Breaking The Law Again

Stanley Feld M.D, FACP,MACE

The mainstream media is biased. It usually supports the Obama administration blindly. Many intelligent liberals believe everything in the New York Times and what Paul Krugman says as if both were source material.

The New York Times and the TV networks ignored the initial press release by United Healthcare potentially withdrawing from the 38 federal health insurance exchanges in 2017. Fox news was the only cable network that covered the story.

The potential withdrawal is a very big deal. It is an indication that Obamacare is failing. Paul Krugman continually declares Obamacare is a success.

In order to induce United Healthcare’s participation in Obamacare’s health insurance exchanges the Obama administration guaranteed the healthcare insurance industry stop loss protection.

Then the Obama administration only paid 12.6% of the $2.8 billion dollars due the healthcare insurance industry under the stop loss agreement.

“Health insurance stocks took a nasty tumble last week, and maybe the markets are realizing that ObamaCare isn’t performing as well as the political class pretends.”

“The immediate cause of the selloff was UnitedHealth Group ’s shock $425 million downgrade to its earnings forecast for 2015, almost entirely driven by losses on the Affordable Care Act exchanges. “

United Healthcare did not sign up to sell insurance in the federal health insurance exchanges originally because it was afraid it would suffer large losses. It signed up only after President Obama activated the stop loss provision embedded in the reinsurance program of Obamacare legislation.

The United Healthcare announcement comes only a few weeks after 12 of 23 smaller, nonprofit insurance cooperatives failed and stopped selling insurance to Obamacare subscribers. These co-ops received billions of dollars in federal loans that will never be paid back to the nations taxpayers.

These cooperatives were given federal loans by the Obama administration in order to be competitive with the big insurance companies.

The federal health insurance exchanges attracted people with pre-existing illness. President Obama’s legacy law guarantees people with pre-existing illness availability to healthcare insurance at the same price as people without pre-existing illness.

People with pre-existing illnesses cost more than people without existing illness.

The resultant premiums are high and the deductibles are higher. Consumers who qualify for subsidies do not receive subsidies for the $6000 deductibles.

Young healthy consumers are not buying insurance from the federal health exchanges. They have figured out that they are not getting insurance coverage until they spend the $6,000 deductible.

These young consumers did not earn enough money to afford the high premiums and higher deductibles. The poor cannot afford the deductibles either. No one at low risk is signing up for Obamacare.

In order to keep Obamacare going the Obama administration needs the healthcare insurance industry. The healthcare insurance industry performs all the administrative services for the government.

United Healthcare is not interested in selling insurance on the health insurance exchanges because the government has not been trustworthy and has not paid them what was promised.

The stop loss insurance should not have been promised to the healthcare insurance industry in the first place. However, President Obama jumped in and essentially gave the healthcare insurance industry the ability to sell insurance at no risk.

United healthcare did not sign up for 2013 but jumped into the Health Insurance Exchanges in 2015 because of the government’s stop loss guarantee.

Obamacare now owes the healthcare insurance industry 2.5 billion dollars. The budget contained an amendment that does not permit the government to reimburse more than it collected in premiums. Both houses of congress and President Obama signed the amendment into law.

At present President Obama has pledged to pay out the risk corridors payments despite the massive shortfall in the near term.

All President Obama has to do is ignore the law he signed in order pay the $2.5 billion dollars illegally. If he pays United Healthcare the money due it might continue to participate in Obamacare’s federal healthcare insurance exchanges.

HHS “will explore other sources of funding for risk corridors payments, subject to the availability of appropriations. This includes working with Congress on the necessary funding for outstanding risk corridors payments.”

“The risk corridors program, one of three health insurance risk programs established by the Obamacare, essentially helps mitigate insurers’ losses in the early years of the new insurance marketplaces. The risk corridors program expires after 2016.”

United Healthcare is in business to maximize profits and not to lose money on good deeds.

Obamacare’s business model is a terrible model destined to lose trillions of taxpayers’ dollars. United is not interested in losing billions of dollars doing the government a favor.

Paul Krugman continues to tell his readers Obamacare is working wonderfully despite fact that it is failing. Major media networks have hardly described the problem.

It will be worse if we go to a single party payer system. Socialism has never worked.

It should be all about consumer driven healthcare and market forces driving healthcare with consumers being responsible for their health and healthcare dollars.

Government only function should be to create simple regulations that none of the stakeholders should abuse. The government must execute the enforcement of these simple regulations.

My ideal medical savings account will work. It will permit universal healthcare coverage and eliminate the development of the massive, inefficient and dysfunctional healthcare system called Obamacare.

Obamacare is unsustainable. It is being proven every day even if it is ignored by the traditional media, President Obama and his administration and Paul Krugman.

The opinions expressed in the blog “Repairing The Healthcare System” are, mine and mine alone.

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