Thursday, October 21, 2010
Wednesday, October 20, 2010
The media is finally reporting on trends average Americans know all too well in the season of open enrollment; Namely, that health insurance premiums are exploding to unaffordable levels particularly for child coverage under group plans. Worse yet, consumers have lost their ability to go to the individual market for child only coverage since insurers are want to write new business individual policies that will be completely unprofitable.
Merrill Matthews writes in Forbes of The Heavy Hand of Katherine Sebellius.
Jeff Jacoby writes in the Boston Globe of Obamacare Blowback.
John Stossell points out that HHS cannot Repeal The Laws of Economics. Quotes from Mr Stossell are below.
When Obamacare was debated, we free-market advocates insisted that no matter what the president promised, the laws of economics cannot be repealed. Our opponents in effect answered, "Yes, we can."Of Course Mr Stossell is 99% correct. his article points out that Obamacare has already precipitated Principal Financial Group from exiting the group medical market. Principal has arranged for United HealthCare to assume all group medical policies over the next 3 years. One minor point Mr Stossell is that Principal insures 840,000 group health policyholders totalling over 5,000,000 members. Most of these policyholders are small businesses. Many are carve-out plans covering salary only members. I spoke to one such policyholder yesterday who due to business conditions will likely be dropping health coverage as of November 1, 2010. Do you think those employees will be happy when they vote November 2, 2010?
Well, Obamacare has barely started taking effect, and the evidence is already rolling in. I hate to say we told them so, but ... we told them so. The laws of economics have struck back.
Health insurers Wellpoint, Cigna, Aetna, Humana and CoventryOne will stop writing policies for all children. Why? Because Obamacare requires that they insure already sick children for the same price as well children.
That sounds compassionate, but -- in case Obamacare fanatics haven't noticed -- sick children need more medical care. Insurance is about risk, and already sick children are 100 percent certain to be sick when their coverage begins. So if the government mandates that insurance companies cover sick children at the lower well-children price, insurers will quit the market rather than sandbag their shareholders. This is not callousness -- it's fiduciary responsibility. Insurance companies are not charities. So, thanks to the compassionate Congress and president, parents of sick children will be saved from expensive insurance -- by being unable to obtain any insurance! That's how government compassion works.
In 2014, the same rule will kick in for adults. You now know what to expect.
It should further be noted that everything coming to pass with Obamacare was completely predictable. The sad truth is that we used to have major medical coverage that covered hospitalization. People paid out of pocket for office visits and routine care including prescriptions. Then came Medicare introducing relative value reimbursement and co-pays. Then came the HMO Act of 1973 which normalized low co-pays for routine office visit, pharmacy coverage and deductibles for all health care. Health care inflation exploded. The consumer driven movement in Healthcare that began early in this decade was beheaded by Obamacare because HHS and the exchanges have deemed these plans innappropriate for consumers.
In yesterdays post I pointed out Marc Siegels prescient explanation here but what I did not quote then is relevant and is included below;
None of this is terribly surprising. I mean, imagine if your car insurance covered every scratch or dent. Wouldn't you expect your premiums to rise to meet the expanded coverage? And wouldn't you expect your auto repair shops to become clogged with cars that didn't really need to be repaired, competing for time and space with other cars with broken transmissions or burnt-out motors?
If we want lower insurance premiums, we will need to return to a system that favors high deductible, high co-pay catastrophic-type insurance with a built-in disincentive for overuse, such as the kind that some employers have provided as an option up until now. Patients could pay for office visits from health savings accounts or other flexible spending tax shelters. More than 10 million Americans already have such accounts.
Unfortunately, the new law is taking us away from the kind of insurance that compels patients to have more skin in the game. As a result, we'll all pay in the long run — both financially and with less efficient, perhaps even lower quality, care.
The kind of insurance the new law mandates will, over the years, wear out the health care system in the same way that overuse in orthopedics wears out an elbow or knee joint. This won't be fun for doctors or, most important, for patients.
Marc Siegel is an associate professor of medicine and medical director of Doctor Radio at NYU Langone Medical Center.
Tuesday, October 19, 2010
Marc Siegel has written an op-ed in USA Today that is precisely on target with respect to the options employers no longer have in enacting catastrophic health care plans.
During the battle over this reform, you often heard, even from President Obama, that you'd be able to keep the plan you have. What he didn't say — but what we now know — is that because of this new law, the private markets will have to remake their plans, that the costs will rise and that the plan you were told you could "keep" is in all likelihood no longer available. But when your plan changes, backers of reform will simply blame it on those evil private insurance companies.Very true Dr Siegel