Risk

We’ve now got our own version of the Big Lie: Obama and his minions are claiming that insurance premiums will go down under ObamaCare. Let’s look at the truth of this.

First, health insurance is a bet made by an insurance company that something will not happen. The bet is made with you, the subscriber. You are betting that something will happen; the insurance company that it will not. That something? You using health care whose costs are covered under the policy.

Insurance is, therefore, at its core, a risk transaction. The insurance company accepts the risk that you will have health care expenses. You pay them to accept that risk.

If you pay for insurance but never use health care services, that’s the best outcome for the insurance company: they just keep what you give them in premiums. If you do use covered health care services, the insurance company pays out. The more you use those services, the more they pay out, the lower is their profit. At some point, without some profit, the insurance company goes out of business and new ones won’t enter the market.

So, let’s look at the health care “reform” now being subject to the sturm und drang in Congress. The bill that Democrats now claim has enough votes to pass will then be signed into law by Obama. It will do several things to alter the risks faced by health insurers:

  • It will remove lifetime caps on payouts
  • It will not allow denying coverage due to pre-existing illness
  • It will not allow canceling policies if the insured become ill
  • New insurance plans will cover the full cost of some preventive care, and exempt those costs from deductible payments.

These provisions may be good in and of themselves; it’s hard to argue against protecting someone who has paid his policy in good faith only to be denied coverage once he gets certain kinds of illnesses. But each of these provisions will cost health insurance companies more money. And, contra what Obama and his zombies in Congress tell you, health insurance companies don’t make enough profit to absorb these costs for long.

Let’s take this slowly, so that even liberal Democrats can understand: Insurance. Premiums. Will. Go. Up.

Yes, yes, the insurance companies will have to trim fraud, waste, and abuse. But now, with Big Brother watching every move, and requiring more and more paperwork to satisfy the 150+ new government entities the bill will create, it is guaranteed that most people won’t see their premium go down.

Except those on welfare, of course. Which, under Obama, will soon be a majority of what at one time had been a proud and free people.

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