So, what was the point of all of this, again? Oh, that's right... to bend the cost curve downward.
The cost of health insurance has surged in the US this year, according to a survey of employers, dealing a blow to claims by the Obama administration that healthcare legislation introduced last year would curb costs.
Insurance premiums for family health benefits in 2011 jumped 9 per cent from a year ago to $15,073, according to a study released on Tuesday by the Kaiser Family Foundation. That represented a sharp acceleration from 2010, when premiums rose by a modest 3 per cent, and easily outpaced a 2 per cent rise in wages.
“This year’s 9 per cent increase in premiums is especially painful for workers and employers struggling through a weak recovery,” said Drew Altman, Kaiser’s chief executive.
Health insurance premiums have more than doubled during the past decade and, although the survey reveals some of the early impact of the law, it does not provide reasons for the increase.
Kaiser said that it was beginning to see changes in preventative care benefits and many companies were enrolling young adults into corporate health plans plans because of the law. However, it said that most workers that were already enrolled in company plans are exempt from the law’s provisions.
Matthew Borsch, healthcare analyst at Goldman Sachs, said the increase could be due to the high rate of increase in family coverage, due to a new provision allowing people up to the age of 26 to join their parents’ plan, creating additional costs. He also noted that some measures in the law that were intended to contain costs were watered down.
This shouldn't be a big mystery, gang. You add coverage for tens of millions of people in the healthcare system and increase the regulatory burden on private health insurers and you think that will result in controlling or even lowering health care costs?
The Obama administration offered a rebuttal of the study, arguing that premiums were set last year when insurers anticipated higher medical costs and that premium prices would decline as more provisions in the law were rolled out. Nancy-Ann DeParle, who is President Barack Obama’s deputy chief of staff, said that other measures showed healthcare costs declining and called out insurers for raking in profits.(italics, ours)
“The Kaiser report is informative but it’s a look backwards,” Ms DeParle said. “When we look to the future, we know that the Affordable Care Act will help make insurance more affordable for families and businesses across the country.”
Looking into the future is precisely what insurance companies are doing when they anlyze the tea leaves of 2014 when ObamaCare is rolled out in its full glory. It's called price signaling where anticipated costs are absorbed earlier to avoid real-time sticker shock.
Ms. DeParle employs the logic of an alternate statist reality where you go into debt to get yourself out of debt and you dig holes in the ground only to re-fill said holes to save or create jobs.
Fully anticipate more of the same sort of news on the health care front in the future.