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An Early Sign of Obamacare's Impending Collapse?


In March, we reported that the Pre-Existing Condition Insurance Plan (PCIP), a program created to provide coverage to sick Americans who have been uninsured for at least six months, was in serious trouble. Only a fraction of the expected 400,000 people had signed up, but the program was burning through the cash allotted to the program too quickly. The administration capped further enrollments, but even that wasn’t enough to save the program. The New York Times has more:

Payments to health care providers will be capped at Medicare rates, which are substantially less than the commercial insurance rates they have been receiving. The new policy generally prohibits doctors and hospitals from increasing charges to consumers to make up the difference.

Michael T. Keough, the executive director of the North Carolina Health Insurance Risk Pool, said the new policy was one of several steps taken recently by federal officials to control spending.

“They are trying to stanch the hemorrhaging,” Mr. Keough said.

The PCIP is a temporary program, ending on January 1, 2014, at which point all the people in it will be shifted onto the new exchanges the law creates or onto some other kind of insurance.

The PCIP may therefore seem like an inconsequential piece of a gargantuan health care law, but the failures of this small piece go to the heart of the challenges the ACA as a whole will face in coming years. In effect, beginning on January 1, 2014, all insurance plans will be like the PCIP. The Obama administration is doing everything it can to convince young, healthy Americans to buy insurance through the exchanges. Only with their participation can American insurance plans avoid the cash-flow crisis currently driving the PCIP into bankruptcy. Whether enough young people will sign up is anyone’s guess.

[Ball and chain image courtesy of Shutterstock]

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  • Lorenz Gude

    Well I’m seeing estimates of the current cost of US healthcare as high as 17.5% of GDP. Many countries get better health outcomes at 10% of GDP. I read recently that the expensive Swiss system which is insurance based like the US system is running at 11%. Whatever you think of the ACA, it is facing unsustainable costs. From all reports it is a rickety superstructure built atop a ship that is already half underwater. I can criticize the US system from a socialist point of view as socially unjust. I heard a man in the outpatient clinic of a hospital discussing his terminal cancer with a doctor and how it was curable but he had no insurance. Or alternately argue that the US system is an example of massive market failure that empowers predatory institutions to fleece desperate people. For example both I and a close relative use the same CPAP mask to treat sleep apnia. The cost through a Medicare approved provider is $511 with a copay of $50. I just bought 2 from Amazon for $50 a piece and never pay more than $125 on the open market. I think it is a real possibility that the ACA is going to bring the whole corrupt edifice tumbling down.

    • TheCynical1

      That’s intriguing, if apocalyptic: maybe Obamacare will inadvertently blow up the health care system, including itself. Then, something better might rise out of the ashes.

    • ronchris

      “I heard a man in the outpatient clinic of a hospital discussing his
      terminal cancer with a doctor and how it was curable but he had no

      If it was terminal – how could it be curable?

      Also, indigent people do get cancer treatment through Medicare. There are some very expensive and low-probability of success medicines and procedures that are not covered, but if something works, then it is covered.

    • Scott

      This is obvious a lie. It is illegality deny medical care in the United States due to inability today. My cousin work for a hospital in the Houston medical center that treats cancer patients and they have many who don’t have any insurance or ability to pay and they get the exact same treatment as those who have insurance and money. Yes the hospital bills them but they write off the accounts as Uncollectible. There never was or wil be a healthcare crisis. It was simply that some people don’t have health insurance it isn’t the same thing.

  • Scott

    How many people did sign up?

  • DiogenesDespairs

    Why does no one see that Obamacare is designed to create a catastrophic blowup of the health insurance system. That was the idea from the beginning: Load up private insurers with mandates and costs that will make it unaffordable, driving everyone to the taxpayer-subsidized “public option,” i.e. government insurance that had to be dropped from the bill to get it passed and which will be revived as the “answer” to the crisis Obamacare is on track to create.

    This is a law designed to drive the US into socialized medicine, and so far, it is “working as intended.”

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