Monday, January 14, 2013

Notable and Quotable:  Obamacare Health Premiums Sticker Shock
By  Merrill Matthews and Mark Litow, Resident Scholar Institute of Policy Innovation, Dallas, Past Chairman, of Social Insurance Public Finance Section of the Society of Actuaries, in the January 14, Wall Street Journal.
"Thanks to mandates that take effect in 2014, premiums in individual markets will shoot up. Some may double.
Health-insurance premiums have been rising—and consumers will experience another series of price shocks later this year when some see their premiums skyrocket thanks to the Affordable Care Act, aka Obamacare.
Central to Obamacare are requirements that health insurers (1) accept everyone who applies (guaranteed issue), (2) cannot charge more based on serious medical conditions (modified community rating), and (3) include numerous coverage mandates that force insurance to pay for many often uncovered medical conditions.
Guaranteed issue incentivizes people to forgo buying a policy until they get sick and need coverage (and then drop the policy after they get well). While Obamacare imposes a financial penalty—or is it a tax?—to discourage people from gaming the system, it is too low to be a real disincentive. The result will be insurance pools that are smaller and sicker, and therefore more expensive
Insurers know that the Obama administration will denounce premium increases as the result of greedy insurers, greedy doctors, greedy somebody.
But unlike the federal government, health insurers can’t run perpetual deficits. Something will have to give, which will likely open the door to making health insurances a public utility completely regulated by government, or the left’s real goal: a single-payer system.”
Comment:  Mark Bertolini, Aetna CEO,  the nation’s 3rd largest health insurance, says “We’re going to see some markets go up as much as 100%,”which makes you wonder if the motive in the first place behind the Accountable Care Act,  was to drive health insurers out of business and to replace them with government.  

This unprecedented health care inflation  is ironic in view of economist John Goodman’s 5 principles enunciated in his January 9 blog:  1) There is almost nothing the government can do that the private sector cannot do as well or better; 2) The few things government can uniquely do can be done without public insurance; 3 ) Most public insurance in this country is actually administered by private insurance companies; 4) Most people with public insurance are in private sector health plans; 5) It is only in the private sector that one finds anyone who has an incentive to lower costs without rationing care.

Another irony is that President Obama, after Affordable Care Act’s passed,  declared, “Everybody who’s looked at it says that every single good idea to bend the cost curve and start actually reducing health-care costs are in that bill.” Yet,  in 2014 costs will rise from the present 4.1% rate of growth and jump to 7.8% and 6.2% for the rest of the decade,

President Obama attributes health inflation to insurers and doctors who are greedy.
He says the sole cause behind his administration's actions is to protect the old and needy.

Not to the Affordable Care Act,

Which he unequivocally backed.

The facts speak otherwise, yes indeedy.

Tweet:  Thanks to certain provisions in the Affordable Care Act,  insurance premiums will shoot up even double, this year.

No comments: