ObamaCare's Economic Dominoes
By C. MacLeod Fuller
Now that health care reform in the shabby disguise of ObamaCare has been crammed through Congress, a peek at the president's precariously stacked dominoes confirms that sooner than you may suppose, there won't be any private companies selling health insurance in America. Consider:
There are approximately 1,300 insurance companies in America today.
Beginning January 1, 2011, these companies will be required to pay out 85% of all premiums collected as direct medical care, leaving 15% of corporate income to fund operations and yield any potential profit.
The health care industry has a profit margin of about 3%. Most American businesses rely on securing annual profits of 8% to 10%. American oil companies operate on about 4% profit. Alcoholic beverage sales net annual profits of 26%.
To maintain even slim profitability or cash reserves, insurers will be compelled to run austerely.
Why?
Among numerous regulations implemented immediately, ObamaCare cannot deny children with preexisting illnesses coverage, no matter the illness, no matter the long-term cost -- and children are now "children" until age 26. It is irrelevant there may never have been any contribution for such children into an aggregated "risk pool" of insurance policy purchasers -- the very idea of which is to "spread the risk" around. They will be able to have all their medical costs paid for by the responsibility and forethought of unrelated others.
Adults currently uninsured due either to preexisting illness or choice can now buy into government-run and guaranteed plans which insurance companies will in essence be required to assume beginning 2014, when they will no longer be allowed to exclude anyone based on actuarial or other rational data standards.
Costs for insurers will further increase as they pay more and larger amounts in claims that have no dollar ceiling -- they are immediately banned from implementing lifetime caps on coverage.
Under ObamaCare, once subsidized purchases begin no later than 2014, millions of formerly uninsured will be eligible for federal subsidies to help purchase coverage they can already afford but choose not to buy. There are currently eight million uninsured Americans earning over $50,000 a year and another nine million uninsured Americans earning in excess of $75,000 a year who willfully play medical roulette by refusing to purchase health care insurance for their dependents. Nevertheless, a family of four with an income of $88,000 a year will be eligible for financial aid.
Healthy, and especially young, people will predictably opt to pay the $750 ObamaCare fine assessed for failure to purchase coverage since it is less than the yearly cost of insurance premiums. Quite literally, there will be no need to purchase "insurance." One can simply wait until illness or accident strike, but in the meantime spend money in other ways.
More and more workers and families who previously sustained the business of insurance companies will weary of witnessing millions of Americans game the system and take a free ride. Formerly responsible citizens will allow their health care coverage to lapse and adopt the same wait-and-see attitude. If an emergency occurs, they too will have failed to pay into a health care risk pool for months or years, but their medical bills will be paid -- by insurance companies who received nothing from them or millions of others who made similar self-referential decisions...
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