Insurance is a vehicle through which a large number of people can share risk in return for a proportionate contribution to a fund set aside for that purpose. The ACA plan mimics health insurance in form, but not in substance because it does not require people t o pay their proportionate share of the costs associated with the health care provided. Instead, it requires some people to pay a disproportionate share of these costs while others pay little or nothing because of government "subsidies." This means that the ACA is not really health "insurance" because it lacks the essential element of shared risk.
Why is this important? Because it is actually a new government "entitlement" which has been disguised as a legitimate insurance plan with ridiculously low premiums for people of modest incomes. As a result, they will be convinced that they are paying for this coverage even though it is actuarially unsound in the extreme. Even when the real cost of this program becomes apparent, these people will resist any attempt to curtail coverage or increase premiums, since they feel they are already paying their fair share.
The consequences of this political shell game will be enormous. We will find ourselves with uncontrollable costs and no way to fund them except for increased borrowing. With Social Security and Medicare already on unsustainable trajectories, the additional economic burden created by the ACA will be catastrophic. What will happen politically when we are faced with the inevitable decline in our standard of living?
Why is this important? Because it is actually a new government "entitlement" which has been disguised as a legitimate insurance plan with ridiculously low premiums for people of modest incomes. As a result, they will be convinced that they are paying for this coverage even though it is actuarially unsound in the extreme. Even when the real cost of this program becomes apparent, these people will resist any attempt to curtail coverage or increase premiums, since they feel they are already paying their fair share.
The consequences of this political shell game will be enormous. We will find ourselves with uncontrollable costs and no way to fund them except for increased borrowing. With Social Security and Medicare already on unsustainable trajectories, the additional economic burden created by the ACA will be catastrophic. What will happen politically when we are faced with the inevitable decline in our standard of living?