Will Obamacare Self Destruct Through Market Forces?

There have been many critics who have railed against the Affordable Healthcare Act, and it appears that those who say the "for profit" business model is unsustainable may be on the verge of being proven correct.

The recent withdrawal of Aetna, United Healthcare, and Humana from the medical coverage exchange system may actually usher an established provider move toward de facto single-payer health insurance. This is especially true in a copycat economy, as the few who remain in the exchanges could soon follow suit. And, this may occur as soon as 2018 when the law is set to go into full force.

Of course, single-payer is techno-terminology for a monopolistic healthcare system that only provides one payment system to the healthcare industry for services rendered. And, the industry does not like it, nor the stockholders. The structure of the current healthcare system we affectionately call Obamacare is now revealing the predicted flaws regarding no mandated participation by the insurance providers versus the mandate that all U.S. citizens will purchase health insurance coverage as directed by the United States Department of Justice and Internal Revenue Service.

The decision by the three major healthcare providers to exit the exchange and the possibility that the others are right behind suggests that the two primary components of the law are headed for a collision. Those are a marketplace with little to no competition meeting a consumer base that is "mandated" by the federal government to purchase healthcare insurance unless they can qualify for government assistance. Those qualified for public assistance care must do so as well. And, even when the government pro rates the premiums based on the income level of the mandated participants, that does not mean the allowed "vouchers" are enough to cover the difference based on the forced-participant income level. The voucher amount is just an arbitrary number assigned by a government that may not be as benevolent as they claim.

The fear in this predicament is that it clearly lays the groundwork for a monopoly system that can serve as an intermediate payment system enforcing the laws established by Congress and supported by the Supreme Court that the mandate is actually constitutional because it works like a tax, even though penalties are assessed by the Internal Revenue Service as though it were a fine. There are clear financial penalties for not having health insurance. When this situation is coupled with the problem that there is only one provider in a region, the customer is completely at the mercy of the insurance company and the corporate government as well. And it gets worse.

A study by Avalere Health has revealed that in the 2017 fiscal year, which is now beginning open program enrollment, there are seven states that will have one sole healthcare provider. Those states are Alaska, Alabama, Kansas, North Carolina, Oklahoma, South Carolina, and Wyoming. Premiums will largely be "take it or leave it" for the forced consumer in these states. But, this could also be the tip of the iceberg if the other major players in the healthcare industry experience the same balance sheet problems as the ones who have already indicated they will leave the market. The domino effect could have the impact of forcing the government into the single payer system whether some politicians want it or not.

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