ACA is in trouble and could be on course for a death spiral [View all]

[hill2016]

Don't need the Republicans in the House to shut it down, this could sink all on its own weight.

http://www.wsj.com/articles/rising-rates-pose-challenge-to-health-law-1447894371
Rising Rates Pose Challenge to Health Law
Higher-cost premiums for 2016 threaten the appeal of the program for the healthy customers it needs

http://www.wsj.com/articles/health-laws-strains-show-1446423498
Health Insurers Struggle to Profit From ACA Plans
As third enrollment season kicks off, insurers move to curb costs, boost premiums

http://www.wsj.com/articles/unitedhealth-cuts-guidance-evaluating-its-insurance-exchange-segment-1447933310
UnitedHealth Raises Doubts About Its Participation in Affordable Care Act
Insurer cuts earnings outlook, citing losses from health-exchange products

http://www.wsj.com/articles/more-health-co-ops-face-collapse-1445034912
More Health Co-ops Face Collapse
Colorado’s co-op and one in Oregon are folding, joining six others; coalition considers legal action





If you recall, ACA forces the mainly young/healthy/male to subsidize the old/sick/female by banning insurance companies from charging different prices based on gender or pre-existing conditions. There's a limit to how much they can charge based on age. There are also 10 essential benefits which are expensive to cover and not everyone needs.

So given the dynamics of higher premiums, it's logical for the young/healthy/male to start thinking whether they really need to be covered and should just drop out.

Which raises the premiums for everyone else in the pool since they are by definition sicker. Kind of an adverse self selection going on.

And despite what you may think of greedy insurance companies, they haven't been profitable either due to higher than expected costs. And if the health insurance companies can't be profitable, they are going to drop out.

So on the one hand you have the healthy people dropping out and on the other hand more and more insurance companies are going to drop out. That's by definition a death spiral.



Note: I haven't taken any position on ACA vs single payer in this OP. I'm just laying out facts and an analysis. So let's stick to facts and avoid name-calling, if that's possible.