Economics Healthcare Politics

Are you Ready for the Obamacare Death Spiral?

Last week I outlined for you in these very pages one of the most basic problems of the Obamacare socialized medicine system. The problem is that young, healthy adults have no reason to join the Obamacare healthcare scheme. The cost of opting out will be much lower than the cost of buying insurance coverage that they do not need. This will remain a problem in perpetuity, and in fact will be what likely eventually causes the collapse (or complete overhaul) of Obamacare.

The New York Post is currently running a story citing important industry sources who are predicting catastrophic results because of this giant hole in the Obamacare program.

New York has a very unique situation in the healthcare world. The cost of healthcare there will actually go down thanks to Obamacare, at least in the first year. While this may sound like a small victory for Obamacare… it isn’t. The problem is that New York destroyed its own healthcare market back in the early 1990s when Governor Mario Cuomo signed insurance-industry reforms into law. “The state’s “pure community rating” system requires insurance companies to offer policies at the same price, regardless of the purchaser’s age, gender or health. ‘This is what destroyed the New York individual market,’ where costs are currently among the highest in the nation.” 

New York is proof positive of other problems being created by the Obamacare scam. In an effort to legislate equality, it will unfairly drive up the costs of health insurance on those who do not need it. Which is why in the coming months and years we will see an epidemic of healthy Americans dropping out of the healthcare scheme.

Some of the experts cited in the New York Post piece discuss what is known as “the death spiral” in insurance circles: “Merrill Matthews, a resident scholar at the Institute for Policy Innovation, predicted a ‘death spiral’ in which the rates rise over the next several years, leading healthy people to drop their coverage while ‘very sick’ people ‘stay in until the very last drop,’ forcing rates up even more… The death spiral is well known in health insurance,’ he said.”

The problem is that the penalty to not get involved in the system will always be cheaper than the cost of attaining insurance coverage. So for young and healthy professionals in their mid-20s, there is just no reason to get involved.

youngfolksObamacare is a ticking time bomb that built in its own destruction.

By unfairly driving up the cost of insurance on the young and healthy, the government is giving them a perverse incentive to not take part in the system. If the young and healthy do not take part – then the system becomes untenable and must either collapse or be overhauled. Here is the dirty little secret that the Democrats and the Obama administration won’t tell you. They did it on purpose. They don’t care in the least about the survival of Obamacare – which is why they keep delaying things and giving exemptions away. The point isn’t Obamacare. The point is to create a precedent that says, “Socialized medicine is normal in America.” When Obamacare collapses it will be a simple thing to fix… they’ll just turn the system into a single-payer system. Which will force everyone to get involved… not matter what. There won’t be any opting out then.

Obamacare is a red-herring. It’s simply a ruse to set up the next more powerful socialized medicine system.

The views expressed in this opinion article are solely those of their author and are not necessarily either shared or endorsed by EagleRising.com


About the author

Onan Coca

Onan is the Editor-in-Chief at Liberty Alliance media group. He's also the managing editor at Eaglerising.com, Constitution.com and the managing partner at iPatriot.com. You can read more of his writing at Eagle Rising.
Onan is a graduate of Liberty University (2003) and earned his M.Ed. at Western Governors University in 2012. Onan lives in Atlanta with his wife and their three wonderful children.

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