This blog is not about politics, but rather attempts to address the facts as we know them. The biggest prizes in healthcare reform are 1) Coverage for people with pre-existing conditions and 2) Coverage for people that otherwise can’t afford the premium.
The reason that some people want to change (or fix) Obamacare is that it’s putting the insurance carriers into a “death spiral”, which is a situation whereby more sick people apply for health insurance than healthy people. Therefore, the claims that are paid out by the insurance company far outweighs the premiums they take in. When this happens, the insurance companies have no choice but to leave the market – leaving little to no choice for consumers. As of this writing, Anthem just announced that 2017 will be their last year in the marketplace unless something changes.
So why not have the government take over health insurance? After all, they do a fine job with Medicare. But we all pay for Medicare as a payroll deduction throughout our working careers – so when we turn 65, we’ve already pre-paid our Medicare premiums. However, there is no payroll deduction for under-65 health insurance… so where would the money come from to fund health insurance if the government took it over?
This is an almost impossible problem to solve. And even the best solution will be good for some, and not-so-good for others. There just isn’t a way to make everybody happy without having an unlimited pool of money. Under any circumstance, the solution must be sustainable… because if the solution is on course to burn itself out, then it really doesn’t help anybody over the long haul.
Neil Steinman is the principal of Orange County Health & Life Insurance in Orange County, CA – and has been serving the needs of California residents for nearly 20 years.