Adam Crain

SC Loses Out On Choice

October 21, 2016

Adam Crain

When it comes time to ObamaCare, the news just keeps getting worse. According to The Post and Courier’s article, Obamacare Customers in South Carolina Face Fewer Choices, Higher Prices Next Year, if you receive health insurance through Obamacare you have one option for coverage: BlueCross BlueShield of South Carolina. Don’t want BlueCross BlueShield? Too bad.

Though maddening, this news is not surprising. After all, we have chronicled the ails of Obamacare here, here, here, here and here. As Aetna and United Healthcare pull out of the South Carolina exchanges, South Carolina becomes the fifth state to have only one ObamaCare insurance option.

So now South Carolina’s ObamaCare “marketplace,” which used to have five insurance companies associated with it, now only has one.  To paraphrase the old story about the Ford Model T, you can have any color you want…as long as it’s black!

Uncertainty created by heavy-handed mandates and the problem of “adverse selection” (sick people signing up for insurance, while healthy people don’t) have distorted cost calculations, leading insurance companies to suffer heavy losses. Insurance companies have found they simply can’t foot the bill.

If ObamaCare had not ushered several million people into the federal marketplace, this wouldn’t be such a big deal. But it did, and now the risk that South Carolinians could be out in the cold and lose all health insurance options through the exchange at some point in the future is even greater. (And for the record, state-run exchanges have not fared any better than the federal exchange.)

That would mean Obamacare customers would be released to buy from the private market, but it would also mean they would be forced to sacrifice their subsidy – the mechanism that is keeping their out-of-pocket cost artificially low in the first place.

Unfortunately, the bad news does not end there. Insurance customers could see their premiums rise as much as 27% in the next year. Most forecasters argue that premium increases will be offset by federal subsidies and tax credits, but whether or not you qualify for the subsidy adds a layer of uncertainty. The threat for vast premium increases remains.

What a mess!

Choice is down while prices are up. And what is to say BlueCross BlueShield won’t go the way of Aetna and United in the years to come? According to The Post and Courier, Blue Cross Blue Shield is already ending its BlueChoice subsidiary program in South Carolina and has made no decisions on 2018 for the company as a whole.

If past is prologue, we have reason to be skeptical about the future of ObamaCare.  But don’t take our word for it.  Recently, even President Bill Clinton got in on the act saying “You’ve got this crazy system where all of the sudden 25 million more people have health care and then the people are out there busting it, sometimes 60 hours a week, wind up with their premiums doubled and their coverage cut in half. It’s the craziest thing in the world.”

We agree.

The ObamaCare “death spiral” that so many warned about is happening before our very eyes.  The future of American healthcare hangs in the balance.  Will we double down on the same failed ideas of the past?  Or will we return power to states and local communities and move to empower patients with control over their own health care destiny?

Time – and the November election – will tell.


The Future of the Obamacare Exchanges

Bill Clinton’s Right: Obamacare’s Tax on Success is “Crazy”