My reasoning is simple. Insurance companies now have to enroll people who are already sick, but who have paid them nothing, and the rest of us have to pick up the check. This is the functional equivalent of waiting to buy car insurance until AFTER you have wrecked your car, then fully expecting the company to reimburse you.
Smart people will simply drop their coverage (if it costs more than the penalty), which means less will be paid into the system. At the same time, costs will go up, because people are showing up at the proverbial doorstep with cancer, or heart disease, an HIV infection, or who knows what. Those people will pay their premiums, if able; otherwise, the government, meaning us and our creditors, will pick up the difference.
Insurance companies cannot store money away for bad years. They are limited by law to roughly 15% of income having to cover both operational costs as well as profit. Practically, they will likely overcharge, then rebate the excess at the end of the year if their costs were lower than anticipated. I have already received one of those checks.
But the point is clear: costs will go up because they HAVE TO, because they are no longer providing insurance, but rather a social service. More is being provided, and that has a cost.
Quite literally, the insurance companies are being made an extension of Medicaid, and our increases in premiums are effectively TAX increases. If we consider that Medicaid, itself, is being vastly expanded under Obamacare, it really boggles my mind how any sane human being could support this monstrosity.
Answer: they couldn’t and they don’t.