Sunday, April 26, 2015

California's Health Exchange Death Spiraling?

There has been concern for some time that Obamacare was going to death spiral, because young people, who overwhelmingly votede in this fraud, were not n=buying into the very expensive health insurance plans, leaving older and sicker people to do so.  The consequence is plans that are not self-sustaining.  California's plan looks like it is starting to swirl.  From the April 22, 2015 Orange Couty Register:
After two previous extensions, the open enrollment period for Covered California ends April 30. That deadline just might prove to be the tipping point for the state’s two-year-old health insurance exchange.

That’s because this is the year Covered California is supposed to become completely self-sustaining.
Indeed, there’s no more money coming from Washington after the state exhausts the $1.1 billion it received from the federal government to get the Obamacare exchange up and running. And state law prohibits Sacramento from spending any money to keep the exchange afloat.

That presents an existential crisis for Covered California, which is facing a nearly $80 budget deficit for its 2015-16 fiscal year. Although the exchange is setting aside $200 million to cover its near-term deficit, Covered California Executive Director Peter Lee acknowledged in December that there are questions about the “long-term sustainability of the organization.”

Mr. Lee’s disquieting assessment actually jibed with a 2013 report by the state auditor, which stated that, until the state’s health insurance exchange actually started enrolling Californians in health plans, its “future solvency” was ”uncertain.” Thus, Covered California was listed as a “high-risk” issue for the state.

The state auditor’s warning appeared prescient as of Feb. 15, which was supposed to be the close of open enrollment for 2015: Covered California had fallen 300,000 enrollees short of the goal set by Mr. Lee and the agency’s board of directors.
I can't claim to be surprised.  A scheme originally intended to enrich big insurers, while helping liberals feel morally superior is going to splatter.

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