New report on Obamacare claims that premiums will go up 100% to 400%

From the Washington Examiner.

Excerpt:

Internal cost estimates from 17 of the nation’s largest insurance companies indicate that health insurance premiums will grow an average of 100 percent under Obamacare, and that some will soar more than 400 percent, crushing the administration’s goal of affordability.

New regulations, policies, taxes, fees and mandates are the reason for the unexpected “rate shock,” according to the House Energy and Commerce Committee, which released a report Monday based on internal documents provided by the insurance companies. The 17 companies include Aetna, Blue Cross Blue Shield and Kaiser Foundation.

The report found that individuals will face “premium increases of nearly 100 percent on average, with potential highs eclipsing 400 percent. Meanwhile, small businesses can expect average premium increases in the small group market of up to 50 percent, with potential highs over 100 percent.”

[...]It concluded: “Despite promises that the law will lower costs, [Obamacare] will in fact cause the premiums of many Americans to spike substantially. The broken promises are numerous, and the empirical data reveal that many Americans, from recent college graduates to older adults, will not be able to afford the law’s higher costs.”

In other news, Congresswoman Michele Bachmann led the Republican-controlled House of Representatives to pass a bill to repeal Obamacare. However, the bill is not expected to pass in the Democrat-controlled Senate. Elections matter.

Filed under: News, Costs, Health Insurance, Health-care, Insurance, Obamacare, Premium, Socialism

New study: Obamacare will raise cost of medical claims by 32%

From Yahoo News. (H/T Ted Cruz)

Excerpt:

Insurance companies will have to pay out an average of 32 percent more for medical claims on individual health policies under President Barack Obama’s overhaul, the nation’s leading group of financial risk analysts has estimated.

That’s likely to increase premiums for at least some Americans buying individual plans.

The report by the Society of Actuaries could turn into a big headache for the Obama administration at a time when many parts of the country remain skeptical about the Affordable Care Act.

While some states will see medical claims costs per person decline, the report concluded the overwhelming majority will see double-digit increases in their individual health insurance markets, where people purchase coverage directly from insurers.

The disparities are striking. By 2017, the estimated increase would be 62 percent for California, about 80 percent for Ohio, more than 20 percent for Florida and 67 percent for Maryland. Much of the reason for the higher claims costs is that sicker people are expected to join the pool, the report said.

[...]Obama has promised that the new law will bring costs down. That seems a stretch now. While the nation has been enjoying a lull in health care inflation the past few years, even some former administration advisers say a new round of cost-curbing legislation will be needed.

Yes. The government will have to cut costs by rationing care, based on political expediency. Obamacare was nothing but a government takeover of health care, designed to allow the government to buy votes by redistributing wealth via health care. That was the goal.

Filed under: News, Costs, Coverage, Government, Health-care, Insurance, Medicine, Nationalization, Obamacare, Redistribution, Single-Payer, Socialism

How does Obamacare cause medical premiums to rise?

The facts are not in dispute – Obamacare will make health insurance premiums go up.

The Wall Street Journal explains what will happen to medical insurance premiums as more of Obamacare is implemented in 2014.

Excerpt:

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.

[...]We compared the average premiums in states that already have ObamaCare-like provisions in their laws and found that consumers in New Jersey, New York and Vermont already pay well over twice what citizens in many other states pay. Consumers in Maine and Massachusetts aren’t far behind. Those states will likely see a small increase.

By contrast, Arizona, Arkansas, Georgia, Idaho, Iowa, Kentucky, Missouri, Ohio, Oklahoma, Tennessee, Utah, Wyoming and Virginia will likely see the largest increases—somewhere between 65% and 100%. Another 18 states, including Texas and Michigan, could see their rates rise between 35% and 65%.

While ObamaCare won’t take full effect until 2014, health-insurance premiums in the individual market are already rising, and not just because of routine increases in medical costs. Insurers are adjusting premiums now in anticipation of the guaranteed-issue and community-rating mandates starting next year. There are newly imposed mandates, such as the coverage for children up to age 26, and what qualifies as coverage is much more comprehensive and expensive. Consolidation in the hospital system has been accelerated by ObamaCare and its push for Accountable Care Organizations. This means insurers must negotiate in a less competitive hospital market.

Although President Obama repeatedly claimed that health-insurance premiums for a family would be $2,500 lower by the end of his first term, they are actually about $3,000 higher—a spread of about $5,500 per family.

But why? How does it happen?

Investors Business Daily has a look at the chain of causation.

Excerpt:

For years, ObamaCare critics focused on its least popular feature — the mandate that everyone buy insurance — taking their fight all the way to the Supreme Court.

But as ObamaCare’s official launch date approaches, even its backers are beginning to admit that the law could actually create powerful incentives for millions of people and thousands of businesses to drop their coverage, despite the mandate.

There is growing concern, for example, that the law’s market reforms will cause a huge “rate shock,” particularly for those young and healthy.

A February survey of major health insurance companies in five cities across the country found that they expect premiums for this group to climb an average 169%.

The cause of this rate shock is simple: ObamaCare imposes what is called “community rating” on insurance companies, effectively forcing them to charge the young and healthy more so they can charge older and sicker consumers less.

The five-city survey, for example, found that while the law will jack up rates for the young, it will lower them an average 22% for older and sicker customers.

At the same time, ObamaCare also forbids insurance companies from turning anyone down — a reform called “guaranteed issue” — which also will provide an incentive for some to drop coverage, knowing they can get it back any time.

“Even with the tax penalty … some healthy people would avoid purchasing coverage until they are sick,” Howard Shapiro, director of public policy at the Alliance of Community Health Plans, told regulators .

The problem is that if the young and healthy drop coverage, the result would be what the industry calls a “death spiral.” Premiums will climb as the pool of insured gets sicker, causing still more to cancel their policies.

This is just what happened in states that imposed strict community rating and guaranteed issue reforms in the past. In fact, of the eight states that did so, most ended up either dropping the reforms or loosening the rules after they saw enrollment decline and premiums climb.

It’s very important to understand that what Obama did with his health care plan will not cause premiums to go down. On the contrary, they have gone up and they will go up.

Filed under: News, Costs, Coverage, Employee, Employer, Health Insurance, Health-care, Inflation, Insurance, Medical Insurance, Obamacare, Premium, Prices

Obamacare’s new tax on medical devices trickles down to hospitals and patients

From the Wall Street Journal.

Excerpt:

Small medical-device makers have little choice but to pass their new 2.3% excise tax— meant to pay for the health law —on to hospitals and other customers, said the chief executive of one manufacturer that began surcharging hospitals for its wares on Jan. 1.

“The government thinks we’re just going to absorb these costs, but for a company like us, it’s a lot of money,” said Kevin Rudolph, the chief executive of the family-run respiratory valve maker, Hans Rudolph Inc. Instead, he said, device makers will be raising prices or adding surcharges to bills— just like other companies that faced excise taxes in the past.

In a December letter to several thousand hospital customers, Mr. Rudolph told hospitals his company would add a new line item for the tax beginning on Jan. 1. Hospitals and group-purchasing organizations began protesting last week as similar warnings from other device makers began piling up, the Wall Street Journal reported Saturday.

The tax is meant to raise $30 billion to help cover the health law. The device industry has lobbied to repeal the tax, which applies to sales, rather than profits. The recent clashes between hospitals and device makers underscores the breadth of the tax: It applies to companies that make big ticket items such as pacemakers and hip implants, as well as smaller firms selling surgical tools or making the plastic tubes, clips and valves that are ubiquitous in hospitals and nursing homes.

Mr. Rudolph said his firm had opted to tell hospitals upfront they’d be charged for the tax, rather than sneaking it into price increases. “I think it’s better for the customer to know what’s going on, even if they don’t like it,” he said Monday.

Hans Rudolph Inc. typically makes a 4% to 6% profit on about $5 million to $6 million in annual sales, Mr. Rudolph said. The 53-year-old Shawnee, Kan., company was founded by Mr. Rudolph’s father, and grandfather, Hans. The two elder Rudolphs built the company out of a Kansas City, Mo., basement, where Hans devised several respiratory devices. Key products still include spirometry components, for the common breath test in which patients are asked to exhale into plastic tubes.

Though the company has done well, Mr. Rudolph said, it can’t afford the tax. “We just like people to understand that the government is imposing this tax on us, so the cost of medical devices is going up,” he said.

I think that the lesson to learn here is that big government socialism doesn’t reduce the cost of anything by raising taxes on job creators. Those anti-business taxes just get passed onto consumers. In some cases, the business moves abroad or at least expands abroad, instead of staying in high tax environments. There was a plan put forward by the Republicans to reduce the costs of health care by introducing free market forces of choice and competition. Free market forces reduce the costs of all our other consumer goods, while improving the quality. Just think of computers and cell phones that are always getting better for less money. But Americans rejected that plan for Obama’s big government plan. We thought we would escape the costs of health care by taxing and regulating the providers of health care. But we were wrong. In the end, we’ll pay for it.

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Filed under: News, Costs, Coverage, Employee, Employer, Health Insurance, Health-care, Inflation, Insurance, Medical Device, Medical Device Tax, Medical Insurance, Obamacare, Premium, Prices, Socialism

Medical premiums will continue to rise as Obamacare is implemented

The Wall Street Journal explains what will happen to medical insurance premiums as more of Obamacare is implemented in 2014.

Excerpt:

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.

[...]We compared the average premiums in states that already have ObamaCare-like provisions in their laws and found that consumers in New Jersey, New York and Vermont already pay well over twice what citizens in many other states pay. Consumers in Maine and Massachusetts aren’t far behind. Those states will likely see a small increase.

By contrast, Arizona, Arkansas, Georgia, Idaho, Iowa, Kentucky, Missouri, Ohio, Oklahoma, Tennessee, Utah, Wyoming and Virginia will likely see the largest increases—somewhere between 65% and 100%. Another 18 states, including Texas and Michigan, could see their rates rise between 35% and 65%.

While ObamaCare won’t take full effect until 2014, health-insurance premiums in the individual market are already rising, and not just because of routine increases in medical costs. Insurers are adjusting premiums now in anticipation of the guaranteed-issue and community-rating mandates starting next year. There are newly imposed mandates, such as the coverage for children up to age 26, and what qualifies as coverage is much more comprehensive and expensive. Consolidation in the hospital system has been accelerated by ObamaCare and its push for Accountable Care Organizations. This means insurers must negotiate in a less competitive hospital market.

Although President Obama repeatedly claimed that health-insurance premiums for a family would be $2,500 lower by the end of his first term, they are actually about $3,000 higher—a spread of about $5,500 per family.

The big concern I have about all of these socialist schemes is that the public will not connect rising prices to Obama’s policies. We have been printing money (inflation), running huge deficits, imposing taxes and regulations on businesses, and so on. All of this will causes the prices that consumers pay for goods and services to go higher.

When the prices of goods and services go higher, the people who voted for Obama won’t make the connection between his policies and the rising prices. We have reached a point where a majority of the American public is as ignorant of basic economics as the peasant populations that elect communist governments. We are ready for government-controlled economy and central planning, because we can’t make the connection between cause and effect.

Filed under: News, Costs, Coverage, Employee, Employer, Health Insurance, Health-care, Inflation, Insurance, Medical Insurance, Obamacare, Premium, Prices