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12.02.2017

The Avalanche of Death: This is just the start of US healthcare's collapse

The tax plan passed by the GOP last night is mostly a sop to their donors with some ultra-conservative red meat thrown in to win a few senators who may have once pretended to care about fiscal responsibility.

However, one thing included in the bill is essentially a repeal of the individual mandate to have health insurance -- a key component of the Affordable Care Act.

With this mandate gone, millions are expected to lose access to health insurance, and those of us that still have health insurance can expect it to get more expensive.

The reason is simple -- and the basis for all insurance programs. If something is expensive, you spread the cost out over a large group of people so they can pay small amounts. The problem with health insurance is that not enough younger people sign up for it.

That leaves only older, sicker people paying in to the system. The individual mandate sought to increase number of people paying into insurance pools so as to spread out the costs. Moreover, younger people get sick too -- not as often perhaps -- but they get in accidents, get sick, have sick kids. There is good reason to have insurance even if you are relatively healthy, and the more people with insurance, the lower the costs for each individual.

However, drop the mandate and many of those people will likely leave the pool. That means increased insurance premiums for the people who are left.

As premiums go up, fewer people can afford to buy health insurance and more drop out.

Wash, rinse, repeat.

Meanwhile, the Trump White House and Republicans are already planning to pay for their big tax cut with "entitlement reform." That is the GOP's expression for cutting Medicare, Medicaid and Social Security.

It is something they've wanted to do for a long time. Now they've created an excuse - the tax cuts could trigger forced spending reductions in Medicare starting as early as next year. 

Cuts to those programs will lead to more uncompensated care, which will make healthcare more expensive for insurance programs, which will lead to higher premiums.

More sick people not getting the care they need.
More medical bankruptcies.
Fewer providers.

-30-

Vox: Tax Bill is Just the Start of the Obamacare Collapse.
WAPO: GOP Eyes Post Tax Cut Changes to Medicare, Social Security
LA Times: After Giving Tax Cuts to the Rich, GOP Will Cut Social Security, Medicare
Forbes: How the GOP Tax Bill Will Blow Up Medicare
NYT: The Tax Bill's Automatic Spending Cuts

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