Tuesday, January 8, 2013

Looks like we'll be learning these lessons the hard way


America’s paper of record seems genuinely perplexed that the new health care law that mandates more benefits from health insurers and adds more people into the health care system, isn’t coming anywhere near the advertised goal of ObamaCare: bending downward the cost curve of health care.

Health insurance companies across the country are seeking and winning double-digit increases in premiums for some customers, even though one of the biggest objectives of the Obama administration’s health care law was to stem the rapid rise in insurance costs for consumers.

Particularly vulnerable to the high rates are small businesses and people who do not have employer-provided insurance and must buy it on their own.

In California, Aetna is proposing rate increases of as much as 22 percent, Anthem Blue Cross 26 percent and Blue Shield of California 20 percent for some of those policy holders, according to the insurers’ filings with the state for 2013. These rate requests are all the more striking after a 39 percent rise sought by Anthem Blue Cross in 2010 helped give impetus to the law, known as the Affordable Care Act, which was passed the same year and will not be fully in effect until 2014.

In other states, like Florida and Ohio, insurers have been able to raise rates by at least 20 percent for some policy holders. The rate increases can amount to several hundred dollars a month.

The proposed increases compare with about 4 percent for families with employer-based policies.

The double-digit requests in some states are being made despite evidence that overall health care costs appear to have slowed in recent years, increasing in the single digits annually as many people put off treatment because of the weak economy.PricewaterhouseCoopers estimates that costs may increase just 7.5 percent next year, well below the rate increases being sought by some insurers. But the companies counter that medical costs for some policy holders are rising much faster than the average, suggesting they are in a sicker population. Federal regulators contend that premiums would be higher still without the law, which also sets limits on profits and administrative costs and provides for rebates if insurers exceed those limits.

(italics, ours)

No proof of this is offered.

Back to the article:

Critics, like Dave Jones, the California insurance commissioner and one of two health plan regulators in that state, said that without a federal provision giving all regulators the ability to deny excessive rate increases, some insurance companies can raise rates as much as they did before the law was enacted.

“This is business as usual,” Mr. Jones said. “It’s a huge loophole in the Affordable Care Act,” he said.

We’ve got news for Mr. Jones: that is no loophole and it’s not a bug… it’s a feature. In crafting the legislation, allowing health insurers to raise rates unilaterally was most likely a concession to the insurers in return for the feds setting limits on profits and administrative costs.

That’s how things get done legislatively, though, you may be asking yourself what the results of traditional sausage-making done by paid politicians and health care lobbyists are going to actually improve your personal health care and health care costs. That’s a damn fine question.

Maybe to help answer that question, we can look across the pond to ObamaCare enthusiasts' favorite healthcare system, Britain’s NHS (National Health Service):

An official inquiry into failings at the hospital, where between 400 and 1,200 patients died needlessly due to a catalogue of failings and appalling standards of care, is due to be published later this month.

The report is expected to blame managers who cut costs and reduced staffing levels in an attempt to hit "efficiency" targets and win foundation status.

Before taking control of the health service, Sir David ran the health authority responsible for supervising Stafford between August 2005 and April 2006.

His tenure came during a four-year period in which between 400 and 1,200 patients died needlessly due to a catalogue of failings and appalling standards of care at Mid Staffordshire NHS trust.

And later in the same article:

The report, the result of a two year-long inquiry led by Robert Francis QC, is expected to call for major reforms of the NHS including new controls to identify and remove bad managers and an improved training programme for nurses and health care assistants.

It will warn that a "culture of fear" filtering down from Whitehall made managers obsessed with hitting targets, even when to do so would mean putting patients at risk.

Doctors at Stafford were called away from critical patients to treat less urgent Accident and Emergency patients because a central target said all patients should be discharged from A&E units within four hours, the inquiry reportedly heard.

Patients were left unwashed, unfed and in soiled bedsheets, while nurses were told that "heads would roll" and the A&E department could close if targets were missed.

(emphasis, ours)

ObamaCare has granted Medicare the power to reward and punish hospitals based upon patient care and, in fact, just recently Medicare reduced re-imbursement rates for 8 San Diego-area hospitals for not meeting ObamaCare's patient care goals.

Though well-intended, the NHS provides a great example of the un-intended consequences of the government incentivizing better patient care when, in reality, the results are the exact opposite.

Despite examples like this, looks like we are going to learn these lessons the hard way.


1 comment:

Shane Atwell said...

Step 1. Require extra coverage, including for pre-existing conditions (insanity for insurance).
Step 2. Watch insurance companies go bankrupt or dramatically hike their rates. If the latter, implement price controls and wait for additional bankruptcies.
Step 3. Gov't insurance, which will be all most but the super rich can afford.

Voila! Complete gov't control of healthcare through insurance.