Laszewski: Death Spiral Is on Its Way

On the expected increase in rates:

If the health plans do issue double digit rate increases for 2015, ObamaCare is finished…

Simply, health insurance plans that cost middle-class individuals and families 10% of their after-tax income and have average Silver Plan deductibles of more than $2,500 a month are not attractive and people won’t buy them any more enthusiastically next fall than they already have…

One thing that could save ObamaCare:

Give carriers the ability to swap current benefit mandates (that were set by regulation not statute) for lower premiums and deductibles and be completely transparent in what those trade-offs are while still complying with the underlying statutory requirement that the plans must be worth at least 60% of total health care costs. The administration has the power to do this within the scope of the law. (More)

Comments (15)

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  1. Buddy says:

    “…people won’t buy them any more enthusiastically next fall than they already have…”

    This is if they buy them. People have signed up for the coverage on the marketplace, but they haven’t paid for them yet. Once they realizes the extent of the prices, more will fall off of ObamaCare

  2. Matt M says:

    We were told that this was going to happen sooner than later, but we ignored the warning calls. I don’t think that Obamacare will change much before next year’s enrollment period, unless they perceive that without a dramatic change they will be handed a humiliating defeat in November.

    • Thomas says:

      If individuals don’t maintain their coverage, next year could likely be worse than this year. It would only be more costly due to people dropping coverage, and the rest of potential enrollees to lose confidence in the program.

  3. Blake R says:

    It is decision time for Democrats, either to remove the “affordable” portion of their signature law, or accept that the reform was a total disaster. We are on the verge of the collapse of the healthcare industry. If something is not done soon, we will probably end up without healthcare at all. The rates will increase to the discontent of many. And while Americans pay more, satisfaction decrease. It is a crucial test for Obamacare, one that will most certainly fail. It is now or never for ACA, let’s see how the administration will respond.

  4. Perry says:

    Shhhh, don’t tell them how to save it!

  5. Erik says:

    The insurance companies do not have the underlined claim experience to justify an increase at this point. Maybe 6 months from now but not now.

    Yet people will bark like dogs when certain whistles are blown.

  6. John R. Graham says:

    It sounds like he is promoting “copper” plans, like AHIP and a handful of Democratic Senators. Pay more, get less? It doesn’t sound like a winner to me.