health-care

Unaffordable Care Act

The defenders of the Affordable Care Act are running out of excuses for the dismal performance of its health care exchanges. It is now old news that many uninsured individuals are unable, even with sizeable subsidies, to purchase health care coverage from private health care providers. Average anticipated premium increases are running at 25 percent; major insurers like Aetna, UnitedHealth, and Humana have either pulled out of the program entirely or cut back their operations.

The defenders of the ACA want to double-down on the current system by introducing a “public option” that was excluded from the original legislation. Is there any reason to think that a new and untested government provider will be able to succeed where the companies have failed? The few surviving private firms will be competing on an uneven playing field against coddled government entities. There is a sober lesson to learn from this sorry situation. None of the ACA’s shortfalls should have been a surprise to people who understand how insurance markets operate. The basic proposition remains that market liberalization always beats increased regulation. However, it will be hard to reverse course when the strongest proponents of the given program ignore its manifest structural deficits.

The rise of the public option would mean virtually all private insurers exit the field. A single-payer system is the more likely result.

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