In 2013, the CBO predicted 24 million would sign up for federal or state operated health exchanges. Only 11.1 million have done so. This catastrophic shortfall means insurance companies are often losing money or are in danger of doing so. Saying they are bad or evil misses the point. In our screwy system of capitalism, the primary legal responsibility of a company is to return money to stockholders. If the insurance companies got all warm and fuzzy and decided to run Obamacare at a break-even point (assuming they could), they’d get sued by institutional owners of their stocks. Therein lies the problem. If healthcare for all is socialist, then it can’t run in a capitalist context. Instead, there needs to be one system that applies to all, managed by the government. Yes, the government could screw that up. But the mess we have is clearly not working well either.
There are already too many areas in the country where only one provider remains. That means no competition and the insurer can charge whatever they want. Another horrendous problem with Obamacare is those getting subsidies have to pay back the subsidy if they earn more than they expected. This really screws the self-employed who often don’t know what they will make in the coming year.
For Obamacare to work as predicted, healthy people need to sign up, and they have no real inducement to do so, especially when the plans are expensive with high deductibles.
Enrollment in the insurance exchanges for President Obama’s signature health-care law is at less than half the initial forecast, pushing several major insurance companies to stop offering health plans in certain markets because of significant financial losses.
As a result, the administration’s promise of a menu of health-plan choices has been replaced by a grim, though preliminary, forecast: Next year, more than 1 in 4 counties are at risk of having a single insurer on its exchange.
Debate over how perilous the predicament is for the Affordable Care Act, commonly called Obamacare, is nearly as partisan as the divide over the law itself. But at the root of the problem is this: The success of the law depends fundamentally on the exchanges being profitable for insurers — and that requires more people to sign up.