Thursday, October 7, 2010

About that cost curve....

(This post has been bumped from a scheduled post to real-time as the addendum at the bottom relates directly to late-breaking matters with respect to ObamaCare and McDonald's)

One of the main selling points in pushing ObamaCare was that it would bend the cost curve downward. That notion just months after ObamaCare's passage looks to be going down in a flaming wreck across the board and across the nation.

Despite assurances from the Obama administration that the recently signed healthcare reform law would save Americans money, benefit professionals are seeing huge medical premium hikes and decreased benefits.

Employers and ultimately taxpayers could get sticker shock as plans companies begin to renew their medical benefits packages for 2011.

A Manhattan health benefits consultant says insurance companies are telling employers they will pay have to pay much more in 2011 -- and for reduced coverage.

"It should be noted that premium increases were in excess of 30 percent over the previous year," said Barbara Brody of Barbara A. Brody & Associates. Brody said average rate increases next year for Manhattan-based firms she advises could be as high as "67 percent but will average 30 percent."

That's because insurance companies, faced with higher costs after the passage of a giant health reform measure, plan to pass most of the costs onto consumers, according to several industry observers.

Of course, this isn't rocket science. When you dump 30 million more people onto the healthcare roles and you legislate that the health insurance providers can no longer deny people with pre-existing benefits, that is certainly going to cost more and health insurers, with profit margins in the 2 to 6% range simply cannot absorb that and will pass it along to its customers in the form of higher premiums. That's the way things work in the real world as opposed to the Harvard faculty lounge.

But perhaps Team O knew this but completely miscalculated how soon the market reaction would occur, as in, they did not anticipate this reaction until after the mid-terms.

Just this week McDonald's said it may drop its health-care plan for 30,000 employees unless it gets a waiver on the annual coverage.

However, a spokesman for the Obama administration says the benefits of the recently signed Patient Protection and Affordable Care Act, designed in part to provide health insurance to tens of millions of Americans without coverage, will be phased in over the next decade.

Color us confused. McDonald's is threatening to drop coverage for these low-end wage-earners precisely because of the additional coverage they will be forced to provide their employees that will be phased in over the next decade. This concept is lost on either the writer of the article or Team O.

And this business with McDonald's should serve as a warning. What was already the most politicized piece of legislation in recent history what with its kickbacks and special deals and exemptions will become only more so now that businesses will lobby and lobby hard to get themselves exempted from the onerous provisions of ObamaCare once they figure out what is coming their way.

We suppose this was what was meant when they told us that we needed to pass the bill now so we can "fix it" and make it better in the future.

(Addendum #1): And as if on cue...

Nearly a million workers won't get a consumer protection in the U.S. health reform law meant to cap insurance costs because the government exempted their employers.
Thirty companies and organizations, including McDonald's (MCD) and Jack in the Box (JACK), won't be required to raise the minimum annual benefit included in low-cost health plans, which are often used to cover part-time or low-wage employees.

The Department of Health and Human Services, which provided a list of exemptions, said it granted waivers in late September so workers with such plans wouldn't lose coverage from employers who might choose instead to drop health insurance altogether.

Without waivers, companies would have had to provide a minimum of $750,000 in coverage next year, increasing to $1.25 million in 2012, $2 million in 2013 and unlimited in 2014.

An alternate to the very first sentence of the news item would be: "Nearly a million workers won't get dumped from their companies' health plans as those companies have been exempted from provisions levied upon them by ObamaCare that otherwise would be too onerous."

"The big political issue here is the president promised no one would lose the coverage they've got," says Robert Laszewski, chief executive officer of consulting company Health Policy and Strategy Associates. "Here we are a month before the election, and these companies represent 1 million people who would lose the coverage they've got."

The United Agricultural Benefit Trust, the California-based cooperative that offers coverage to farm workers, was allowed to exempt 17,347 people. San Diego-based Jack in the Box's waiver is for 1,130 workers, while McDonald's asked to excuse 115,000.

Bingo! ObamaCare is not about health care. It never has been - it is and will continue for ever more to be about politics and the wielding of political muscle. What is it about the above that indicates anything other?

And what about the self-employed, individuals, students and small businesses that purchase similar low premium/low benefits plans that McDonald's does? Will they be exempted as well? Please. They won't because they have no juice up on the Hill. This is precisely what we were talking about when we said the most politicized piece of legislation ever will become even more politicized.

Mark it down: As Laszewski alluded to above, the regime will spin this as some sort of victory for the little guy working for the big slavish corporations. As if, through their benevolence they have let the workers keep the health care plan they already have.

This abortion is a full 3-4 years away from full implementation and already the jockeying, greasing and currying of favors has begun.

(Addendum #2): Capt. Ed adds:

The Rule of Law depends on an environment with clear regulation and unbiased enforcement. From the start, ObamaCare lacked any clarity in regulation. Congress filled the bill with the phrase “The Secretary shall determine” in place of establishing rules and regulations for the massive regulatory regime Congress created. Now, the White House has added arbitrary enforcement to uncertain regulation and opaque processes. This is not the Rule of Law, but the Whim of Autocracy.

To which commenter Washingtons Wake responds:
This is an example of the crushing hand of tyranny – not whim of autocracy

Exit question(s): How deliciously perverse would it be for tea partiers to protest Jack in the Box headquarters here in San Diego for not offering all their workers all the benefits of ObamaCare as so graciously bestowed upon us by our minders in the regime? After all, isn't it about equality?

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