Death Spiral: 6.5 Million People Choose To Pay Tax Rather Than Buy Obamacare

Tyler Durden's picture

For those who still aren't convinced that Obamacare is trapped in an inescapable death spiral that will inevitably end in nothing short of an epic collapse of the federal and state health insurance exchanges, perhaps you should consider the following facts from the National Review and Mark Farrah and Associates.

-  Four heavily promoted open enrollments have taken place run by the Obama administration and the state exchanges.


-  Federal law has required people to purchase insurance or pay a fine — and the individual mandate was administered through 2016 by the Obama administration. In fact, in 2015, 7.5 million people paid the fine, while 6.5 million paid the fine in 2016, according to the IRS.


-  Every one of the people in the insurance market earning less than 400 percent of the federal poverty level were eligible for premium assistance — and those below 250 percent of the poverty level were also eligible to have their deductibles and co-pays subsidized.


-  After all of this, only about 40 percent of those eligible for subsidies have signed up for coverage. In what other business or government program would such a dismal acceptance by those it was targeted to serve be considered a success?


-  The number of insurance companies participating is on track to shrink by 38 percent in 2018.

And then there is the chart below...if people really saw "value" in Obamacare wouldn't you expect that more than 2% of the people who don't qualify for subisidies would sign up?

Finally, I will suggest the real test of whether a health-insurance program is stable is whether the consumers for whom it is intended believe that it provides them with value. Here is a chart of the take-up rate on the federal exchanges under the Affordable Care Act; excluding the “Over 400%” category, all of these individuals are eligible for subsidies. This chart represents data from last year, but with only a 4 percent reduction in those purchasing on the exchanges between 2016 and 2017, it should remain a fair indication of consumer approval of the program.


The health-insurance industry has long considered a 75 percent take-up rate to be the gold standard in evaluating whether an insurance pool is stable — i.e., whether there are enough healthy people signed up to pay the claims of the sick. While the exchanges appear to have achieved this for the lowest-income consumers — those who get the biggest premium subsidies and also have their out-of-pocket costs subsidized — only 17 percent of those making 301 to 400 percent of the poverty level have signed up.



Still not convinced, how about this?  The "off-exchange market" (i.e. people who make too much money to quality for subsidies and whose premiums are required to subsidize everyone else who does qualify) contracted by 2.1mm in 2016, or a 29% drop.  With those kind of declines, it's only a matter of time until there are no more rich fools in the pool willing to continue subsidizing a broken system.

Also, MFA published the same report in 2016, facilitating a year-over-year comparison. The on-exchange market fell from 12,681,874 to 12,216,003 individuals, a reduction of 465,871 or 4 percent. However, the off-exchange market fell from 7,520,939 to 5,361,451, a reduction of 2,159,488 or 29 percent. In other words, enrollment is steady among those who receive subsidies but declining dramatically among those who do not.


Much has been made of the question of whether the individual markets are in a “death spiral.” Given that the on-exchange market enrollment is relatively stable, there is clearly not a death spiral in the subsidized market. However, with a reduction in the unsubsidized market of 29 percent in just one year, that pattern certainly looks like one we would expect in a market spiraling down.

Meanwhile, of course, that 29% drop exactly why insurance companies are expected to hike their rates by 20-40% in certain markets again in 2018...


...and why rates have soared an average of 113% over the past 4 years, or nearly 30% per year.


In summary, higher rates results in more people dropping out which results in higher rates...see the ponzi-ish circularity yet?

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takeaction's picture

If you have any assets..(And built a life) can't just pay "The Tax"...

The real headline should be 6.5 million more people have nothing to lose, so therfore, why get insurance?

It will be FREE anyway when I go to the Emergency room....

InjectTheVenom's picture

I'd rather ....

>>>>    buy Obamacare

>>>>    let lobsters chew on my balls

takeaction's picture

So from the "Let lobsters chew on my balls" votes...I take it that none of you have anything of value?  No house, no cars, no investments?  Correct?

Because if you are like myself......worked hard, done well, you have to have catastrophic health insurance...Right?  Or you are wiped out with one incident.  My father had a heart attack, and the bill was $190,000.  He had coverage, so his portion was around $5000. 

So you people I assume do not have Car insurance, home owners insurance or any other coverage...correct?  Just saying.

Lumberjack's picture

I down voted you. See my comment below...I know more folks who have had similar Obamacare experiences. I served as a Fire Chief and know first hand how this shit worked before and after Obamacare.

No need for what has happened.

takeaction's picture

So you have no insurance???

OH YOU DO...You were a Fire Chief.....So You Must have state funded Insurance for life......ahhhhhh   I get it.   I am a private business owner....I must pay to protect myself.

So since you have had state funded Insurance you have no clue what private business owners go through....

Lumberjack's picture

Volunteer Chief (Retired) No benefits. I know a lot of doctors and know first hand what the real costs are. $5000 just to put a patient in an ambulance for 2 minutes. Helicopter rides $20k. Aspirin $30 a pop.

I will give you a thumbs up for mentioning how business owners got royally fucked. It hurt them badly.

stacking12321's picture

i have no health insurance

i pay NO OBAMACARE TAX, and if you do, you're a fucking tool.

overbet's picture

I have been through an audit. Have you?

918pigpen's picture

Actually yes I have!!!

And I have yet to buy health insurance or pay the fucking fine!!

blown income's picture

Yup same here..I chose to get most of my earnings each week AND NOT some bullshit refund. .no takey...







Chuck Walla's picture

If you qualify for VA care, not use it mind you, but sign up, you are excused from Obamacare.  Automatically.

The Cooler King's picture

I wanna know if the members of Congress (who are exempt from Obamacare), are likewise exempt from paying the TAX.


Rhetorical question ~ just another way you're getting screwed.

I Quit's picture

I know. I have less taken out of my check, so I always "owe" at the end. That way they can't TAKE the penalty. And they have no other way of collecting it.  Who the heck pays?  


see my bio please and help me help kids.

RAT005's picture

Start from the fine is not enforceable.  Then consider age and lifestyle to decide if you are successful enough to consider self insuring.  Remember, Obamacare health insureance policy has almost no relation to receiving health care from a useful provider.  The paper contract vs. genuine health care almost irrelevant to each other.  Kind of like paper gold vs. phys gold.

overbet's picture

It is totally worthless. I have the gold level ppo bullshit and it covers nothing. I still pay out the ass eveytime for a prescription or specialist visit. I would love to not buy it, but its fucking cheaper to buy it than to pay the penalty. 

RAT005's picture

The penalty is not enforceable.  I've never paid it.

boattrash's picture

How many like me did neither enroll or pay the fucking fines? (I did pay my Dr.) I did give Uncle Sam the one finger salute as well.

PAWNMAN's picture

I have to agree. As a small business owner I'm getting the shaft to the tune of $1300 a month for my wife and I. This is with a $6700 max out of pocket mind you. BUT almost 3 years ago I was diagnosed with stage 3 head and neck cancer. Racked up over 300K in medical bills that year. With annual PET Scans I'm in for about 50K a year for the foreseeable future. Without insurance I would've been screwed big time. The real pisser is the 25% annual increases. Dudes right, if you have something to lose you have no choice. Which is the way they want it, and why I'm so damned angry about it.

boattrash's picture

Best of luck with your diagnosed issues. I just got home last night from my mother-in-law's service. I vowed I will never go along with the Medical Profession's treatments, uninsured, or with my Platinum plan...but that's a choice each individual must make for themselves. Just sharing mine with you. But seriously, I wish you the best. BT

RAT005's picture

Your how to self medicate and does the medical industry have anything to offer are significant parallel issues.

Go easy on sugar and salt.  Don't smoke.  Don't be fat.  Get comfortable sleep.  You're a long way towards good health.

Spitball's picture

I've often thought that if I ever get cancer, I won't be visiting the local healthcare store for treatment. 

The shit they pumped into my father in-law made him more sick and weak. If your going to die quick, have some sort of quality of life.

I totally believe in a healthy lifestyle. SUGAR is the #1 killer in my mind. It comes in many different forms. 

This country puashes sugars and grains to no end. I don't eat either unless its in natural form like fruits or REAL maple syrup.

I look at every label, if sugars in it, I don't buy it

People wonder why there's so much cancer

PAWNMAN's picture

Appreciate that! I didn't tell the whole story. Last December a scan revealed that it had migrated to my lung. Making me stage 4, and supposedly a couple years to live. Since then I went completely alternative, and passed on the "standard of care". Been clean the last 8 months. Convinced the medical establishment has no interest in finding a cure. Does anyone really believe that they would just shutter all these new cancer centers? I think that's the point you were making.

boattrash's picture

Awesome! (Been clean the last 8 months.)

Cancer didn't kill mom, but whole brain radiation sure as hell did. She'd have been as well off to go swimming in the Fukushima meltdown pool. It was the equivelant of them pushing the "kill switch" on her. (Naturally, after bleeding all the funds/Ins/assets/etc dry).

But she died cancer free!


blown income's picture

Dam...stay well...



a Smudge by any other name's picture

I got on medical insurance. The meds I needed were like $90k.

For a full year those effers strung me along, offering me every test and screening that had NOTHING to do with my illness. Finally I just started repeatedly asking for the meds. Just give me the meds. Give me the meds give me the meds give me the meds. That's when they started with the excuses.

They didn't want to pay for what I needed, period.

For you guys that say you have parted ways with the medical profession forever, I'm right there with you. Screw this game.

Mr T's picture

Hats off to you, you protect what you work for.

870 a month wow!

7.5 million pay the Tax.

Now we know why they don't repeal nOcare and where they are getting money for War!

rlm1966's picture

Actually I have insurance paid for by my company that is pretty good.  The downside is that when someone approaches me about coming to work for them, once we get to talking about benefits, when we compare insurance coverage and cost I have to jack up just how much they would have to cough up to get me to switch jobs and the conversation comes to an end.

krispkritter's picture

Pussy.  Who's going to save your ass when they come for the rest of what you own?  Eh, no one.  Because you sold your fucking soul to the Devil to maintain your status quo.  Dicks like you who have the pot to piss in(for now) could give a rat's ass about the people scraping by.  Your bag-o-dicks is coming, open wide asshole. The 'Government' needs to get the fuck out of it's Citizen's lives except where it secures the borders and our sovereignty.  Aside from that they can't manage fuck-all.

DeltaDawn's picture

A man with a thriving business and around 18 employees in my town had his 8 yr. old  son hit by an uninsured illegal alien while he was walking.  Bill was somewhere around 2.5 million because his son was completely shredded by the car.  

Since the driver was uninsured, it went to the dad's insurance, which capped out at 1 they took his house, his vehicles, his bank acct which included payroll and money set aside for his taxes. Company gone.  The IRS chewed on his ass for awhile. Now he works for someone else and lives in a modest apartment.



runnymede's picture

Shouldn't have cost 2.5 million is what's key here. There are no market pricing mechanisms in HC. They charge whatever they want and the price is gov protected. The sooner you realize its not about treating prople and more about billing people, it will then, and only then come clear. I've got family in the business and is staggering what the providers earn, the doctors earn, and the device makers earn and what admin earns, and of course the shareholders. And pharma !! Patient care is an afterthought. 

fattail's picture

That's what life insurance, estate planning, trusts, savings, LLCs, and bankruptcy are for.  It's great poor and Middle class  people got insurance.  To bad it wasn't a sustainable model.  Why should healthy people have to subsidize unhealthy lardasses.  Why should someone have to buy something they don't want or need.  

runnymede's picture

You need to seriously read F. A. Hayek --- Road to Serfdom.

I rarely use caps, but for you i feel compelled. Collectivism in whatever form it takes will NEVER ALLOW INDIVIDUAL ECONOMIC FREEDOM. They will grant any number of other freedoms that don't matter. The mechanisms of control are in place to put your assets under constant assault and threat of confiscation and in perpetuity debt by legal levy of taxation. If getting sick one time can wipe you out because of the cost, which is government protected and monopolied, therein lies the crux of the issue. It never was this way before August 15, 1971

It is an extremely inefficient industry with sky high costs and then you add protected pricing. And you only have to pay your deductible. Tab is picked up by society. But you dont g.a.f do you?

More lobbying money is spent by HC than any other to keep it the way it is. They'll attach your house to get their money, and get it they will. 

The vast majority of bankruptcies are health care costs. Then at the end of life they relieve you of whatever you've saved and hoped to pass on to your children on nursing care. They get it all and more.

Just seriously wake TF up. 

peippe's picture

I am assuming the 15 are females & have spare tennis balls laying around.........

Lumberjack's picture

It's another racket like civil asset forfeiture. I have to say that Karl Denninger has the correct ideas on this issue. He may come off as a pompous ass at times be he dead nuts nails this issue. Sure, go to the emergency room (without an ambulance ride) without insurance. You will get at least a $1700.00 bill and the attending physician will give you this advice...."go see a doctor". I shit you not.

I know someone who has fucking Obamacare and owes $140k for a botched hernia surgery. Months later they are still waiting for corrective surgery and the bills keep mounting.

Trump and congress need to kill the useless mandate and reform the way this industry has repeatly raped us all.

I hope congress, and their families enjoy their fucking exemption.

Never One Roach's picture

Soweeto and his pet wookie can suck my cock.


I never saw a politician hate America so much as those two shitheads.

Ok, maybe McStain is one but not many more.

takeaction's picture

I don't understand your arguement?  Again......if I have let's just throw out a number....say $1.5 million in assets....and make a good monthly income.....are you telling me that I should not have health insurance?

One incident without coverage and I go to ZERO.  

For my wife and I....$849 a month.  $5400 deductable, but all basic things are covered, with no cap.  All yearly checkups...her birth control, Cancer screenings, on and on are all covered in this package.  

$1,500,000 in medical bills can happen pretty fast.....I have worked too hard just to have everything wiped away with one incident.



dchang0's picture

Thing is, it's not just free trips to the emergency room.

The pre-existing conditions requirement of Obamacare means that people can get life-threatening, mega-expensive diseases or injuries and then buy "insurance" right after they need it.

Kevin D. Williamson, Peter Schiff, Stefan Molyneux all talk at length about this. Here's one of Williamson's shorter pieces on it:

The problem now is that people can drop any insurance coverage at all knowing they have this ultimate safety net even for long term medical costs.

I get what you're saying with your example's math, but there are people who are taking the gamble and counting on the pre-existing conditions largesse to save them. It IS a gamble, because we don't really know if Obamacare can bail out people with very large medical bills or for how long or under what conditions, etc. We all know that the promises of Social Security and many pension funds will not be met. It could very well be that some individuals will get injured, file for Obamacare's pre-existing conditions exemption coverage, then get denied because the exemption was removed during the processing of their paperwork.

boattrash's picture

Maybe I can help you understand by adding my two-cents-worth....Regardless of assets/net worth, some people object to an ass fucking regardless of the price being "mandated" at $1 or $60,000. Does that help the comprehensive reading skills?

The ACA was designed to destroy the system. Period. Open revolt/refusal to comply with it is a good "first start" to changing it. Our Founding Fathers were willing to sacrifice their fortunes and their lives...

Edit; Does your auto Ins cover your oil changes, car washes, and wiper blades? It's mandated...Get it?

Never One Roach's picture

That's another reason Soweeto bin Bama exempted all government employees. He (and Gruber) knew they would never stand for this shit. The private sector middle class that gets hit the hardest by far is simply not organized enough to vote this stuff down. Seems like now we are with trump at the helm but many Dems and rep have their pockets lined with insurance company money and want the pork to keep coming to them.


And then there's McShame:


Brain tumor affected McCain vote, GOP senator suggests

runnymede's picture

You are a fear slave. You have much to lose so you play their game. It took me years to figure this out.  Re-read the first sentence of your last paragraph.  Ask why that is. If you don't, you will never be free, because you will never understand. If you benefit from the status quo, you want things juuuuust the way they are.

If market forces determined pricing, healthcare would be a tenth of what it is. As long as folks buy into the fraud that is the HC industry; whose model is based on government sanctioned pricing, patent protections, monopolies and speading the cost to the non-sick and 'government', which has no money of its own. 

FFS, hepatitis C treatment is 90 thousand dollars! Wrap your head around that. Its 90 pills, one a day. Unless they make them out of unicorn ball sweat extract, it's a joke. In india they make and sell the pills for $10 per. So big Pharma gets laws passed preventing importation into the U.S. You are a criminal if you do. So much for "of, by, and for the people"

Just pass the cost on to someone else. It's this mentality that is pervasive and why HC cannot be fixed. 

HC is bankrupting the country. No market forces and government protected corporate intetests do exactly that with enough passage of time. Wake TF up and see it for what it is. 

DeltaDawn's picture

To make matters worse, I read that Hep C was introduced through the immunations they did of troups for Pacifc WW2 theatre.  Another fine gift from our gov't to the citisens.

Lumberjack's picture

Remember how rich folks took advantage of medicaid (and) student loans to Havahd n them otha skools? File bk and went on their merry way? That was ground zero for all this shit besides tons if medical fraud in meficaid.

So the Libs now have us all paying for all those illegals who 'flee' their countries for many different excuses. Why the fuck they failed to move to Nova Scotia beeilders me, except that the liberals are worse liars or the folks in Nova Scotia pulled the welcome mat...

President Trump needs to sanction those countries for the welfare, health costs and incarceration for a period of 10 years. Full costs including administrative costs. Failure to fo so will result in all costs plus the cost of deportation, plus pain and suffering they may have caused. That will bring costs down significantly and solve some very serious problems. Lots of work to do yet...

Lumberjack's picture

Furthermore, I know first hand of Obamacare with folks who lost everything from the resulting $140,000 bill from an insured individual who had a botched hernia surgery. I could go on but leave it at that.

skipjack's picture

No. You get smart about it. Why pay $850/month for an annual that costs $250 ? I'm 60, no medical issues, my last physical and blood tests came back better than most 30yo people. If I had it, my ObummerDon'tCare premium for BRONZE coverage would have been $1380 PER MONTH for an individual, with a $6700/year deductible and 40% copay. A platinum plan would have cost $2700/month. Yep.  Those numbers are accurate.


I won't pay that. Ever.


So, I bought accident insurance, $1,000,000 per accident, $5000 deductible, $370/year. I bought major disease coverage, $1,000,000 coverage, $5000 deductible. $1100/year. So for less than $1500/year and a $5000 deductible, I have better coverage than an OBummerDon'tCare plan.


Don't be a muppet and play their game. Think for yourself.


krispkritter's picture

Details please. All my coverages were cancelled due to O-Fuck-U-Care.  Haven't been insured since.  My catastrophic policy was 1/6th a Bronze plan, deductible was the same, and I had a larger network provider.  Never paid the fine and never will.  They can take my wallet off my corpse.  I pay all my checkups and bloodwork out of pocket.  If I ever get that sick that it will take $100's of 1000's to save my sorry(non-Kardashian-worthy) ass, I'll walk into the woods or take an overnight in mid-winter, outdoors and nekked, in Wisconsin.  

WillyGroper's picture

liberty health share.

dr. elaina George's blog.

way cheaper better coverage.

how_this_stuff_works's picture

"liberty health share."

Who downvoted you for that? I went with Christian Health Ministries. Two years ago my premium would have been $638 a month + $5000 deductible. It was like flushing the money down a toilet.

hawaiian waverider's picture

Why the downvote?  Health oppsoed to health care totally makes sense.  Google it.  If your fat, lazy eat crap food and can't get off your ass maybe it's not for you.  

maxblockm's picture

Which providers do you use for the accident and disease coverage?