The claim that Obamacare is imploding (or exploding) is just plain wrong. It is working exactly as designed. In a failed attempt to gain the support of free-market-obsessed conservatives, the Affordable Care Act was designed to use “market forces” to help control prices. Unfortunately, a free market means that the prices can move up as well as down, and the fact that the prices went up simply proves that the ACA is working the way a free market is supposed to work.
Had the ACA been designed to set prices or insurers by policy, then increased prices or loss of insurers would have been a bad sign. But insurers dropping out of some markets just means that they didn’t make enough money from those markets; leaving those markets is exactly what they are supposed to do. Insurers raising prices just means that their previous rates produced an insufficient amount of profit. For-profit businesses are supposed to make profits: failure to adjust to market conditions is a breach of management’s responsibility to their share holders. This is the way that a free market is supposed to work.
In all those counties where there is only one or two insurers, the insurers’ profits will probably go up. If their profits go up enough, they will attract the attention of other insurers and possibly draw them back into the markets that they previously abandoned. Or not. It’s a business decision, not a political decision. This is Free Market 101. This is really basic stuff. We shouldn’t have to be explaining to the people and politicians who think everything should be managed and priced in the free market.
Same deal for rates going up for many people. It is the market responding to losses or insufficient profits in the previous year. If their rate increases are sufficient to gain large profits, their increased success will draw in additional competition which “could” eventually bring reduced prices. Emphasis on the word “could”.
The image at the top of this column is from a fantastic interactive map developed by the Kaiser Family Foundation (no relation to Kaiser Medical). It allows you to hover your mouse over or click on various counties in the U.S. and see the number of insurers in each county in both 2017 and 2016. For example, most of the counties in the San Francisco area have more insurers in 2017 than in 2016. Here’s the link again: kff.org/… it is worth looking at all those gray counties with 3 or more providers.
So the next time you hear a conservative or Republican spreading lies about Obamacare collapsing, remind them that it is working as designed. If they don’t like it, they should join you in demanding a Universal Healthcare system. They should join you in declaring that life shouldn’t belong to the highest bidder, that some parts of the economy shouldn’t be rationed strictly on a price basis, that the value of a human life is not determined by the size of their paycheck.
“We hold these truths to be self-evident; that all . . . are created equal . . . with certain unalienable Rights, that among these are Life . . . .”