Obamacare premiums skyrocketing….again. DMV healthcare coming soon.

Supply & DemandThe long lines and wait times are just around the corner for your healthcare. So while many Americans or their employers are paying more for healthcare, we now hear that it’s finally time for the soviet style price caps that inevitably lead to bread lines…wait…I mean long wait times. Same thing.

We all said this was coming. Nobody listened.

I just had this discussion with a co-worker. I had pointed out that I had waited almost six hours at the DMV recently (a personal record) and she said I should have made an appointment because the wait time is much shorter. So, I decided to point out the basic physics of economics that defies her statement. The DMV, in their tortoise race to provide the superficial appearance of better customer service, has slowly driven everyone towards making appointments which on the surface sounds like a reasonable plan. However, because the DMV has a fixed number of resources (price capped), all those with appointments are dealt with first, then non-appointments are dealt with second. Therefore, as the number of appointments increases, the wait times for the non appointments increase, so the non appointments rationally begin making appointments, which increases yet again the time for the non appointments and around and ’round we go until we have what we have now….six hour wait times for non-appointments and two to three month lead times for appointments. This is not a solution, it’s a jack-ass short term ponzi scheme head fake. All they did was move the ball around under the shells.

And it’s coming to a doctor and hospital near you…

CNN via Townhall

Hold onto your wallets … many insurers want to substantially hike rates on Obamacare policies for 2016. Many are proposing double-digit premium increases for individual policies, with some companies looking to boost rates more than 60%, according to a list posted Monday by the federal Centers for Medicare & Medicaid Services. In Florida, for instance, United Healthcare (UNH) wants to raise the rates of plans sold on the Obamacare exchange by an average of 18%. Individual policies available outside the exchange through United Healthcare or through a broker would go up by 31%, on average, with hikes as high as 60% for certain plans in certain locations. In Texas, insurer Scott & White is looking for a 32% increase for exchange-based plans, while Humana (HUM) is asking for an average 30% boost for its exclusive provider organization policies, which generally cover only in-network services. Insurers say they want to hike rates because enrollees are going to the doctor, getting lab work and filling prescriptions more than they had originally anticipated…Blue Cross and Blue Shield of North Carolina cited hospital in-patient care, particularly cancer and heart conditions, emergency room visits and specialty drugs as major contributors to its proposed 26% hike.

But what I think is the most interesting point is to be found here (emphasis mine)…

The story goes on to note that many insurance commissioners will reject the proposed increases — forcing negotiated compromises — and that those consumers receiving taxpayer-funded subsidies won’t shoulder the full freight of the raised costs.  If insurers can’t raise rates commensurate with new operating costs, they’ll look for other ways to maintain their (relatively small, but necessary) profit margins, or might even consider backing out of Obamacare.

The “rejection of proposed increases” are what caps the costs, just like the DMV. What “other ways to maintain their profit margins” means is what always happens when a Government establishes centralized price control systems…rationing, just like how the DMV has to ration its service because its resources are capped.

The economics are so stupid simple, even a Liberal can follow my logic. If the demand for apples goes up, but you can’t raise the price of your apples to limit that demand or pay for picking more apples to meet the higher demand, then all you can do is limit the number of available apples.

And that…my friends…is kindergarten economics. Prepare for the coming healthcare shortages including long wait times, and long lead times for appointments…just like the DMV.



Categories: Government Failures

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