Trumps Obamacare idea will fail!

Trump allowing cross state purchase will put a strangle hold on ACA. It is the same mistake made in the vehicle insurance industry years ago.

You can't allow insurance companies to create a market solely based on cost to the consumer. At jump it looks good. But as insurance companies compete they will reduce the coverage and force higher premiums to the market. With auto insurance those that had prior accidents found themselves without insurance or were forced to pay nearly double in premiums. Those that bought insurance from out of state found  one accident caused them to loose coverage because that state had different laws concerning the dmv point system,  driver age same household use of a vehicle by multiple drivers with different accident records had low cost insurance companies fighting not to pay. Many promising 100% coverage but dropping the insurance after the first major collision.

Imagine that you're  healthy 25yr old. You buy cheaper surance. You get pregnant or suffer a stroke or heart attack and your insurer drops your coverage. You'd  forced go buy the more expensive coverage for your new pre-existing. condition.

Things got really crazy in the auto insurance industry until minimums were set by the government and forced insurance companies to accept all drivers regardless of history.

I expect that Trumps executive order will cause the same chaos in health insurance by this time next year.

Looking at result of this move in the vehicle insurance industry shows the number of available insurance companies will not increase as Trump says. What happened was the larger companies simply bought out the smaller. The smaller insurers rather than trying to compete against national giants sold their underwritten policies to the larger to avoid bankruptcy in that state. So an increase in choices for the consumer never really happened.

In the end people faced with the cost increases stopped purchasing insurance. This forced states to implement new laws and and regulations that required vehicle owners to purchase insurance. So in essence there was no reduction in government just a change of responsibility to state level.

This would be the same as single payer mandate in health insurance. Something congress is against.

Comments