CBS: Obamacare’s Financial Model is In Danger of Collapsing

Structurally, the foundation of Obamacare was always built on sand and the website woes are actually exacerbating the problem.


The disastrous rollout of may have another serious problem: A CBS News analysis shows that in many of the 15 state-based health insurance exchanges more people are enrolling in Medicaid rather than buying private health insurance. And if that trend continues, there’s concern there won’t be enough healthy people buying health insurance for the system to work…The newly insured in some of those states are overwhelmingly low-income people signing up for Medicaid at no cost to them. Matt Salo, executive director of the National Association of Medicaid Directors, said, “We’re seeing a huge spike in terms of Medicaid enrollments.” He says the numbers have surprised him and state officials. CBS News has confirmed that in Washington, of the more than 35,000 people newly enrolled, 87 percent signed up for Medicaid. In Kentucky, out of 26,000 new enrollments, 82 percent are in Medicaid. And in New York, of 37,000 enrollments, Medicaid accounts for 64 percent…Gail Wilensky, a former Medicaid director, said the numbers are causing concern in the insurance industry, which needs healthy adults to buy private insurance in large numbers for the system to work. “Either the private insurance enrollments come up somewhere around the expected amount or there’s going to be a problem. … You need a volume and you need a mix of people that are healthy as well as high users in private insurance, in order to have it be sustainable,” she said.

This makes perfect sense if you think about it. After all, who’s going to spend all day working on a non-functional website to get overpriced insurance other than people who are already sick and either can’t get insurance or are paying an arm and a leg for it?

People who already have insurance aren’t going to be that interested in signing up and those that may be are hearing nothing but bad news about Obamacare. This COULD create a death spiral where sick people sign up, healthy people don’t, and costs spike so much that no one other than the least desirable customers ever use the system.

That’s the direction we’re headed on and if so, good, because it will make Obamacare non-viable. That might be embarrassing for Obama and the Democrats, but the sooner Obamacare fails and is replaced, the better off Americans will be.

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