It was inevitable: health insurers setting artificially low premiums for customers in order to make Obamacare an easier pill to swallow would not end up being financially viable for insurance companies. The law mandates that prices for older, sicker patients are equitable with premiums for the young and healthy. So unless the younger generation enrolled in droves, this mandate would prove a financial disaster. And this worst-case scenario is exactly what’s happening.
So the White House inserted a clause into the Affordable Care Act which made the law more palatable for health care insurers: a taxpayer-funded bailout option to protect the companies from losses – losses directly caused by Obamacare – should it be necessary. And we know now that it’s going to be necessary.
The problem is – for the bailout to work, it’s going to have be much, much bigger. It’s that bad.
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