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Obamacare’s Economic Assumptions Collapse


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.

2 thoughts on “Obamacare’s Economic Assumptions Collapse

  1. This was the plan all along – to collapse the private insurance system.

    Step 2 is introduction of a ‘public option’ in the exchanges, which will significantly undercut premiums offered by private companies. And they will be run with the integrity and mathematical acuity of public pension funds.

    Step 3 will be cadillac taxes – and hence employers dropping workplace insurance instead of paying out 40% excise fee.

    Step 4 will be significant shrinkage of the private insurance market and they are unable to compete on exchanges and keep losing business from employers.

    Step 5 – Government care.

  2. Vote out all members of congress who supported Obamacare

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