Industry death spiral, you are upon us. Welcome to the inevitable result when government passes a law that presumes to eliminate market forces that are natural and entirely rational, only to make off-the-cuff tweaks and exemptions in response to political blowback without any consideration of how said changes will affect the delicate balance of the market as a whole - not that any such consideration was given when the law was passed in the first place. Humana had no choice but to admit the following in its latest securities filing (
via Reuters):
In short, people who prefer not to enroll in ObamaCare because they preferred the options they had are now availing themselves of the opportunity to evade this monstrosity, at least for the moment. That leaves the pool even more dominated than it already would have been to people who are enrolling only because they have no other choice - mainly older people or those with pre-existing conditions. When that's your pool, you're in trouble. That was the idea of the individual mandate in the first place. Democrats did understand, in spite of what they said, that many people wouldn't voluntarily sign up and they would have to be forced. So force them they would, because that would be the only way to get the premium dollars that would be necessary to provide coverage for the old and the already-sick.
The whole time Obama was assuring people that if they liked their plan they could keep their plan, he knew perfectly well that if it actually played out that way, it would drive the health insurance industry to financial ruin. But when faced with political consequences for breaking the promise, he threw the insurers under the bus and sacrificed a crucial element of his grand scheme in the service of saving his own political #. The consequence? Exactly what you see. The mix is terrible, even worse than insurers first feared, and without repeal they're headed for the lovely experience of coming hat-in-hand to the government for a bailout,
which is provided for in the law, by the way.
We all hope this is going to end badly for Democrats in November because they richly deserve it. But it's already locked in that this is going to end very badly for the health insurance industry and its policyholders, not to mention health care providers across the country. It's hard to feel too sorry for the insurers because they got in bed with the Democrats to help create this fiasco, but the people who have been forced to depend on them for coverage are going to get screwed very badly. As are the taxpayers.
We're only beginning to see how big a disaster ObamaCare will really be.
