Fix Health Care Policy

New Study Shows Higher Health Care Costs under Obamacare

Despite President Obama’s assurances that his massive overhaul of the health care system would control health care costs and allow Americans to keep their current coverage, the outlook indicates otherwise. PricewaterhouseCoopers (PWC) recently released its annual report on medical cost trends for 2012, and it is revealing.

The report shows health care costs and premiums continuing to rise—and uncertainty increasing for employers who offer insurance to their workers. Health care spending increased by 7.5 percent in 2010 and will grow by 8 percent this year. In 2012, it will rise again by 8.5 percent. This is exactly the opposite of the President’s promise that his health care plan would reduce premiums by $2,500 per person.

Even steeper rises in the cost of private insurance are possible, due to Obamacare’s reductions in Medicare payment rates and its expansion of the Medicaid program. PWC writes, “Hospitals and health plan executives agree that when Medicare and Medicaid pay less than costs, private payers must make up the difference.” The new law will cut provider payment rates across the board, which Medicare’s Chief Actuary warns could cause 15 percent of hospitals, skilled nursing facilities, and home health agencies to become unprofitable by 2019. As more Americans enroll in Medicaid in place of other forms of coverage, providers will face lower reimbursement for a greater number of patients. According to the report, the impact of these changes will likely mean greater cost-shifting to privately insured patients—indirectly increasing premiums. (Read the rest on The Foundry…)

Tags: health insurance premiums, Medicaid, Medicare, ObamaCare, PricewaterhouseCoopers

Side Effects: Now Even Democrats Are Voicing Concern About Obamacare’s Consequences

Imagine that one day, your boss takes you out to coffee. You offer to pick up the tip as a contribution. The two of you head down the street and are faced with quite the conundrum: two coffee shops to choose from! Both offer a delicious cup of joe for the same price, but in front of one, a benevolent gentleman who calls himself Uncle Sam (weird, right?) offers you a coupon for 50 percent off, so both you and your boss will save. Which coffee shop do you think your employer would take you to?

This is not a trick question. The scenario described above captures how employers are likely to react to incentives created by Obamacare to dump employer coverage, as Governor Philip Bredesen (D–TN) explained recently in The Wall Street Journal. (more…)

Tags: health insurance premiums, ObamaCare, Side Effects, taxpayer-funded subsidies, Tennessee Gov. Philip Bredesen

Obamacare vs. the Rule of Law

Health Insurers Plan Hikes. That was the headline of a Wall Street Journal story last Tuesday which reported: “Health insurers say they plan to raise premiums for some Americans as a direct result of the health overhaul in coming weeks, complicating Democrats’ efforts to trumpet their signature achievement before the midterm elections. Aetna Inc., some BlueCross BlueShield plans and other smaller carriers have asked for premium increases of between 1% and 9% to pay for extra benefits required under the law, according to filings with state regulators.” And The Wall Street Journal was not alone. The Los Angeles Times and Dallas Morning News also reported rate hikes in their states, some as high as 16%. And this comes on top of news that Obamacare is forcing health care companies to stop offering coverage for kids and forcing colleges to stop offering coverage for students.

Obamacare is deeply unpopular with the American people because, as the massive regulatory regime goes into effect, the American people are noticing that none of the administration’s promises are being honored. The cost of health care is going up, not down. Health care spending is going up, not down. Millions of Americans are not able to keep their insurance. To combat this reality, the Obama administration struck back last Friday. Health and Human Services Secretary Kathleen Sebelius sent a letter to America’s Health Insurance Plans warning them that “there will be zero tolerance” for “falsely blaming premium increases” on Obamacare. Specifically, Sebelius threatened to punish non-subservient firms by excluding them from the government regulated and mandated health insurance exchanges. Since these exchanges will be the primary way most Americans receive health insurance (especially if more private firms decide to end their current coverage) such a decision by Sebelius would be a death sentence for any insurer that does not comply.

Never before in the history of our republican form of government has an administration threatened to extinguish individual firms for merely communicating with their customers. But such are the dictatorial powers Obamacare grants to Secretary Sebelius. There are over 1,000 instances in the more than 2,700 page bill where Congress granted Secretary Sebelius new powers to regulate the health care industry. For example, her power to “determine” what does or does not count as a medical expense alone will decide the fate of many health insurance firms. (more…)

Tags: dictatorial powers, health insurance premiums, HHS Secretary Kathleen Sebelius, higher rates, ObamaCare

New Bill Not Necessary: Public Option Already in Obamacare

Like many federal efforts in Washington, last week’s reintroduction from House Democrats to create a public health insurance option, which would become part of the 2014 insurance exchanges created by Obamacare, is a bureaucratic redundancy. Stuart Butler points out that the health reform law already has its own “public option” through expanded powers to the Office of Personnel Management (OPM).

Calling the House bill a “smokescreen” for the nation’s opposition against a public option, Butler says the real story is in the “OPM alternative.” “Far from being an alternative, it is the fast road to a public plan — as I warned before the legislation passed. Why? Because the ‘alternative’ gives the OPM the power to establish national plans. These are to be private — but in name only.”

With “enormous reserve powers,” the federal government would be able to set premiums that would drive other private health insurers out of the market, leaving Americans with no choice but to enroll in the government-mandated health plan.

Tags: health insurance premiums, ObamaCare, Office of Personnel Management, private insurers, public option

Heritage President Ed Feulner Responds to President Obama’s Claims

President Obama this morning cited The Heritage Foundation’s research in an attempt to sell his health care package as a “middle of the road, centrist approach.” We take great exception to this misuse of our work and abuse of our name. This is but the latest act in a campaign to sell this big-government program as a moderate law that incorporates conservative ideas. Americans should not be fooled.

Let’s be very clear: We oppose this new law because it is a radical new intrusion into the daily lives of all Americans and a massive takeover of one-sixth of the U.S. economy. We view the President’s health care law as inimical to our national interests and offensive to the historic American dedication to the principle of self-government.

Our research has shown that President Obama’s health approach is financially unsustainable and will ultimately lead to health care rationing, a lower quality of care and a greater degree of dependence on government. We deplore those outcomes and are committed to making the intellectual case for this law’s repeal.
What part of that does President Obama not understand?

Specifically, President Obama told NBC’s Today Show host Matt Lauer that a centerpiece of his health care package, “in terms of the exchange, just being able to pool and improve the purchasing power of individuals in the insurance market—that originated from The Heritage Foundation.”

But the President knows full well—or he ought to learn before he speaks—that the exchanges we and most others support are very different from those in his package. True exchanges are simply a market mechanism to enable families to choose their health insurance. President Obama’s exchanges, by contrast, are a vehicle to introduce sweeping regulation and federal standardization on health insurance. (more…)

Tags: big-government program, health insurance exchanges, health insurance premiums, Heritage President Edwin Feulner, IRS, President Barack Obama

VIDEO: Solving Pre-Existing Conditions Doesnt Take 2,700 Pages

Ed Haislmaier, Senior Research Fellow at The Heritage Foundation’s Center for Health Policy Studies, takes on the 2,700 pages of Obamacare — and the notion that all that legislation is needed to fix the problem of pre-existing conditions.

As Haislmaier explains, Congress could solve the pre-existing conditions problem quite simply and in only two pages. How? Watch this video to find out.

Tags: health insurance premiums, ObamaCare, pre-existing conditions

The Truth about Rising Health Insurance Premiums

Congress and its allies on the left are hell bent to overhaul the health care of every American. They have focused strongly on increasing regulation of insurance companies. They get the most of the blame for increasing premiums and skyrocketing health spending. Though certain targeted and technical reforms of the health insurance market are sorely needed, making insurers the scapegoat for out-of-control costs in our current health system misses the point.

Recent premium increases in health plans offered by Anthem Blue Cross in California have attracted federal scrutiny of insurers, but experts attribute increases to external factors beyond the control of insurance companies. New state mandated benefits increase the minimum level of coverage an individual can purchase. As Americans embrace frugality in response to high unemployment and economic hardship, many choose to forego health insurance, especially among younger and healthier populations. Removing these individuals from insurance risk pools leaves behind a greater concentration of sick and costly patients, so that insurers have little choice but to increase premiums in order to maintain solvency. (more…)

Tags: Health Affairs, health insurance premiums, Health Insurance Rate Authority, President's proposal

The President’s Health Summit Proposal: Rhetoric vs Reality

The President’s health care proposal contains little that is new. The well tested rhetoric used by the White House to sugarcoat the health policy outline should not fool ordinary Americans. This proposal is even more expensive than the Senate bill upon which it is apparently based: $950 billion over ten years rather than $871 billion.

Consider the claims made by the White House regarding the effects of the President’s proposal on the health care system.

The Rhetoric on Affordability.
“It makes insurance more affordable by providing the largest middle class tax cut for health care in history, reducing premium costs for tens of millions of families and small business owners who are priced out of coverage today.”

The Reality: In fact, the tax credit would be limited to only a limited number of persons within a limited set of income brackets, not the entire middle class. One cannot ignore the tax increases, or the prescribed cost of the health care benefits packages themselves. As the premiums increase, the cost of the subsidies, based on percentage of income, would track these increases, resulting in another direct cost shift onto all taxpayers. In fact, the President’s proposal, based on the Senate bill, would result in major tax increases (estimated at $629 billion over ten years) and would include a variety of middle class tax increases. This, of course, once again violates the president’s promise to refrain from imposing taxes on those with family incomes of less than $250,000 per year. (more…)

Tags: budget, Health Care Summit, health exchange, health insurance premiums, pre-existing conditions, President's proposal, tax increases

President’s Proposal Introduces “AIG Risk” in Federal Insurance Rate Regulation

The White House has just issued an 11 page concept paper (PDF) for yet another health care bill that, among other items, includes a proposed new Federal “Health Insurance Rate Authority.” The Administration has yet to provide any legislative language on how this new Federal regulatory regime would operate, but based on statements by the President and other officials, as well as similar provisions included in the bills already passed by the House and Senate, there is good reason for concern as to whether the President and Congress really know what they are doing in this regard.

The President and the Congressional leadership assert that health insurer rate increases are unjustified and point to some cases of recent double-digit increases announced by certain insurers. But so far they have offered no explanation of what portion of those increases they think are unjustified or their reasons for taking such a position. (more…)

Tags: federal regulatory powers, health insurance premiums, policyholders, President's proposal, price controls

New York Post Editorial: Reform Leads to More Uninsured

In an editorial in the New York Post, former HHS Secretary Michael Leavitt and Pacific Research Institute senior fellow Jeffrey Anderson detail how the Senate Finance Committee bill would reduce the number of insured Americans. By mandating that all Americans get health insurance at the same price or face fines that are considerably lower, the two argue most Americans would pay the fine until they got sick or injured. The problem is that everyone else’s health insurance premiums would jump, they said.

“Every American deserves to have access to an affordable insurance policy, and there are people with prohibitively expensive preexisting conditions who can’t afford coverage and need help. But there are ways to solve this problem that wouldn’t dramatically raise everyone else’s premiums. And there are far better ways to solve the problem than to give millions of insured Americans a strong incentive to quit carrying insurance year-round.”

Tags: health insurance premiums, individual mandates, preexisting conditions