Death Spiral

The term “death spiral” has a particular meaning in health insurance. Back in the days before Obamacare, policies didn’t cover pre-existing conditions. That meant you started with a pool of healthy people. Eventually some get sick so the costs go up. The healthy ones go elsewhere so only the unhealthy remain. Costs begin to rise rapidly. That’s a death spiral. I was aware of it from my experience in the health insurance industry but it was a lot more painful when it happened to me.
We are starting to see a death spiral in Obamacare. Those that were sick gladly signed up while many healthy, younger people decided it was cheaper to pay the fine. Insurers are bleeding red ink and premiums are skyrocketing. Aetna just announced it is pulling out of a number of states.
The future seems pretty clear. The individual health insurance market will dry up and many employers throw up their hands and quit covering employees. Millions will be left in the lurch. At that point there is no alternative but to go with a single payer system.
Sounds great, doesn’t it? Everyone gets affordable health care. There is just one problem. This will explode the deficit and the government will have to cut costs. Reimbursements to doctors and hospitals will be slashed, forcing many out of the system. New restrictions on coverage will be issued. We will then have two health care systems; a high quality private one for the rich and a low quality public one for everyone else. I’ve seen this happen throughout the world.
Obamacare was designed for people like me. I have paid more in out of pocket medical expenses than I paid for my house. I am less concerned about the economic hit I’ve taken than facing the risk of being denied access to quality medical care in the future. Better to be poor than to be dead.
​