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Obamacare’s Economic Assumptions Collapse

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By Andy Puzder
August 29, 2016

Economic reality is making it increasingly obvious that we are in the midst of Obamacare’s long anticipated death spiral. Most recently, Aetna joinedUnitedHealthcare and Humana as the third of the “big five” insurance firms to announce major cuts to its Obamacare exchange business.

For insurers, it’s simple math: Premiums collected must exceed claims paid. If too few healthy, low risk individuals enroll to offset the costs of insuring unhealthy, high risk individuals, the math doesn’t work. This imbalance forces insurers to raise premiums on the low risk individuals who do enroll to cover the costs of insuring high risk individuals. The rising premiums cause even more healthy individuals to drop coverage – resulting in what has been called a death spiral.

https://www.realclearpolitics.com/articles/2016/08/29/obamacares_economic_assumptions_collapse_131637.html