Obamacare, Gov't Insurance Exchanges, & The Coming Price Explosion

One of the features of the Patient Protection and Affordable Care Act, the health-care reform bill colloquially known as Obamacare, is the creation of insurance exchanges that will offer heavily subsidized policies and coverage for people who cannot get insurance through their employers.

In projecting the program's costs, the Congressional Budget Office figures that about 7 percent of the workforce currently covered by employer-provided insurance will drop those policies and sign up for the subsidized insurance. That estimate - and hence, the cost structure of the program - has been challenged by sources such as McKinsey & Company, the consulting firm, which reckons a far higher percentage of workers will opt out of their current job-based plans. In a survey of employers released in June, McKinsey found that 30 percent will "definitely or probably" drop their coverage as Obamacare kicks into high gear in 2014. Among "employers with a high awareness of reform, this proportion rises to more than 50 percent," says the report. Why? It will be cheaper to pay fines than to provide coverage.

If those estimates are accurate, the cost savings ObamaCare supporters tout are a pipe dream.

Glenn Morton, the author of the new book Passing Obamacare, has worked for nearly two decades in the health-insurance business, most recently as a broker who helps employers find better deals among providers. In a discussion with Reason's Nick Gillespie, Morton adds another problem with recently released Obamacare rules: The mandate to reduce the percentage of insurance costs that go to administrative costs effectively means that insurance brokers' commissions will be either drastically cut or reduced altogether. If brokers' role in hunting for better coverage plans is eviscerated, argues Morton, companies will lose their main ally in the search for affordable and dependable coverage plans. The result, says Morton, will be that more and more companies will cease to offer insurance, thus driving even more people into the insurance exchanges and the cost of Obamacare up and up. CBO says the cost of giving subsidies to 16 million individuals over Obamacare's first decade will be $466 billion alone.

About 4.30 minutes. Shot by Meredith Bragg, Jim Epstein, and Josh Swain. Edited by Anthony L. Fisher.

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To read Reason's coverage of health care online, go to http://reason.com/topics/health-care

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[KittenKodersViews]

Obama's healthcare bill is actually a cave in to the insurance lobby. The real problem is that people need health insurance and loans for routine medical care. That's a serious problem, which if not addressed will cause more people to die from failed doctors who ignore medical science and cost the entire country more all around.

[AntiMAGGOTS5]

Who cares about mccainisthrough? What about YOUR PROVEN COWARDICE in promptly BLOCKING me from commenting on your profile page? It wouldn't have anything to do with the fact I was KICKING YOUR ASS at debate, would it, stupid KOOK?

Oh, and making fun of people with disabilities and physical characteristics, I see. You are a perfect ambassador for the conservative movement, scumbag!

Go ahead and PLAY DUMB about Kathleen Ludington! You know damned well she was AXED by YT, KOOK!

[UTubekookdetector]

Ask mccainisthrough what happened when she debated me on a few vids. Your only method is a spammer w/really poor arguments. I took the liberty to save 30+ shots of your comments. When I get the vid up, I'd eagerly await your vid response, but I hear your English isn't that good. Couple that w/a hairlip and you wouldn't want to open yourself up to all kinds of criticism & laughter. Good luck old man, you'll need it. I won't be responding to your comments anymore, but who is Kathleen Ludington?

[AntiMAGGOTS5]

Oh, SCREEN SHOTS!! SHIVER ME TIMBERS!!! I'm PETRIFIED!

I can only think of ONE thing to say to your "threat," KOOK: BWAHAHAHAHAHAHAHAA---AAAHAHAHA­AA!!

Post away, BITCH! And tell us all about the disappearance of "TEAM" Kathleen Lugnut, BIAAAATCH!!

[UTubekookdetector]

What are you talking about old man? Are you accusing me of something? I still have 30+ screenshots of your comments on my channel, you'll be in Kook Central soon. Tata!

[AntiMAGGOTS5]

I didn't use the abbreviation. YOU did.  Now prove you have the courage of your convictions, shitpacboom!

[AntiMAGGOTS5]

DEFINE "A. A.," RACIST!

[AntiMAGGOTS5]

"PROVE I HAVE A BEDROOM" BWAHAHAHAHAAAA!!!

So is this your way of ADMITTING that you live in your mom's basement, shitpacboom?

[AntiMAGGOTS5]

You LIE all the damned time. You don't even know the difference between the truth and a lie, shitpacboom!

[AntiMAGGOTS5]

Nope. You call guys "GIRLS" because you are trying to entice them into your bedroom. It ain't working, shitpacboom.