Friday, October 18, 2013

The Hidden Facts about Obamacare

For the past two weeks, the government shutdown drowned out the coverage of the Obamacare roll-out. It was a disaster but even if that had been covered, there are a host of deeper problems. In increasing importance they are:

The exchanges are a mess. Outside reviews say that the exchanges were written with 1990s technology. They are slow partly because they are exchanging data with dozens of other sites.

The Affordable Care Act isn't. The policies offered are much more expensive that prior coverage. The subsidies help some for people who qualify but even so, many people who managed to get through the software are experiencing sticker shock. The assumption was that healthy people would cover those with pre-existing conditions. It appears that the healthy people still need to pay an unhealthy surcharge to cover the pre-existing people. There was a reason that insurance companies refused to cover pre-existing conditions. It was not that they were heartless or greedy, it was that they couldn't do it and stay in business.

The biggest problem is that Obamacare is going to crash and burn. Between the difficulties in signing up, the poor rates, and the modest penalties for not buying coverage, Obamacare is not going to get enough people signed up. The only people who are motivated to sign up are the ones with pre-existing conditions. Without a large proportion of healthy people subsidizing them, the exchanges will come up short and the rates will rise astronomically. Fixing the software will not fix the problem with the rates. That's baked into the system.

All of this will become self-evident in the next few months. Opponents of Obamacare have until then to think of a workable solution to the problem of the uninsured with pre-existing conditions.

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