Wednesday, November 6, 2013

ObamaCare = Adverse Selection = Unaffordable

Obama Care is officially named the Affordable Care Act.

As with many things in politics, what has been called a horse is actually a chicken.

And so it is with the Alice In Wonderland naming of the nation's new health care law.

The technical term for this screwing of the healthy and the youngsters in order to finance health care benefits for the sick and the oldsters is adverse selection.

The common meaning of the term adverse selection is that those who are in need of health care will sign up and those who aren't won't sign up. Hence, what's called affordable is sure to be unaffordable for America's taxpayers.

Obama Care's Bigger Problem describes the next part of the ObamaCare train wreck in just a few well chosen words:

"The problem with the ObamaCare rollout is not simply that so many people have been unable to sign up on the online exchanges. The much bigger problem is that even those people who have signed up are not in the demographic groups that proponents of the law are targeting.
"Insurers say the early buyers of health coverage on the nation's troubled new websites are older than expected so far, raising early concerns about the economics of the insurance marketplaces," according to The Wall Street Journal. "If the trend continues, an older, more expensive set of customers could drive up prices for everyone, the insurers say, by forcing them to spread their costs around."
The economic term for this is adverse selection. The people who stand to gain the most—the sick and the elderly—will enroll. Many of the rest will put it off, thereby starving the program of funds needed to pay for the sick and elderly who rack up most of the bills.
"One of the fundamental flaws of the Affordable Care Act is that, despite its name, it makes health insurance more expensive," writes Avik Roy of the Manhattan Institute. "In the average state, Obamacare will increase underlying premiums by 41 percent. As we have long expected, the steepest hikes will be imposed on the healthy, the young, and the male. And Obamacare's taxpayer-funded subsidies will primarily benefit those nearing retirement—people who, unlike the young, have had their whole lives to save for their health-care needs."
The media coverage is full of reports from people who are having trouble using the exchanges, or are only now realizing that they can't keep the insurance they have, as President Obama promised. But while some of those problems are temporary and fixable, adverse selection presents a much larger challenge for the White House."
Summing Up
And so it goes in the free spending, government misled, debt ridden, and truly unaffordable land of Oz.
Generational theft continues unabated.
Thanks. Bob.

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