Diana Furchtgott-Roth, former chief economist of the US Department of Labor, is an unpaid adviser to Donald Trump. She has a blog that gave us Insurance Companies Wise Up to Obamacare
“In a well-functioning insurance market, such as for automobile accidents, insurance carriers craft countless plans to meet exactly the needs of millions of different individuals. Typically, only catastrophic unexpected events are covered, not the predictable oil changes.”Let’s stop right here. #1 – one’s health is not the same things as one’s car. And this bit about well-functioning ignores the monopolization of the health insurance market. She continues:
Insurance companies are making losses because fewer Americans are signing up for Obamacare than were predicted, and these Americans are sicker than average. Premiums rose in some markets by 20 percent in 2016, leading to more healthy people dropping out of plans or not enrolling, accelerating the financial imbalance. Premiums are expected to rise by a similar amount—or more—in 2017.Premiums may be going up but part of this is due to the monopolization of health insurance which likely is driving up profits as noted by Brad and Michael DeLong:
As Berkeley economics professor Aaron Edlin has pointed out, consumer abstention is the ultimate competitor. Companies cannot purchase or contrive a solution to consumers who say, “I’m just not going to buy this.” But the ACA requires individuals to purchase health insurance, thus creating a vertical demand curve for potential monopolists. Under these conditions, profits – and consumer abuse – can be maximized through collusion. It is not surprising, then, that in 2015 some of the largest private American health-insurance companies – Anthem, Cigna, Aetna, and Humana – began exploring the possibility of merging. If they could reduce the number of national insurers from five to three, they could then increase their market power and squeeze more profits from consumers.Furchtgott-Roth continues her right wing rants:
Fewer than 13 million people signed up for Obamacare in the 2016 enrollment period, compared with 22 million predicted by the Congressional Budget Office in May 2013.Young, healthy people are not signing up in great numbers for the expensive policies, even with the threat of penalties. Insurance companies and politicians thought that the premiums from these young people, who do not use much health care because they are rarely sick, would be used to pay for the care of the old and the chronically-ill. Rather, young people are either on their parents’ plans, or on employer plans, or going without insurance and paying the penalty.If young people are getting insurance via their jobs, then counting them as not getting insurance is a bit dodgy. I’m no expert on these matters, but I’d trust Kevin Drum over spin from Team Trump.