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Quote of the week

Obamacare Imploding

“The system as it stands is so enormously complicated that hardly anyone can really understand the whole, much less characterize the aggregate experience with the sector.  It keeps growing larger, more expensive, and more exploitative, but also more complicated and diffuse, leaving writers such as me ever less willing to make a judgment on it….[The] experience this year has been to cause many families to throw in the towel and simply decide to do what they had previously believed was unthinkable: just bailing on the entire thing.”

                  Jeffrey Tucker, Brownstone Institute president and Epoch Times columnist (5/27/26)

Comment: Since January, in light of premium increases from 25% to 115% plus increased deductibles, over a million Americans have dropped their coverage under the Affordable Care Act (ACA; aka Obamacare) – and, according to The Wakely Consulting Group (a trend-tracking group), many more will do so before the end of the year.  Wakely’s conclusions are based on a survey of 80% of the individual market. 

Three factors that facilitate this widespread departure are: (1) the Supreme Court deleted the original individual mandate from the law; (2) contract workers and workers for companies with fewer than 50 employees can opt out; and (3) Congress has declined to extend subsidies for the ACA. 

Apparently, the ACA is doing (or has done) what many critics predicted at the time it was passed – namely, it is destroying or has destroyed the pre- 2014 American health care system in order to make way for a single-payer national health care system for all, otherwise known as socialized medicine.  One of the built-in self-destructive features of the ACA is that premiums are not adjusted based on individual risk.  A healthy young 28-year-old pays the same premium as a 53-year-old diabetic with heart disease.  Even if the ACA were now repealed, most of the damage has already been done.

As ACA premiums keep rising, often surpassing household mortgage payments, a great many Americans are not sitting back and waiting for government to act.  Besides dropping ACA coverage, families are looking at alternatives.  One alternative that many people are choosing, especially younger people and families, is taking the risk and then, if there is a significant medical problem, presenting themselves as uninsured to doctors and hospitals and negotiating substantially lower prices for services.  People who have some rainy-day funds would be able to do even better by offering to pay cash.  For those who don’t have such funds now, a substantial expansion of Health Savings Account by government would be appropriate.

An option that has recently appeared on the scene is a service like Direct Primary Care, which, for $100 a month, gives you access to a prescribing physician who would be familiar with your medical records.  Also, a possible option for younger, healthy families and individuals would be low-cost catastrophic insurance – i.e., coverage only for major medical problems that would otherwise bankrupt a household.  However, government would have to act to permit catastrophic insurance, since the ACA does not authorize such separate coverage.

Another up-and-coming option is so-called crowd-funding services – companies that negotiate prices for subscribers and covers them with cost-sharing.  As Mr. Tucker describes it: “It is not insurance.  Those who subscribe present themselves to service providers as uninsured and hence benefit from far lower prices.  The company then negotiates prices for you, covers them under most conditions, and charges separately for known costs such as pregnancy.  It’s a new model that works with the existing system.”

Mr. Tucker concludes: “Under current trends, you can see what’s happening here.  The system is reforming itself without the permission of the politicians” [Emphasis added].

And that’s a good thing!