obamacare claims sinks in, and the rosy future predicted by Obamacare's supporters begins to mutate into something dreadful, it would be wise to cut our losses and scrap this monstrosity of legislative hubris. The question now should be: Who will have the courage to pull the plug on this costly mistake?
Shane Smith is an accountant living in Norman, Oklahoma. He writes for Red Dirt Report. Liberty is his religion.
You don’t have to play by the rules of the corrupt politicians, manipulative media, and brainwashed peers.
When you subscribe to The Daily Bell, you also get a free guide:
How to Craft a Two Year Plan to Reclaim 3 Specific Freedoms.
This guide will show you exactly how to plan your next two years to build the free life of your dreams. It’s not as hard as you think…
Identify. Plan. Execute.Yes, deliver THE DAILY BELL to my inbox!
With legalization sweeping the country, these penny stocks have already begun skyrocketing in price…
Take action TODAY, and you have a once-in-a-generation opportunity to turn a tiny $50 investment into an absolute fortune.