Wednesday, June 07, 2017

The next ObamaCare crash now has a free market solution in place

By David Adams

The most obviously horrible thing about ObamaCare is its destruction of what health insurance should be. Focusing on that failing has given me an idea with which we can really start reversing the damage.

By encouraging health insurance companies to improperly price risk and effectively turning them into government agencies, ObamaCare obliterates a very effective driver in maintaining a healthy society, which health insurance used to be. By creating an environment in which health insurers are heavily incentivized to get used to living off federal subsidies and reaping benefits from rules which allow them to -- for example -- make money insuring men, boys and post-menopausal women for maternity benefits they can't possibly use, ObamaCare pits insurers against consumers rather than leaving them the freedom to collaborate in lowering the need for healthcare spending.

The individual and small group markets have suffered significant cost increases under ObamaCare. The individual market is fully dependent on repeal of the law to stand a chance of recovering. Failure in the small group health insurance market is coming more slowly, but it is coming. Here, though, we have a chance for recovery by pulling together two different tools to reward financially people who stay healthy while protecting them more efficiently when they can't.

The creators of ObamaCare largely overlooked self-funded health plans which allow small groups to reap significant savings when they avoid large medical bills. The overregulation parade also missed stop loss plans, which, when attached to a self-funded one to cover high expenses, protect consumers like insurance is supposed to. Combining these two elements properly and finding health insurers willing to make refunds of unused premium dollars in good years -- keep healthcare costs meaningfully lower with proper pricing all the time. That is, dramatically lower in good years and predictable even in the worst of times.

I can show you how to do this for your employer-based group. Call me anytime at 537-5372 in area code 859.

David Adams is president of Wildcat Asset Management, Inc.