By Jim Hasley.

As mentioned previously; the 'If you like your plan you can keep your plan' process cannot exist with Obamacare. It is impossible. Insurance companies know this and state insurance commissioners know this. The National Association of Insurance Commissioners (NAIC) has officially taken a public stance the idea is implausible.

The President wants people who are already ill to be 'insured' without any exclusions or additional premium to account for their adverse risk. This flies in the face of actuarial science because you can't use the law of large numbers to transfer the risk of an adverse event when much of the risk pool is comprised of people who are certain to experience adversity. This is why you can't insure your home as a hurricane is heading inland.

To minimize the impact of people who are already ill (those with pre existing conditions) the government needs a massive sample size to absorb the adverse selection created by sick people; hence the mandate. Even with a large sample size the inclusion of adverse risk insureds requires higher premiums.

Understanding the math behind insurance is easy: Say you have a group of 1,000 healthy people where the chance of a $2 million medical claim is 1 in 1,000. Divide the total loss by the number of insureds and the premium required is $2,000. Add in a few sick people driving the risk of loss to 3 in 1,000 and the premium required is $6,000. This is why individually underwritten insurance where sick people can be rated up or excluded for adverse selection is so much less expensive than group insurance where pre-existing conditions are covered after one year.

In the group insurance world employers pay a portion of employee's premiums so the net cost of coverage to participate in a group plan is less than what a healthy employee can purchase individual insurance for outside the group plan. In some cases, especially for young people, the cost for an individual plan is still less than an employer subsidized plan. When young people start leaving a group insurance plan leaving a pool comprised of only older or unhealthy people, the cost per insured rises sharply for the remaining insureds. This phenomenon forcing employers to subsidize group plans to entice young and healthy people to remain part of the group has driven employers bananas for decades.

Essentially Obamacare is designed to create one big group insurance plan. The mandate and tax penalty for not having insurance is designed to drive healthy people into the plan. Tax subsidies for those in the exchange are designed to entice low income people into the plan. Forcing all health insurance policies to include lower deductibles and out of pocket costs is designed to homogenize the market place.

Things are falling apart because the healthy people are getting crushed by being forced into the Obamacare pool of adverse risk and they are not happy.

Folks nationwide are restating plan anniversaries for December 1, 2013 in the hope of avoiding Obamacare for one more year (to avoid 2014 Obamacare compliance) creating great strain on Obamacare enrollment. If healthy folks can permanently opt out of Obamacare by keeping their current plans all that remains is a huge pool of adverse risk and Obamacare premiums will skyrocket even further.

The President's signature effort is a disaster at best and likely dead. He just won't accept that the patient is terminal.