How Senator Rubio And The Republicans In Congress Rigged Your Healthcare Premiums To Go Up

"RISK CORRIDOR": THE REAL REASON OBAMA-CARE PREMIUMS ARE GOING UP IN 2017 -- THAT NO ONE IS TELLING YOU ABOUT

Hot off Wednesday's Thom Hartmann Show:

This is why the insurance companies participating in the Affordable Care Act are raising their premiums next year. As we know, the ACA ended the practice of denying coverage to people with previous conditions (which was causing people who were very ill to go without health care, and others to die). Even though the insurance companies would profit in long-term from overall increased number of enrollees, they screamed because of the short-term losses due to mandatory coverage of people who were already chronically ill. This period of short-term loss due to the addition of high-risk enrollees was dubbed "the risk corridor."

So to sweeten the deal, Obama then added extra subsidies for any losses incurred in the risk corridor. (Poor insurance companies! After all, CEO Helmsley must not be allowed to lose 1 cent of the one billion dollars+ he takes yearly in personal income from United Health Care.) The risk corridor subsidies were of course dependent on Congress passing budget bills that provided the funds for them.

This year, Senator Marco Rubio stripped out funds for the risk corridor subsidies, not as part of a budget bill (which is the honest way to do it), but as a rider to an unrelated bill, which Obama was compelled to sign, for whatever reasons pertinent to the purposes of the actual bill. As a result, the strip-out, and who did it, never got covered in the news. (Which is just how the Republicans wanted it.) And, as a result, the insurance companies will not get the subsidies that provide their short-term profits next year. Instead of "manning up," as the Conservatives like to say, and taking the losses next year in stride (which is what corporations used to do, and found acceptable as part of doing business, when we baby-boomers were kids), and disregarding that these losses will eventually be made up by long-term increased enrollments, the insurance companies are raising their premiums. A lot. Who knows... They may even end up making more money than they would have with the government subsidies.

Meanwhile, the enrollees are screaming bloody murder, as they should, and getting massively ripped off so Helmsley can buy another villa ala vineyard on the South Italy coast. Or whatever he and his CEO cronies do with all that money. And because MSmedia is owned and run by essentially the same people who own and run the insurance companies, and is therefore keeping its collective mouth shut, Republicans get to scream some more that "Obama-care doesn't work!" without revealing the real reason why, and that they're the ones responsible for it. Conveniently during the election.

This is how the Republicans do it. Remember this. Remember the name Marco Rubio and Republicans when your premiums go up. This is why we need single-payer health insurance (Medicare for All). Health care cannot work as long as it's conducted as a for-profit enterprise. And as it is essential to life, it should not be for profit, any more than water, or fire departments should be for profit. I'm not saying we shouldn't all pay for these services, nor that people should not make a decent living from helping to provide them. I'm saying that particular individuals should not be allowed to take ridiculous profits from doing work that is necessary to human beings' basic survival. Certainly people who simply shuffle the money around for these services, or coordinate the processes involved, should not be taking huge profits, adding to everyone's costs. Given that people die without them, that is extortion, and abuse of power. (We actually used to understand these principles in America. These things went without saying.)

Yeah. Obama-care: The only health care solution Republicans would even marginally accept. A system modeled after Republican plans (specifically, as I recall, Mitt Romney's). A system that doesn't work, because the Republicans won't allow it to work... Nice.

Health Insurers Have Figured Out How To Play The New System

Question: have the insurers pocketed the significant profits from the millions of low risk young people who previously were not required to have insurance?

It must have been a nice percentage of their profits. I think they have carefully segregated that large increase in low risk revenue from the higher risk people they can punish for their illnesses. Insurance is supposed to use economies of scale to spread risk, but I think insurers are instead carefully segregating risks to maximize premiums where possible.

When insurers selectively refuse to spread the risk for the benefit of their policyholders it is a fundamental violation of the whole idea of insurance.

I am in a new captive category: individuals who are no longer welcome in the insurance companies’ economies of scale for the “crime" of being an individual and not an employee of a large company. It’s the same old category from before. It appears the insurers have figured out how to sort the insured back into the ghettos which maximize their profits and minimize their expenses.

Wendell Potter, the sharpest observer we have on health insurance issues, has this to say.

Vox has published an interesting conversation about the sudden "problems" with Obamacare.

I think we’ve turned back toward the vicious cycle we saw previously, where the health insurers were motivated to exclude all the unlucky people who actually needed healthcare.

The insurance companies' new insurance pools where premiums are still affordable begin to look like exclusive clubs. The people who are welcomed in enjoy the lower premiums that they qualify for as healthy people and they are encouraged to approve the exclusion of people who are sicker than they are because they benefit from that exclusion.

This is a near perfect example of a vicious cycle, a competitive pursuit of inhumane practices. A more virtuous approach would be to put all Americans into one single risk pool: we are all human beings and all Americans.

There must have been an enormous Obamacare windfall to the insurance companies from the millions of premium-paying low risk young people who suddenly were forced to buy insurance policies. What happened to that windfall? If that revenue was consumed entirely by the increase in healthcare needed by the less healthy who were now insured, how much are the large pools of employee insurance plans being insulated from the increase? It's a perfect example of safety in numbers. Large groups protect their members, but they also select their members. What about the unfortunate people who are not invited in? Working people tend to be healthier than people who are not working, but less healthy people find it harder to stay employed, so these employee plans self segregate, insulating themselves from the ills of "other people."

How are we supposed to respond to this as human beings? If the previously uninsured were suddenly able to get needed care, why are we blaming the system which made the care possible? Obamacare's innovation was pretty simple: it accepted everybody, sick or well, employed or unemployed, as human beings. More than that: it required us to step up to some basic responsibility toward ourselves and our fellow citizens. Why do so many Americans reject this?

An analogy: a person is drowning and crying for help and we jump in to save them. Afterwards when we notice we are cold and wet are we angry about that? Do we blame the person who was drowning? Or do we simply acknowledge that this discomfort is the price we sometimes pay for being and behaving like a human being? The anger over the rise in premiums is like blaming the person who otherwise would have drowned, suggesting we would have been better off if we hadn’t heard their cries for help.

A fairer and more humane way of looking at this is to recognize we are all in the water. We are all human and mortal and prone to disease and catastrophe. Do we want to live in a society where disaster sorts us out as undesirables, leaving us alone and without help? Single payer would be a more rational solution. It would save us from that heartless and selfish part of us that would rather ignore the people in trouble, or that greedy part of us that would actually try to profit from their misery.