One of the biggest problems with Obamacare is the the inability to determine what next year’s costs are really going to be. From the big insurers’ point of view, they feel that their inability to know who is (and how many who’s are) going to sign on to the program before they list their proposed premiums. From the small (and newly formed coops) insurers’ point of view it has been the changing rules as to who is responsible for the transfer payments from the lower cost insurance pool to the higher ones.

(Initially, the first three years of such payments were to be covered by the Federal Government. AFTER the first premiums were posted, Congress changed the rules making the payments a responsibility of the insurers, not the government. And, Congress also changed how much the newly formed coops would received to set up their new businesses- and instead of an investment, it became a loan.  What a surprise – or cataclysm- for these new entities!)

Now, let’s not get confused. All insurance is basically a scam. (Sorry to tell you the emperor has no clothes.) We are willing to pay premiums so that we won’t be socked with big bills, to ensure our peace of mind. In essence, insurance has the lucky folks (those that don’t need the benefits) subsidizing the unfortunate (those that do need them). Whether that’s rental insurance, homeowner’s, automobile, or health care. Of course, mortgage companies demand that we have homeowner’s insurance- so that they can be paid off in the (unfortunate) circumstance of a major calamity to their property.  (What?  You thought you owned the home?  Sorry to inform you, it’s the bank holding the mortgage.) And, states demand we all carry liability insurance so they if we (unfortunately) hit another’s car- or hurt another soul- those injured parties can be made (theoretically) whole.

Wherein lies the problem with health care. Until now, the penalties for not having health care insurance are too damned low. In 2015, the penalty for not having coverage was 2% of taxable income or $325- the higher of the two. Except, the maximum penalty couldn’t exceed $ 975 or about 1/2 the average cost for a bronze plan for a year (roughly $ 2400 to $ 3000). This year the penalty increases to $ 695 or 2.5% of your income. That’s still not really enough to incentivize folks to sign up for insurance.

It’s also why only about 11.1 million new subscribers have signed up for Obamacare coverage. The number was projected to be twice (24 million) that number by now. Of course, enrollments drop as the subsidies shrink- and middle-income taxpayers don’t get any subsidy at all.

Now, you know that I believe the answer is a single payer solution- one akin to Medicare. Of course, the general GOP position is that concepts destroys private industry. (I do note that if we were to believe the claims of these insurers, they’ve already been destroyed. Which, of course, has as much credence as my ability to fly to the moon, unaided.)

But, increasing the penalties- no different than the penalties that apply to car owners (no insurance, no registration; or in Virginia’s case a $ 500 annual fee (about 1/2 the average insurance cost)- is truly the very best way to ensure everyone gets insurance.

Which means it is much easier to ascertain what risk the insurance companies are handling.  Because when everyone has insurance, the data is accurate.  When only some do, one has to guess whether it’s the old, the young, the sick, the healthy- or those gaming the system that purchase the product.

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