Friday, October 18, 2013

Obama's Problem

Obama's big problem today is that his website doesn't work.  We've talked about this before, but other folks are starting to notice.  From the Huffington Post:
:Time remains for these problems to be resolved, but not much. "If things aren't resolved in three weeks, we've got some serious, serious problems," said Timothy Jost, a law professor and health care reform expert at Washington & Lee University in Lexington, Va., and an Obamacare supporter. "I don't think we're anywhere close to there yet, but if the whole thing collapses, it'll be another generation before we get this problem fixed."
Another generation, huh?  It seems that's the problem now.  Folks that can't access the marketplace, or don't want to access the marketplace, especially one that's twitchy and crashes for no apparent reason.
 Under these circumstances, the lion's share of the people who do whatever is necessary to sign up through HealthCare.gov are likely to be the sickest and most expensive to cover because they have the greatest need, Laszewski said. That would make the pool of people covered very costly, causing health insurers to lose money and likely rethink whether they want to participate in the exchanges, he said. "The fundamental threat to Obamacare is we don't get enough healthy people in the pool to keep the rates reasonable, and they are in grave danger of that problem," he said.
That's the problem in a nutshell.  If you don't have lots of young, healthy people signing up, they'll simply pay the penalty, which will probably be less expensive than the insurance.
If these problems persist longer -- weeks, months, a whole year -- the entire Obamacare project falls apart, Laszewski said: "It's a holy shit moment."
This whole project seems to be unsustainable from an actuarial standpoint, which is why it is doomed to fail.  Perhaps our best bet is simply to stand back and document the demise of this signature plan.

1 comment:

Rivrdog said...

What happens to that "penalty" money? Gets paid to the IRS, correct? The IRS directs all it's receipts into the General Fund of the US Treasury, right?

Okay then, smarties, how to we know that this money gets back into the ObamaCare sub-budget to pay to lower costs for the po' folks? Will it happen the way that Sociable Seguridad was supposed to, but never did?

When and if ObamaCare actually gets rolling, I bet it still won't stand the most cursory audit.