Health insurance under enlightened federal management — the heart of Obamacare — is not coming to pass, writes Kevin D. Williamson in NRO. It is dead and will not be revived.
The fundamental problem with ACA is that under it, insurance ceases to be insurance. Insurance is a prospective financial product, one that exploits the mathematical predictability of certain life events among very large groups of people — out of 1 million 40-to-60-year-old Americans, x percent will get in car wrecks every year, and y percent will be diagnosed with chronic renal failure — which allows actuaries and the insurance companies that employ them to calculate premiums based on risk, thus funding the reimbursement of certain expenses incurred by the insurance pool’s members. Insurance is, by its very nature, always forward-looking, considering events that have yet to come to pass but that may be expected and, to a reasonable extent, predicted with some level of specificity. Under ACA, insurance is retrospective.
ACA mandates that insurance companies cover pre-existing conditions, meaning events that already have happened, which renders the basic mathematical architecture of insurance — the calculation of risk among large pools of people — pointless. Insurance ceases to be insurance and instead becomes something else, namely a very badly constructed cost-sharing program.
Obamacare is an economic shambles and a political mess that has introduced nothing to the American health care system except chaos. Read more from Mr. Williamson here.