Mother of Mercy, Is This the End of Obamacare? The Demographics Say Yes
Over at the Washington Times, Sean Parnell certainly thinks so, no matter which way the Burwell case goes in the Supreme Court:
The Supreme Court decision in King v. Burwell, the case challenging the Obama administration’s decision to award tax credits for health insurance sold through federally established exchanges, could turn on the question of whether a ruling that ends the tax credits on federal exchanges might cause something known as a “death spiral” in health insurance markets.
The good news is the answer is probably no, but the bad news is that’s only because the death spiral has probably already started. A death spiral generally occurs when insurers are forced to raise premiums sharply to pay promised benefits. Higher premiums cause many of the healthiest policyholders, who already pay far more in premiums than they receive in benefits, to drop coverage.
When healthy policyholders drop coverage, it leaves the insurer with little choice but to raise premiums again because they now have a risk pool that is less healthy than before. But another premium increase means many of the healthy people who remained now drop their policies, too, and this continues until the only people willing to pay the now-very-high premiums are those with serious medical conditions.
This, of course, was all evident from the start of this wretched fraud of a Democrat program. You can't mandate insurance-on-demand, and you can't extend it to cover healthy young adults without demolishing the entire concept of "insurance" in the first place. But then Obamacare was never an insurance program; it's simply a tax increase on the middle class imposed via the individual mandate.
The other sign health insurance markets are in the early stages of a death spiral is the age mix of those buying policies through Obamacare. Originally it was estimated that around 40 percent of enrollees had to be in the relatively healthy 18 to 34-year-old age segment, so their premiums could be used to pay for the health expenses of older, less-healthy enrollees. So far it appears only some 28 percent of enrollees are in that coveted age group, which also comprises around half of the uninsured.
All of this means insurers are getting a risk pool that is less healthy than expected, and more premium hikes are around the corner. While subsidies hide some from the full impact, others in the middle class will not be shielded.
It will undoubtedly take a few years to know for sure, but for anybody concerned about setting off a death spiral or thinking Congress surely didn’t intend to do so, don’t worry. It looks like it’s already here, whether Congress intended it or not.
John Roberts should have killed this misbegotten beast the first time when he had the chance, but he was right about seeing it as a tax. Now, with Obamacare's ultimate doom written on the wall, the chief justice has a chance to rectify his cowardice and do the right thing.