Yesterday I wrote about the potential for a bailout of the insurance companies because the new model as forced by the Affordable Care Act may prove to be unsustainable. This morning FOX News covered the conversation again.
Real people are concerned about this very potential risk. So much so, that a recent story over at Investors reveals that two-thirds of Americans oppose bailing out the insurance companies. This just shows how horribly uninformed many of Americans are. If the insurance companies go belly up it is because the plans are unsustainable as they are heavily dependent on healthy Americans, and young Americans buying into them. The problem of course is they cost is adversely stacked against those young people who just don’t see the financial gain.
Young people aren’t stupid, why pay for something when you don’t need it when the Government mandates that you can get it when you do need it. Recent stories covering the lack of interest in youth shouldn’t be that surprising this was the same status before the Healthcare law took effect. Those 30-40 million numbers that the can be insured now as opposed to before include those youth who could have had insurance but chose not to. While those who could not get insured was sitting much closer to the 10 million mark.
Over 30 million additional Americans were forced into losing their current insurance by the Affordable Care Act, of those who lost it many got a new worse more expensive plan. I say worse because it was not the plan they wanted, it was not the coverage they had, many lost their Doctors and so on. That number according the the CBO is potentially going to hit 90 million people.
The point I’m attempting to drive home here, is that not only is the youth not signing up, but the Federal Government forced insurers to drop plans and therefore customers in addition to stacking the deck against the customers the plan needs most in order to be sustainable.
If the Insurance companies fail it will be the Federal Government, the House of Representatives, the Senate, and the Office of the President who are 100% culpable for forcing the companies into practicing an unsustainable business. If ever there were a case for a bailout and a scraping of the Affordable Care Act this would be it.
Much like the bad Governance that lead to the banking crisis of 2008 and the bailout to save the financial industry the risk facing the insurance industry is the fault of politicians. Actually, it is even more so the fault of politicians in this case. In the years that lead up to 2008 the banks had some choice with a huge Government incentive to make real bad decisions. In 2013 with the Affordable Care Act the insurance companies have no choice and are 100% beholden to the law.
Scrap the law, conduct damage control and start a slow process towards change not this crazy one party deal that we have right now
