Today the CBO (Congressional Budget Office) adjusted figures for the participation in the ACA, Obama's signature healthcare law. They concluded that an estimated 6 million people will opt to pay the penalty vs enrolling in an insurance program. This will undoubtedly drive up costs by only enrolling those that 'need' the insurance. If only the people who are sick sign up, than the cost will spiral out of control. Welcome to the law of unintended consequences.
Lets do the math.
If you have, lets say 1000 people in an insurance program and 250 of them use more services a year than they pay in insurance cost. Those 250 people use $4 million worth of services a year. Now, in order for the insurance to be viable the other 750 healthy people have to balance that cost. So..if the remaining 750 people use $2 million in services, then we need to split that among the 1000. Add 15% for administration fees, $900,000 and you get a grand total of $6.9 million. So that ends up being $6900 per person per year for coverage. Now that's just to break even. Now lets skew those numbers a little...What if the healthy people just opted out of the pool and paid the penalty? It would save them a chunk of coin, pay one time penalty per year like $2000 instead of $6900 for services that they don't utilize. So, what you end up with is more like 750 of those 1000 people using more services than they can afford to. All of a sudden the numbers go from $6.9 million in costs to $17 million per 1000 covered. Split that among the policy holders and you have $17,000 per person per year.
See where this is going? A cost like that will surely drive more and more healthy out of the insurance policies and to the penalty side. People will, if able, pick the cheapest alternative. This will create a cascade effect in healthcare. Less healthy people seeking any healthcare, unhealthy people and their insurance unable to pay the spiraling costs, which will close small hospitals/clinics, reduce access...ect.
Some people can look at facts and form a coherent opinion from them. Then, there are the progressives.
Lets do the math.
If you have, lets say 1000 people in an insurance program and 250 of them use more services a year than they pay in insurance cost. Those 250 people use $4 million worth of services a year. Now, in order for the insurance to be viable the other 750 healthy people have to balance that cost. So..if the remaining 750 people use $2 million in services, then we need to split that among the 1000. Add 15% for administration fees, $900,000 and you get a grand total of $6.9 million. So that ends up being $6900 per person per year for coverage. Now that's just to break even. Now lets skew those numbers a little...What if the healthy people just opted out of the pool and paid the penalty? It would save them a chunk of coin, pay one time penalty per year like $2000 instead of $6900 for services that they don't utilize. So, what you end up with is more like 750 of those 1000 people using more services than they can afford to. All of a sudden the numbers go from $6.9 million in costs to $17 million per 1000 covered. Split that among the policy holders and you have $17,000 per person per year.
See where this is going? A cost like that will surely drive more and more healthy out of the insurance policies and to the penalty side. People will, if able, pick the cheapest alternative. This will create a cascade effect in healthcare. Less healthy people seeking any healthcare, unhealthy people and their insurance unable to pay the spiraling costs, which will close small hospitals/clinics, reduce access...ect.
Some people can look at facts and form a coherent opinion from them. Then, there are the progressives.
