SHOCK: Health Savings Accounts (HSAs) Thrive Under ObamaCare’s Actuarial Value Rules
The collective shock of the Health Savings Account community was felt inside and outside the Washington, D.C. beltway, as various actuaries, health policy experts and health care lobbyists tested out the Health and Human Services’ Actuarial Value calculator and found that HSA qualified health plans will qualify, in almost all variations, for the exchanges and the self-insured, small group and individual market.
While the calculator does not allow for family HSA qualified plans to be tested, it (now) seems inconceivable that HSAs for families will somehow not qualify (due to the individual HSA qualified health plan AV calculator results, and given the fact that most HSAs, are family plans).
The more hard-headed of the HSA community immediately began searching high and low for the skunk in the woodpile.
No skunk was found.
The world’s foremost HSA actuary, in classic actuarial understatement, summed it up best: the HHS AV calculator turned out about “as well as could possibly be expected.”
What’s up with this amazing turn of events?
One high level Democratic operative explained it to me this way: “the White House always knew they had to have HSAs and Bronze plans to make the exchanges work.”
So, HSAs are now going to make the ObamaCare exchanges work?
We know this much: HSAs will be lowest cost alternative, for everyone — individuals, small groups and large groups — that much is certain.
One health care actuary said, “HSAs will be part of the health care system under ObamaCare. If you think of the entire U.S. health care system as a bridge, there is no question that ObamaCare will collapse the bridge. The question is when the bridge will collapse (the actuary says 2017) and which stress points will fail first, and cause the bridge to collapse.”
When pressed, the actuary explained: “ObamaCare legislates moral hazard and imbeds it into the ObamaCare DNA.”
In every state or country where the ObamaCare “reforms” of community rating and guaranteed issue have been implemented, the healthy drop out of the insured pool. This causes rates to not be able to climb faster than costs (in ObamaCare this will be worse because of statutory rate increase limits).
Rising costs and premium prices that can’t keep up with those costs mean that within five years the insurers will be bankrupt.
Specifically, the actuary explained: “the mandate is not strong enough, so instead of paying every month for a very expensive health care premium, the healthy will simply pay the annual fine, and then, when they get sick enough, they will show up at a hospital and be guaranteed issued into coverage.”
“As the healthy drop out of the health insurance pool, and the pool gets sicker, community rating and guaranteed issue will force the healthy to pay for more and more expensive premiums. At some point, in three or four or five years, the healthy will realize that they do not have to pay these expensive, monthly premiums.”
“In a nutshell, the public at large will understand, if I get sick, I get automatic [guaranteed] coverage.”
So, when Americans who do not want or will not want to purchase health insurance, are finally either sick enough or are in the hospital, they will be “guaranteed issued” into coverage.
Bam, just like that. They made a rational economic choice to be sick first, and then, when needed, get insurance.
The actuary continues: “Once they understand this, they will act in their own financial self interest, and will drop their expensive monthly insurance, and wait until they are sick to be guaranteed coverage.”
And thus, the great morality of the left as enshrined in ObamaCare — that everyone be issued health insurance — will collapse the U.S. health system.
The problem is, while the healthy are not in the health insurance pool, they cannot subsidize the cost of the sick.
Meanwhile, the lowest cost option, HSAs, will be the last stop for most Americans before they drop their ever increasing health coverage, and just move to cash transactions to cover their day-to-day costs, prior to becoming really sick.
The really sick will have to move to cash options too, since the rationing board will likely limit effective but expensive treatments that may save their life. Dr. David McKalip, a brain surgeon, explains here.
Everyone who decides they are not going to buy health insurance, because of the cost under ObamaCare, and would rather pay the penalty and wait until they are sick to sign up for coverage — and these people will be mostly lower income, younger and healthier — they will need some health care service. You know, the run of the mill stuff.
Cash doctors or nurse practitioner clinics will boom. So will any other cash based medical care clinics. The uninsured, or those who choose to be uninsured under ObamaCare, will still need services.
So, buy stock in companies that operate in the cash only world of health care, and buy it soon.