Obamacare Squeezing Private Insurers by Design

“With its coverage mandates, guaranteed issue and community rating edicts, and price controls, the ACA threatens the overall sustainability of private insurance. Our own state-based experience already demonstrated that individual health insurance markets deteriorated after guaranteed issue and community rating requirements, like those in the ACA, were introduced. Milliman’s March 2012 study of 8 states showed that insurance companies chose to stop selling individual insurance, which resulted in a decrease in competition. As individual insurance enrollment decreased, premium rates increased, sometimes dramatically. The CBO has already estimated that the costs for health insurance in the individual market will rise 27 to 30 percent in 2016 over current levels. Many believe most private insurance plans will be driven out of business and further predict that many employers will stop offering health insurance and accept the modest penalties, shifting more individuals toward subsidized insurance, ultimately increasing the costs of exchange subsidies for private insurance. The self-inflicted destruction of private health insurance will be put forth as the rationale for public single payer as the only remaining solution to the crisis newly created by the President’s reforms.”