The big O-bubble

[Plane]

http://www.msn.com/en-us/money/healthcare/the-big-obamacare-bubble/ar-BBvqAx3?li=BBnb7Kz

"We have done nothing to improve the outcomes of the 10% of the population that drives 80% of our claims costs. We have merely pumped billions of dollars into these [ObamaCare] exchanges masking the real problems. Unless the government can continue to pump money into these exchanges, the end result is not that hard to imagine. It is not a question of how, but when, this will all come home to roost."

The facts support this. Millions of previously uninsurable sick people are flooding the insurance market, driving premiums sky high. As noted in the Fiscal Times, "The combination of market forces and limitations imposed by the [ACA] will put enormous pressure on insurers to up their premiums." The pressure on insurers is undeniable, including the $650 million losses recently reported by UnitedHealth.

With these losses, rates on the exchanges are exploding. Exchange premiums in Michigan are set to jump up to 17.3 percent. Virginia average premium increases could go as high as 37.1 percent. Comparing the state monthly premium averages from 2013 to 2016, almost every single state has increased significantly.   increased significantly. There is no stop-loss. In fact, two of three federal programs to manage this exact risk are due to expire in 2017. Without these programs to fall back on, many insurance companies likely will need to jack up their premiums even higher or bail out of the exchanges all together.

So how did we miss this? Like in "The Big Short," nobody asked those actually working in the doctor's offices their opinions. Dr. Tommy McElroy, CEO of an innovative concierge practice, Echelon-Health, is puzzled: "When the [ACA] was written, nobody came around to ask doctors what would happen when the most complicated patients were shuttled to the exchange plans. A small practice can't survive; that's why doctors are being bought up by hospital groups or abandoning insurance altogether for membership medicine."

With more doctors jumping ship and healthy patients choosing to take the annual penalty rather than buy extremely overpriced exchange plans, what's left to avoid a healthcare economic freefall? President Obama and Democratic nominee Hillary Clinton both have recently touted a renewed push for a government funded "public option." What irony, as the "public option" looks an awful lot like the government bailout of the mortgage banks. Only here the big health systems and insurers are too big to fail.

"The Big Short" opens with Mark Twain's thesis, "It ain't what you don't know that gets you in trouble. It's what you know for sure that just ain't so."