Friday, August 15, 2014

Called This One Too

If you are keeping track of all the dire predictions about the Affordable Care Act that have come true you have already ticked off: " won't work", "fewer people than predicted will sign up", "rates will go up", "people will lose the plan they like", "people will lose the doctor they like", "the number of young, healthy people will not match the number of older, sicker people who sign up", "most states won't take on the cost of setting up their own exchanges", and "the employer mandate will never be enforced".  Now you have another inevitable--yet denied by every Democrat at every level of Government--prediction: "People will sign up to avoid the penalty (I mean tax for Constitutional purposes) and then just stop paying their premiums".

Investors Business Daily reports that the biggest insurers in the exchanges are seeing declining numbers of enrollees as the year goes on.  Aetna says more than 120-thousand people have stopped paying their premiums since the extended enrollment period ended.  And they fully expect the numbers to keep dropping as the year goes on--until the erosion reaches about 30% of their original enrollees.  IBD couldn't get exact numbers from other large insurers--but all did admit to declining enrollment in policies offered through the exchanges.

Industry officials are trying to paint a rosy picture--hoping that these "lost customers" got coverage through new employers or Medicaid or other private insurers.  But the more likely scenario is that these people went through and purchased a policy by paying only one month's premium just so they could check the box on their 1040 form and collect their refund aniticipation loan from Hewitt-Jackson.  And once they didn't have to worry about the IRS anymore--they dropped the coverage.  Because let's be honest, if the budget decision comes down to having health insurance or being able to buy beer and pot that month--I think we all know which is going to win out.

Insurers may as well get used to this, because this will be the pattern as long as the ACA is in effect.  Or until word gets out that President Obama has unilaterally added more and more "exemptions" to the fine (I mean tax for Constitutional purposes) for not having coverage, that hardly anybody faces it anymore--and those that do find out the IRS has no interest is actually trying to collect it--at which time all of those people whom we were told were "desperate for health care coverage" will just openly flaunt the incredibly expensive law that was meant to "save them".  And because the law says insurers can't deny coverage to anyone anymore, they will just have to accept the cost of processing these applications and putting the policies into effect for the one of two months before the "customers" stop paying again.

So back to our list of dire predictions.  Up next appears to be "Insurance companies will see losses on nearly all of the policies offered in the exchanges and will either jack up premiums next year--or get out of offering them altogether". 

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