The Affordable Care Act’s Math 101–Not for the tame at heart

According to Princeton Survey Research forty-percent of us would rather pay the fine than pay for insurance.  I bet that throws a wrench in Sebelius’ spread sheet.

Oh, and given that only twenty-eight percent of us were uninsured before the Act, the wrench must be huge.  This is sort of like the business strategy that states “We’re losing money but we’re making it up in volume.”

So, potentially when the dust settles there will be more people without insurance than there were before we made insurance affordable.

This means that the price of insurance for the remaining sixty percent will increase.  Therefore, some of those people will drop their coverage and elect to pay the fine.  In business terms this is known as a death spiral.

At this rate by June nobody will be paying for insurance because nobody will be able to afford it.  The insurance companies will be out of business.

If that was the final outcome, I might argue that that is not a bad thing.

But that cannot be the final outcome.  Somebody will step in to provide insurance—just like they do in Europe, only our somebody will have a Washington DC zip code.  I think that was the plan all along, but I am a ‘glass is half full’ kind of guy.

BTW, how’s your French?

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