Top doc: Obamacare ‘death spiral’ already here

WASHINGTON – With the Supreme Court currently mulling the King v. Burwell case against the Affordable Care Act, supporters of Obamacare have warned that a “death spiral” may result if the court strikes down subsidies for health insurance purchased through federally established exchanges.

But the federal health-care takeover law already has caused a death spiral, according to Dr. Lee Hieb, M.D., past president of the Association of American Physicians and Surgeons.

It’s just that she speaks of a different kind of death spiral.

“There’s a death spiral in medicine already because it’s creating shortages of doctors and hospital closures, and that’s a business death spiral the medical community’s already starting to be in,” Hieb said.

A traditional “death spiral” occurs when many healthy people drop health insurance coverage, leaving a risk pool that is smaller and sicker than before. Insurers are forced to raise premiums to continue paying promised benefits to their sick customers. But this premium hike causes remaining healthy customers to drop coverage as well, because they don’t feel it is worth it to pay sky-high premiums for coverage they rarely, if ever, use.

Once these healthy people leave, insurers must raise premiums again, causing even more healthy customers to leave. The cycle continues until only the seriously ill remain in the risk pool, because they are the only ones with an incentive to pay the enormous premiums.