Thursday, July 20, 2017

Repealing Obamacare: A Gordian Knot

The short version is that there is an air-bubble in the siphon and nothing is going to happen.

The longer version is that individuals used to work for the same firm for most of their career or they carried their healthcare policy with them.

They over-paid for healthcare insurance when they were young and healthy.  Or, more likely, their upward wage growth was stunted by the premiums paid to support older, unhealthier employees.

Picture a man who was 45-to-65 when Obamacare vaporized the plan he was in.  Five years later he is having twinges.  Maybe he is pre-diabetic.  Maybe he needs new knees.  Perhaps he has a family history of heart disease.

The fact that Obamacare vaporized his old plan was partially offset by the fact that insurance companies were not allowed to take existing "preconditions" into account when setting rates.

That stipulation, that insurance companies cannot consider preconditions when setting rates, is one of the prime drivers of the Obamacare death spiral.

The issue of preconditions is also what is locking up the repeal or replacement of Obamacare by the Republicans.  It is not possible to roll back the calendar.  The insurance plans those baby-boomers used to pay into are gone, atomized and blown away.  So are the jobs.

The politicians painted themselves into a corner.  That vast tsunami of baby boomers vote!  Even stepping away from the healthcare insurance rodeo, the entire paradigm of working for one employer for 40 years is gone.  For that matter, the paradigm of working is gone for many people.  Automation continues to eliminate jobs.

So there is Billy Babyboomer.  He toiled through his twenties and thirties and forties.  And just as he is about to be on the receiving end of the system:  BAM!  TFB.

The same trajectory as Social Security and Pensions.  Healthcare just hit a little sooner.  It is not politics.  It is math.

No comments:

Post a Comment

Readers who are willing to comment make this a better blog. Civil dialog is a valuable thing.