Obamacare Is an Unstable Economic Model

Long-time Obamacare advocate and Aetna chief executive Mark Bertolini created a political earthquake when he announced his company will drastically reduce its individual public exchange participation next year. Similar announcements by United Healthcare, Humana and even some Blues plans show that Obamacare is failing.

Those who designed this disastrous government intervention into the marketplace now want more disastrous government intervention. Their solution is more taxpayer money for subsidies to individuals and insurance companies and a "public option" government health plan.

That will not cure the structural problems with this unstable economic model that has:

· Too few enrollees, half as many as the Congressional Budget Office projected;

· A poor mix of enrollees, too many in poor health and too few who are healthy;

· And big premium increases, expected to average 23 percent in 2017, with some 58 percent or higher.

Among many other problems, the law allowed people and other companies to game the system and undermined the “insurance” model by requiring insurers to misprice risk — charging older, sicker people less and younger, healthier people as much as 75 percent more. Young people balked.

The Obama administration has only itself to blame for this mess — jamming the bill through Congress and ignoring warnings of these predictably disastrous results.

The next president should avoid this error. He or she should instead solicit sound ideas from both parties to make sure that people getting coverage now are protected, that those not buying or obtaining coverage have greater incentives to participate, and that the program is financially sustainable.

There are areas of potential compromise. Republicans, for example, have proposed reconfiguring the A.C.A. tax credits so they are paid directly to consumers to choose the plans they prefer; giving insurers latitude to design products people actually want to buy; returning more regulatory authority to the states to, among other things, relax counterproductive age rating bands; and replacing the highly unpopular individual mandate with “continuous coverage protection.”

Above all, the next president should not imagine that more government and more spending will solve problems that government intrusion created.

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