Fix Health Care Policy

Obamacare: The Price Controls Begin

The Department of Health and Human Services announced Tuesday that, starting next year, health insurance companies must receive permission from the Obama administration before they can raise rates higher than 10%. As we warned before Obamacare even became law, this is a form of price control, a government intervention that has a long and well established history of failure.

Way back in 1993, Heritage Foundation scholar Heritage’s Ed Haislmaier was detailing the shortcomings of price controls in health care:

“Price controls would not work in health care because they attack the symptoms of runaway costs, not the cause. Medical costs today are soaring because consumers are largely insulated from them…and because the tax system discourages consumers from seeking good value for money in health care.” (Read more at The Foundry…)

Tags: health insurance, medical costs, ObamaCare, price controls, tax treatment

Side Effects: The Beginning of the End for FSAs

“If you like your current health coverage, you can keep it.” It was a key promise of Obamacare.

But the new law gives government a say in everything from the benefits you carry to the treatment you receive. And that means very real changes to existing coverage. One of those many changes derive from new restrictions on flexible spending accounts (FSAs).

FSAs allow users to put aside pre-tax dollars for out-of-pocket health expenditures such as co-pays, deductibles, eyeglasses, and dental work. Typically, it cuts out-of-pocket costs by around 20 percent. FSAs are especially valuable for consumers with chronic illness and others who have large foreseeable medical costs (families: think orthodontics!). And because FSA funds cannot be rolled over year to year, the accounts encourage responsible budgeting and use of health services. (more…)

Tags: co-pays, deductibles, Flexible Spending Accounts, medical costs, out-of-pocket costs, Side Effects