Obamacare is now the law of the land. Very soon, health insurers will be more heavily regulated by the federal government.
Will this be good or bad for individuals, and insurers?
I care more about individuals than insurers, but insurers still play a large role in healthcare. Without insurers, we have no protection from large medical bills. But the long asked question is , Why does it have to cost so much, and can't the government do something about it?
The above question was asked, and answered by the Democrats who control our government. They singlehandedly took over the system without any bipartisan support. If the changes are deemed to be good, they will be seen as heroes, as achievers. But if the changes fail, they will be held accountable.
Today, I want to focus on the health insurers and what will happen to them under Obamacare.
First let me set some conditions. Let us assume the following:
1) No more pre-existing conditions
2) Children? may remain on family policies until age 26
3) No more lifetime limits on coverage
There are others, but I have not yet found the time to read thru the 2700+ page law. It is next on my list after I finish reading War and Peace.
Let us look at what will happen to insurance premiums with just the above three conditions.
All three will raise their cost of doing business, and increasing the amount they pay out in claims.
So the insurers have a few options:
1) Raise their premiums to compensate
2) Pay doctors and hospitals less
3) Try harder to ration care
Now I will take these one by one.
1) If insurers raise their premiums, Obama and the Congress will scream bloody murder, further vilify their industry and try to move public opinion towards an even greater government takeover of healthcare.
2) If insurers try to pay doctors and hospitals less, a breaking point will occur where doctors stop participating, with some even retiring. Can you say, a further shortage of doctors available, resulting in longer waits for care?
3) If insurers try harder to ration care, individuals and employers who pay the premiums will revolt, causing the federal government to try for a further takeover of the system. Employers will decide it is not worth it to pay for health insurance for employees, in essence, pushing their employees into the government insurance exchanges, which will eventually lead to the coveted "public option".
The end result, as I see it, is as follows:
1) Insurance premiums will go up, up, up
2) Insurers rationing of care will go up, up, up.
3) Insurers profits will go down, down, down, with many mergers, before outright going out of business.
4) Physicians and hospitals will also merge, and be effectively run by the government.
Obamacare has been skillfully set up, to be a success. But the success it seeks, will be in destroying the private healthcare system as we know it today!