Individual mandate penalty needs to increase to make ACA successful

obamacare-logo_fullThe key for Obamacare to succeed is that healthy people, who do not have health insurance, need to “jump in the pool”.  If they do not then when you project 500,000 to join,you only get 100,000.

Bad enough that you only get 20% of the anticipated enrolled, but you most likely got the worse risks.  The ones that had pre-existing conditions and enrolled to get procedures done immediately.  In other words, the claims loss ratio will be upside down and the insurers will need to increase the rates dramatically at renewal.

As the rates go up, the chances up and up, the chances of health people enrolling will be become less. The claims loss ratio will get even worse, rates increases will get worse and you end of with a pool of bad risks with outrageous health insurance rates.  Once it starts to spiral, there will be no stopping it.

How do you convince healthy people to sign up?

First, you come up with a premium that is incredibly low.  This can’t be done when you mandate the coverages that ACA requires.  We have seen this through the exchanges already that it can’t be done.

Second, you need to penalize people that don’t have health insurance to make them buy health insurance. What’s the penalty right now?

  • single $95
  • 27.50 per child
  • Family maximum is $285

Nobody will buy health insurance when the costs are $300 per month per single or $1000 for a family to avoid annual penalties that are this small!!   The penalty would need to increased to $3,000 for singles and $10,000 for families to force people to buy health insurance.  Now, we all know this will never happen.

Here we there are two ways to get healthy people to “jump in the pool” and neither will ever happen?  Bottom line, Obamacare will never work.

Affordable Care Act

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