Lies, Damn Lies and Statistics II

Secretary of  Health & Human Services Kathleen Sebelius has issued a fact sheet outlining the benefits of Health Reform for Business quoting CBO as the source for the claims below.

Premiums for small business will go down. Small businesses are likely to see premiums drop by 1 to 4 percent under the proposal due to lower prices. These lower prices come from:

 

Lower administrative overhead. Right now, each small business has to consult with a broker or hire someone to collate plan information, assist employees with decisions, and handle issues as they arise. Under reform, in the exchange, there will be people whose job it is to provide plan information and facilitate enrollment. The exchange centralizes what is otherwise a process that is extremely duplicative, streamlining administrative costs and lowering premiums.

 

Greater competition. CBO attributes savings to “providing a centralized marketplace in which consumers could compare the premiums of relatively standardized insurance products.” This includes competitive pressure from a public health insurance option.

 

Administrative simplification. Physicians spend on average about 140 hours and $68,000 a year just dealing with health insurance bureaucracy.[v] By simplifying and standardizing paperwork and computerizing medical records, doctors will be able to focus on caring for their patients instead of dealing with bureaucracy. CBO estimates nearly $20 billion in Federal savings over 10 years, with additional savings accruing to businesses and families.[vi]

 

Here we have the former Kansas State Insurance Commissioner, who ought to know better, telling some Orwellian whoppers such as;
 

•  Small businesses are likely to see premiums drop by 1 to 4. Really? No underwriting, no pre-eexisting conditions and the price will drop?  Try dropping the crack pipe.
• Right now, each small business has to consult with a broker or hire someone to collate plan information, assist employees with decisions, and handle issues as they arise. Under reform, in the exchange, there will be people whose job it is to provide plan information and facilitate enrollment. You can keep the plan you have but you won't need your broker any longer as a government employee will now come out to your location, explain the coverage and collate all your enrollment data as part of facillitating enrollment. These new federal exchange employees will no doubt possess all the answers to your questions regarding HIPAA, ADA, FMLA, COBRA, ARRA.
• CBO attributes savings to “providing a centralized marketplace in which consumers could compare the premiums of relatively standardized insurance products.” This includes competitive pressure from a public health insurance option. You mean like the brokers did before the state took on this role?
• 
  Physicians spend on average about 140 hours and $68,000 a year just dealing with health insurance bureaucracy.[v] By simplifying and standardizing paperwork and computerizing medical records, doctors will be able to focus on caring for their patients instead of dealing with bureaucracy. CBO estimates nearly $20 billion in Federal savings over 10 years, with additional savings accruing to businesses and families.[vi] This is great news. The government can just hand over that slick paperless system Medicare and Medicaid use today to eliminate waste. Medicare has been around since 1965 so they must have a bulletproof administrative process worked out by now right? I guess that's the $20B handed over to special interests as part of the spendulous package that has seized up investment in EHR's like the potion they poured into the cash for clunkers while HHS defined "meaningful use"?
  

So there you have it. Unemployment will be solved by all those new jobs in the exchange. But wait how does one reconcile the apparent 1-4% savings under reform with this statement?

• Businesses can keep what they have.
  
• CBO affirms that any proposed benefit mandates would not affect the small or large group markets: “The requirement would have relatively little effect on premiums in the small group market, however, because most policies sold in that market already cover those services and would continue to cover them under current law.”

 

Recently I spoke with the CEO of a large insurer with a significant presence in the U.S. individual health insurance marketplace. The CEO told me the average policyholder the firm covered would experience a 23% increase premiums due to the inclusion of mandates the government requires be in their plans. These are policies people purchased for catastrophic coverage the government has now decreed as inadequate. So ultimately its the healthy prudent Americans who secured their own catastrophic coverage who will pay dearly when some bureaucrat decides the appropriate premium ratio is 2-1 for those over 50 to those under 30 years of age. Theres your change suckers.