Time Expiring for Obamacare to Avoid Death Spiral
Does anyone really believe that they will do away with the law if it doesn’t bring in enough money? Can you name another government program that they did away with because of lack of funds?
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The dreaded “death spiral” for Obamacare is looking more like a reality. With 2.2 million Americans having signed up for Obamacare from October 1 to December 28, older, sicker pools of enrollees (ages 45-64) are outnumbering the younger, healthy enrollees (ages 18-34) by a margin of 55% to 24%.
According to a new Kaiser Family Foundation report, Obamacare will need about 40% of enrollees to be young, healthy adults to “cross-subsidize” the older and sicker participants. “If enrollment among young adults falls short, then the total amount of premiums collected by insurers will be less than the total health care expenses of enrollees plus administrative overhead and profit,” the report states. “And, if insurers believe that those enrollment patterns will continue into 2015, then they may raise premiums higher to compensate for the loss.”
What’s more, for the Affordable Care Act to be “affordable,” the Obama administration needs over seven million total enrollees by March 31. Yet, being more than halfway past the sign-up period, they’re at less than one-third (31%) of their goal. HHS Secretary Kathleen Sebelius and others in the administration have tried to mask the insufficient turnout so far by adding Medicaid enrollees to bolster the numbers.