Huge ACA Rate Hikes in 100
Words or Less

ACA permits people to sign up even if they are already sick. Real insurance cannot work that way.

Imagine an Accountable Fire Insurance Act that required insurers to sell you fire insurance after your home had burned. Homeowner insurance rates would skyrocket. Anyone who carefully read the ACA would see that coming.

The big insurers knew this would happen but played along in the beginning to avoid attracting political fire.

When 75% of Americans get a taxpayer subsidy under ACA, it isn’t really insurance but more of an income redistribution mechanism…for better for worse.

There it is, 97 words.

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2 replies »

  1. So in the absence of the ACA, what do you do about low income healthy people who can’t afford decent health insurance even if they could easily pass underwriting? Age-based tax credits may work for some of the younger folks but are unlikely to be sufficient to take care of the middle age and older people especially if they need family coverage. The unhealthy and already sick would need high risk pools in an underwriting world with their premium capped at a reasonable percentage of income, probably 10% or so, but those would be expensive to subsidize and haven’t garnered much political support in the past.

  2. We keep calling it “insurance” when a major component of it is simply intrinsically inefficient 3rd party intermediated pre-payment.

    “AHIPcare.” There, ONE word.