WASHINGTON – With the Supreme Court currently mulling the
King v. Burwell case against the Affordable Care Act, supporters of Obamacare
have warned that a “death spiral” may result if the court strikes down
subsidies for health insurance purchased through federally established
exchanges.
But the federal health-care takeover law already has caused
a death spiral, according to Dr. Lee Hieb, M.D., past president of the
Association of American Physicians and Surgeons.
It’s just that she speaks of a different kind of death
spiral.
“There’s a death spiral in medicine already because it’s
creating shortages of doctors and hospital closures, and that’s a business
death spiral the medical community’s already starting to be in,” Hieb said.
A traditional “death spiral” occurs when many healthy people
drop health insurance coverage, leaving a risk pool that is smaller and sicker than
before. Insurers are forced to raise premiums to continue paying promised
benefits to their sick customers. But this premium hike causes remaining
healthy customers to drop coverage as well, because they don’t feel it is worth
it to pay sky-high premiums for coverage they rarely, if ever, use.
Once these healthy people leave, insurers must raise
premiums again, causing even more healthy customers to leave. The cycle
continues until only the seriously ill remain in the risk pool, because they
are the only ones with an incentive to pay the enormous premiums.
That already may be evident. According
to a recent article, premiums rose by an average of 41
percent from 2013 to 2014, the latter of which was the first year Obamacare was
in effect. Also, only about 28 percent of Obamacare enrollees are in the
healthy 18-to-34-year-old age group. Analysts had originally estimated that
about 40 percent of enrollees would have to be in that age group so their
premiums could pay for benefits for the elderly and sick.
Hieb, author of “Surviving
the Medical Meltdown: Your Guide to Living Through the Disaster of Obamacare,” is concerned about more than just rising premiums and
smaller, sicker risk pools. Those problems represent a death spiral of medical
insurance, she says. But as a practicing orthopedic surgeon, Hieb worries about
the death spiral of medical providers.
She gave a personal example. She once worked in a part of
Arizona in which 85 percent of her patients were insured through Medicare.
Because Medicare reimburses health-care providers less than private insurance
does, providers did not want to live and work there. Many of them moved away,
and it was tough to convince new providers to come replace the old ones.
“And so it’s a classic business death spiral where there’s
too much work for too few people. No matter what you do, you can’t recruit new
people because it’s too unpleasant a work situation, and so people keep
leaving, and that’s a death spiral,” Hieb said.
But a provider shortage may be more
than just a regional problem in the near future. The Association of American
Medical Colleges has predicted
a nationwide shortage of 50,000 to 90,000 doctors by 2025.
Another facet of the provider death
spiral, according to Hieb, is the closure of hospitals, on
which WND previously reported.
Hieb blames the economic failure of hospitals on the federal government’s
payment cuts to Medicare providers, both under Obamacare and sequestration.
“Hospitals send you a huge bill, but they pay huge dollars
to give you that care, so there’s a real problem,” she said. “And again,
[doctors] are not getting good value for the money that we put into it. I’m not
saying things should cost this much, but they do under this highly regulatory
environment, so we’re being regulated out of business. We’re in a regulatory
death spiral.”
Dr. Jane Orient, executive director of the American
Association of Physicians and Surgeons, agrees with Hieb that a medical death
spiral is already under way.
“Hospitals are closing or being absorbed in megasystems,”
Orient observed. “Doctors are closing independent practices and retiring or
becoming employees. Try to order routine drugs or IV fluids! Huge cost
increases, and they’re often unavailable.”
Ever since Obamacare was passed,
observers have warned of a potential death spiral, defined in the traditional
sense. A June 2014 report revealed that one-half of the death spiral was
already under way: Customers
newly insured under Obamacare showed higher rates of serious health conditions than other customers.
Last October, FoxNews.com reported
that cheap,
short-term private policies were gaining popularity as an alternative to the Obamacare exchanges. The story
noted that a death spiral could result if enough young and healthy people opted
out of Obamacare in favor of those short-term plans.
But ever since the King v. Burwell case appeared on the
national radar, Obamacare supporters have been voicing concerns about a death
spiral, too. Specifically, they believe a death spiral will result if the
Supreme Court strikes down premium subsidies in states that did not set up
their own Obamacare exchanges. In such a scenario, premiums would become
unaffordable for many customers, and the healthy ones would likely flee the
market.
The Obama administration extended subsidies to those getting
coverage from federal exchanges even though the law states that it allows those
subsidies only for those working with state-established exchanges.
In October 2014, the
Obama administration funded a RAND Health study, which found that eliminating the ACA’s subsidies would
cause premiums to rise by nearly 45 percent and enrollment to fall by nearly 70
percent.
A February New
York Times article warned that the Supreme Court, if it
ruled against the Obama administration, would upset the “balance” in the ACA
and send the law into a “tailspin.”
Hieb admits that eliminating subsidies in certain states
would likely accelerate the insurance death spiral, but she believes Obamacare
cannot work anyway.
“Even with all this subsidy stuff going on, young people are
not signing up,” she said. “I’m not sure, even if state exchanges are working,
if it’s a good deal for anybody that’s young.”
Hieb believes insurance companies initially had high hopes
for Obamacare. She thinks they saw the law as a way to get young, healthy
people to buy insurance in droves. However, if that was the case, they are now
disappointed.
“Young people are not stupid enough,” Hieb asserted.
“Individuals could figure out their best economic interest, and what young people
decided was, it wasn’t worth doing it that way. ‘We’ll just go uncovered until
we get sick and we can’t be denied, so we’ll just wait until we have something
bad happen to us, and in the meantime, we’ll pay cash.’ And they’re right.
That’s a better economic model than going through Obamacare if you’re 25 years
old.”
Without young and healthy people, Hieb believes the ACA will
die a natural death. But if the Supreme Court kills the law first by
eliminating subsidies in states without their own exchanges, the country may
suffer less damage, she said.
“I think Obamacare’s going to collapse of its own ponderous
unworkability, but if it collapses of its own ponderousness, it will bring the
system down with it,” Hieb said. “Maybe this is a way of getting it to go away
without bringing the system down.”
Orient, meanwhile, believes part of the medical system must
“melt” away to have any hope of saving it.
“A lot of the system needs to melt down – the 40 percent or
more siphoned off by third-party payers,” Orient said. “It’s not just
Obamacare, but Medicare and Medicaid price controls and mindless bureaucratic
requirements. And of course the government is bankrupt.”
“The question is how to save our people and our country as
the empire inexorably collapses.”
http://www.wnd.com/2015/04/top-doc-obamacare-death-spiral-already-here/
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