Friday, May 06, 2016

ObamaCare "Bronze" Plans Going Away

by JASmius

Well, of course, they are.

You know how ObamaCare is costing private health insurance carriers a buttload of money, and now one after the other of them is bailing out of the cartels altogether while those that, for whatever reason, linger are having to jack up their premiums and deductibles at an even more frantic pace?  And you know how one of the ostensible purposes of the Unaffordable Care Act was to "bend the cost curve downward" for health insurance policyholders?

Well, once again, the Obama Regime is siding with the health insurance companies over health insurance policyholders in a desperate attempt to forestall the death spiral they've spent six years ridiculing:

Given the low profitability of bronze plans in the [Una]ffordable Care Act [cartel]s, some health insurers might stop offering policies on that metal tier, Inside Health Policy reports.

One problem, according to the article, is risk adjustment – as CMS data indicate bronze is the only metal level for which insurers of all sizes in the individual and group markets had to pay into the program. Federal officials are considering some changes to the risk adjustment program, which some say unfairly penalizes smaller insurers.

Already, filings show a CareFirst BlueCross BlueShield subsidiary in Virginia will transform its bronze plans into silver-level plans for 2017, according to Inside Health Policy, and experts tell the publication this could set a troubling precedent for the industry.

If insurers do drop their bronze plans, it would have the effect of further destabilizing the [cartels], according to Sean Mullin, a senior director at Leavitt Partners. That’s because such enrollees, which tend to be lower-risk and want the cheapest plans, will likely leave the [cartels] altogether, further depleting the [cartel]s’ share of healthier enrollees. [emphases added]

In a way, this development probably isn't all that surprising.  Given the much larger than expected (by the Regime, or so they'd have us believe) number of "healthier enrollees" who have opted to pay the much lower fine than get gouged by even the bronze-level plans, it means, in market terms, that there simply isn't much demand for them, so not many of them are being sold.  And what, in the free market, does a company have to do when their sales decline?  Either offer different or improved products, cut prices to try and restimulate demand, or race prices to try and make up the revenue shortfall.  The Regime is, naturally, going for what's behind Door #3 (the first option isn't applicable to a redundant second "Silver" level since (1) that does not constitute an "improved" product in terms of what Bronze level "customers" want - low-cost hospitalization/catastrophic-level insurance plans with HSAs for any out-of-pocket costs - and therefore (2) it will further depress demand.

Which is why it will further destabilize the system:

In order to achieve solvency, the ObamaCare [cartel]s require 40% of their customers to be young and healthy enough to pay large sums over time into the [cartel]s without taking out much in benefits. That way there’s enough money in the coverage pool to pay for older and sicker customers. However, currently only about 28% of ObamaCare customers are young and healthy enough to keep the system afloat. …

Comparatively inexpensive Bronze plans are one way to get younger and healthier people paying into the system — but for the Young & Healthy, those plans are too expensive to buy (even with subsidies) and too expensive to use (due to sky-high copays and deductibles). For many, already it’s cheaper just to pay the penalty-tax-thing for non-coverage and take their chances — which for the Y&H is usually a safe bet. [emphasis added]

That's precisely why those economic incentives were built into the program.  It was designed to fail and take the private health insurance market down with it in order to pave the way for the Final Crisis that would lead straight to single-payer.  But with the risk corridor bailouts stripped out of the equation (thanks to Marco Rubio a couple of years ago), the private carriers are withdrawing from the cartels rather than let themselves be driven into bankruptcy, and it's the UCA itself that is ever more rapidly circling the drain.

And so, the Regime is gouging its remaining "customers" to keep the tottering program going - just like they once accused the health insurance companies.

What's that old saying?  "What goes around, comes around".

A pity Republicans are throwing away any chance of repealing the whole mess by....well, you know.

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