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Obamacare Exchanges Open: Beware of the ‘Death Spiral’

Obamacare Exchanges Open: Beware of the ‘Death Spiral’

It's finally here. Three-and-half years after the Affordable Care Act was signed into law, the Obamacare health care exchanges are up and running — sort of.

In the weeks leading up to the October 1 launch, we've seen small businesses receive a one-month reprieve, heard reports about unqualified and unscreened "facilitators" helping people sign up, and witnessed the emergence of entire websites dedicated to pointing out failures of the controversial program.

According to Les Funtleyder, health care strategist at Poliwogg, the next few days, weeks and months will highlight many unintended consequences and reveal very little in terms of actual activity or enrollment.

Related: What Every Investor Needs to Know About Health Care

"Given how polarized our politicians are, every glitch is going to be magnified," Funtleyder says in the attached video. "I think we're going to see a lot of news about glitches, and I don't think we're going to see a lot of good news in the next month or so."

Funtleyder will be watching a few key factors, such as the number of young people that actually enroll, as well as the amount of people who get pushed out of the commercial system and into the new online shopping service.

The real test, however, won't come until next year. Funtleyder and others will have to wait and see if the largest social program ever made will take flight or enter a ''death spiral" — a lethal condition in which claims outpace enrollment and, in turn, force premiums to go up and future enrollment to dry up."What will bust [Obamacare] is if we get an imbalance of sick versus not-sick [enrolled patients]," he says. As far as the success or failure of the program, Funtleyder says, "We probably won't know that for another two years."

Related: Obamacare Is GREAT for My Business, But Awful for America! Says Funk

While most people are focusing on the initial three-month sign-up period and the January 1 launch, Funtleyder says the open enrollment period actually goes until March 30, at which point we should have a pretty good handle on how it's going.

He says the big story next year will be the degree to which people who are currently commercially insured get moved back into the individual market, be they Walgreen employees or IBM pensioners.

"Not everybody is going to be happy about it," he says.

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