Wednesday, May 1, 2013

"I thought Obamacare was going to lower my health insurance premiums???"

"I thought Obamacare was going to lower my health insurance premiums???"

Well, maybe...

According to Kathleen Sebelius, Secretary of Health & Human resources, she says we'll see some of both.

From Sarah Kliff in Wonkblog (3/29/13)...

Women are going to see some lower costs, some men are going to see some higher costs,” Health and Human Services Secretary Kathleen Sebelius told reporters Tuesday. “It’s sort of a one to one shift … some of the older customers may see a slight decline, and some of the younger ones are going to see a slight increase.”

As some of the skimpier health care plans are beefed up to meet new federal guidelines, some younger people, may see rates rise. Others, like some women and older Americans, may see rates fall due to new restrictions on how insurance companies can set prices, specifically regarding age or gender. 

Added to the overall question of out of pocket expenses for healthcare is the impact of the subsidies, which take effect in 2014. 

The Affordable Care Act isn't some magic thing that lowers everybody's premiums and gives more of everything to everyone. Its most effective about increasing access to the uninsured, which is just one of the "three legs" of a health care system. The other two legs are quality and cost. The ACA does have components that attempt to address those two legs, but they pale in comparison to the access improvements. 

Its also important to remember that health insurance premiums have been increasing since the 1990's. They would likely continue to increase with or without the ACA ever being enacted. 

Going forward, the ACA restricts health insurance companies from setting their rates based on pre-existing conditions, health status or gender which have resulted in years of increased premiums and many people being unable to purchase health insurance. Now, insurers are only permitted to consider single person vs. family plan, geographic area, age (with limits) and smoker or non smoker (again, with limits.) 

We know that without the ACA, our premiums would've likely continued to increase. Now, for many, those increases may not be as severe.  Also keep in mind, that millions of Americans will now have access to private health insurance, which the government will help pay for if they can't afford it. If the ACA had included a Public Option, we might be seeing lower prices as one of the effects of a public option would have been to pull the market price down by offering a insurance product that didn't have to return earnings/profits to its shareholders, didn't have to allow for high administrative costs and certainly no allowance for exorbitant CEO salaries. The Urban league says it this way

The arguments around the public plan too often ignore what we believe is the central reason for including a public plan as a component of reform: that health insurance markets today, by and large, are simply not competitive. And as such, these markets are not providing the benefits one would expect from competition, including efficient operations and consequent control over health care costs. We believe that the concentration in the insurance and hospital industries that has taken place over the past several years has been a significant contributor to this problem. The role of the government plan is to counter the adverse impacts of market concentration and, in doing so, slow the growth in health care costs.

Conservative Democrats are directly responsible for the lack of a public option, but there was zero support for it from virtually any Republicans either. The CBO estimated that a public option could've saved 100 Billion dollars over ten years, but despite that, it wasn't enough to bring even fiscal conservatives on board.

The next few years are going to be bumpy. The exchanges aren't going to function smoothly at first. There are gaps in coverage for too many Americans who make too much to qualify for subsidies but can't afford their premiums. We know there's going to be problems, but then we will also see problems we haven't anticipated. In time, they will get worked out. All large social programs including Social Security, Medicare and Medicaid have had major growing pains. You can also count on many conservatives, conservative leaning media outlets like Fox News and RW talk radio, blogs, etc.  to put those mistakes, errors and screw-ups front and center for all to see on a 24/7 basis. It won't help a damn thing except to possibly motivate the government to throw everything they can at making it as smooth a rollout as possible. I predict it won't be good enough and we'll all get sick of hearing how badly its going. 


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