WHY THE DEATH SPIRAL OF ZEROCARE IS IRREVERSIBLE

"Inconsistencies" have been found in the data supplied by 2.9 million of the 5.45 million people (53 percent) who enrolled in Obamacare via Healthcare.gov, the inspector general for the Department of Health and Human Services reported in June.

About 1.3 million concerned whether the applicant was a U.S. citizen, a million more whether the applicant qualified for a subsidy. About 2.6 million (89 percent) were unresolved as of the May 27.

The IG report covers only applicants through Feb. 23, doesn’t cover the 2.57 million (47 percent) who enrolled on state exchanges.

Income and eligibility questions accounted for 77 percent of "inconsistencies." If the same percentage applies to all 8.01 million signups, 3.2 million enrollees (41 percent) may be ineligible for subsidies, or ineligible, period.

The number may be less, because there could be multiple "inconsistencies" in the same application.

Or  more. A chart presented to the House Energy and Commerce Committee by SERCO, a contractor which handles Obamacare paperwork, showed 4.099 million "inconsistencies."

It will be many months, if ever, before these can be resolved, because HHS launched Healthcare.gov without establishing a system to verify eligibility, SERCO said.

People who got subsidies to which they weren’t entitled will have to repay them. Up to a million could get a nasty surprise at tax time next year.

"I have this sick feeling that there are these people out there who have made unintentional errors, and in a few years will be subject to massive tax bills," Jessica Waltman, an executive at the National Association of Health Underwriters, told the Washington Post.

Eighty seven percent who signed up on Healthcare.gov are getting subsidies, HHS said. They pay, on average, just 24 percent of the actual cost of their policies.  Subsidies will cost taxpayers $10 billion this year, the Congressional Budget Office estimated, $16.5 billion if those who enrolled on the state exchanges qualify at the same rate.

About 85 percent of Obamacare enrollees paid their first month’s premium, a requirement for actually being insured, health insurance companies say. But in every month since, the number paying their premiums has dropped by 2 or 3 percent. If the trend continues, by the time the fiscal year ends Sep. 30, only around 6 million will be insured.

It’s likely to accelerate. Premium hikes for 2015 are expected to average about 13 percent, though amounts may vary significantly from state to state.

In a Kaiser Family Foundation survey last month, 43 percent of respondents said it is "somewhat difficult" for them to pay their premiums, with 14 percent saying it was "very difficult." Since 87 percent get subsidies equivalent to 76 percent of the cost of their policies, this is remarkable.

Many will be unable, or unwilling, to make payments after another double digit rate hike. And I wouldn’t bet on a high renewal rate among those who get socked with a big tax bill.

If around half of the 2.3 million with "inconsistencies" in the financial or citizenship data they supplied are found ineligible, by this time next year Obamacare enrollment could be down to fewer than five million mostly sick, mostly poor people.

Which means still higher insurance premiums and more taxes for Americans who aren’t as sick or as poor. As premiums rise, fewer will pay them. The "death spiral" will be irreversible.

Revenue from the individual and employer mandates was supposed to (partially) offset the cost of the subsidies, but the president postpones implementation (illegally), because they would make a wildly unpopular law utterly toxic.

To deflect the wrath of those injured by the law they alone voted for, Democrats talk about "fixing Obamacare." But it’s just talk. They’re rejected reforms passed by the House, proposed none of substance of their own.

A McKinsey survey found 56 percent of Obamacare shoppers didn’t buy a policy. Supporters of the law should think hard about this, said insurance expert Robert Laszewski.

You can only buy individual health insurance through Obamacare. You may be fined if you don’t buy a policy. Many who do get subsidies. Most people want to be insured. But most – including two thirds of those eligible for subsidies – still wouldn’t buy.

If they want to save at least parts of Obamacare (and keep themselves in office), its supporters need to  "address the reasons why people are not buying it," Mr. Laszewski said.  You can bet your farm they never will.

Jack Kelly is a former Marine and Green Beret and a former deputy assistant secretary of the Air Force in the Reagan administration. He is national security writer for the Pittsburgh Post-Gazette.

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