Profile image
By Cato Institute-Recent Op-Eds
Contributor profile | More stories
Story Views

Last Hour:
Last 24 Hours:

Arizona Is Ground Zero for Obamacare’s Death Spiral

Monday, October 3, 2016 7:49
% of readers think this story is Fact. Add your two cents.

Jeffrey A. Singer

The Affordable Care Act’s defenders have spent the past six years dismissing the law’s critics for predicting that it would enter a “death spiral.” But it turns out we were prophets — just look at what’s happening all across Arizona.

The past couple of months have seen the Affordable Care Act’s — Obamacare’s — online exchanges crumble in our state. Three years in, health-insurance companies have discovered that the law’s top-down, one-size-fits-all approach is a bureaucratic and financial disaster. So naturally, they’re abandoning the law in droves.

Aetna, after losing hundreds of millions of dollars, announced a few weeks ago that it was abandoning Obamacare in Arizona. UnitedHealth Care made the same decision in April. The other major companies — Blue Cross Blue Shield and Health Net — have pulled out of several counties, including Maricopa County, the largest market in the state.

It’s clear that the Affordable Care Act can’t survive. But don’t let that take us down an even darker road.

It’s clear: Obamacare can’t survive

The result is a dearth of options. Every Arizona county except Pima will have only one insurer to choose from next year. In Maricopa County, the state’s largest, it went from eight choices to one.

As for Pinal County, between Phoenix and Tucson, it looked as if there would be no Obamacare plans for some 400,000 current recipients. But Blue Cross/Blue Shield recently agreed to offer one plan — after getting permission for a 50 percent rate increase.

What’s happening in Arizona is a microcosm of what’s happening everywhere else. This year, people in some 182 counties across America only had one Obamacare plan to choose from. Next year, that number will rise to nearly 1,000 – a nearly 300 percent increase.

Over a third of Obamacare’s markets will have no competition whatsoever, while more than half will have the minimal competition of only two plans.

Obamacare is essentially creating de facto health-insurance monopolies. As these monopolies grow, they will inevitably lead to higher costs and lower quality of and access to care. This is the natural result of diminished competition, especially when it’s driven by government intervention in the market, as with Obamacare.

But what’s even more concerning is what could come next. It is increasingly clear that Obamacare can’t survive — even President Obama and his would-be successor Hillary Clinton are calling for radical changes to save the law they once said didn’t need saving. Naturally, they’re calling for even greater control of Americans’ health care.

But beware: A ‘public option’ is worse

In recent months, the left has coalesced behind a plan that died in the Democratic Congress back in 2009: The so-called “public option.” It’s essentially a government-run health insurance plan that competes with private health insurance providers.

Public option would eliminate competition, not increase it. A government-run health-insurance plan would be backstopped by the American taxpayer, meaning it could rob the rest of us to pay for those who buy its plans, deceptively making them appear more affordable in the short run.

Consumers would naturally flock to this sleight of hand. Within several years, the public option would effectively eliminate the private health-insurance market, ushering in an unprecedented era of government control of health care.

Yet as we have seen everywhere single-payer has been tried, it inevitably leads to rationed care and worse health outcomes for patients — essentially what’s happened with Medicaid here in America.

Few things are more frightening for the future of American health care. Obamacare’s critics were right to predict that it would enter a death spiral; Arizonans are now experiencing it firsthand. Now we must ensure that its death spiral doesn’t take us down an even darker road.

Jeffrey A. Singer practice general surgery in Phoenix and is an adjunct scholar at the Cato Institute.


We encourage you to Share our Reports, Analyses, Breaking News and Videos. Simply Click your Favorite Social Media Button and Share.

Report abuse


Your Comments
Question   Razz  Sad   Evil  Exclaim  Smile  Redface  Biggrin  Surprised  Eek   Confused   Cool  LOL   Mad   Twisted  Rolleyes   Wink  Idea  Arrow  Neutral  Cry   Mr. Green

Total 1 comment
  • Detergent

    All true. So what next? Continuing Obamacare takes us in short order to the “public option,” short for socialized medicine. Eliminating Obamacare takes us in short order to expansion of Medicaid to serve all but the relatively well-off who can afford the prices of private plans, those prices being continuously inflated to cover the cost of non-payers filling the emergency rooms.

    I just don’t see a good solution.

Top Stories
Recent Stories



Top Global

Top Alternative




Email this story
Email this story

If you really want to ban this commenter, please write down the reason:

If you really want to disable all recommended stories, click on OK button. After that, you will be redirect to your options page.