Tuesday, September 2, 2014

ObamaCare Chain of Events Affecting Health Care Premiums

Chain of events is a number of actions that are contiguous and linked together.

Definition, Chain of events

In writing about ObamaCare, it is important to recognize that one thing leads to another.

The health law and the health exchanges have created a chain reaction:

• The older and sicker enrolled at the cost of the younger and healthier.

• The law’s one-size-fits-all coverage accepted all comers and prohibited questions about health status.

• These two factors created financial winners (the poor and the sick and hospitals) and financial losers (the older, the healthier, and the health plans).

• The health plans, anticipating losses, did two things: they struck a deal with government to bail them out against losses, and raised premiums for much of the middle class and most of the small group or individual markets.

• The government, to prevent heavy losses, priced premiums for health exchange plans, at Medicare or Medicaid levels well below private rates.

• Many physicians and physician groups, leery of government pricing, declined to accept members of the new health exchange plans; and health plans narrowed physician choice, by not accepting physicians with histories of charging higher rates: both events aggravated the already existing physician shortage.

• Many consumers, perhaps one of five, decided to go without health plans, and an estimated one of ten physicians began to abandon traditional practices for direct pay independent practices without third party coverage or to accept cash in addition to insurance.

• Some consumers elected to go directly to direct pay physicians because of lower rates, quick access, and absence of bureaucratic controls.

• ObamaCare enrollment in 2014 and anticipated enrollment in 2015 and beyond was projected to be 26 million by 2016.

• Health care premiums rose at an accelerated, but variable rates, throughout the land, along with the cost of businesses for covering them, more patients enrolled or were dumped into Medicaid, which grew at 15% or more a year.

• The insurance industry, at the request of consumers who could not afford higher rates and higher deductibles, began to rapidly offer more policies to supplement its health policies. The commercial insurance industry started to mimic Medicare, with its robust supplement policies offered through AARP and others.

• Businesses, which had previously insured 150 million workers, began to either cease coverage or minimize benefits, to cut losses, stay profitable, and satisfy investors.

In the words of a sage, “ You can never tell what will happen, with one thing always leading to another.”

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