Insured might pay more under Obama plan

[toomuchtime_]

Some analysts say extra cost to policyholders may be $780 in first year


If President Barack Obama gets what he wants in his health care plan — covering all Americans and barring insurers from denying coverage — individuals could wind up paying higher premiums, some analysts say.

The Obama plan would impose new costs on insurance companies, which would probably then raise the prices customers pay for coverage. Employers also would likely pass on some of their higher costs to employees.

An individual in a typical plan might have to pay up to $780 more for the same coverage in the first year of Obama's plan, estimates Erik Gordon, a health care analyst and assistant professor at the University of Michigan's Ross School of Business.

Gordon said employees now typically pay 20 to 40 percent of the premium for a typical health care package costing about $13,000 a year for a family of four, with employers picking up the rest.

10%-15% increase possible
Obama's plan would raise insurers' costs 10 to 15 percent if reform doesn't provide other savings, Gordon estimated. He thinks employers would stick employees with perhaps 40 percent of the higher premium, or $520 to $780 more — though they might also receive better coverage because of mandatory preventive care and screenings.

The president told Congress most of health care reform can be paid for by eliminating waste and abuse in the existing system. Better screenings that prevent chronic diseases later would also save money, the administration has argued.

Apparently, our Cheerleader-in-Chief hasn't heard the CBO has stated research shows 80% of preventative care such as screenings costs more than it saves.

In his speech to Congress on Wednesday night, Obama said he wants to bar insurers from denying coverage to anyone because of a pre-existing health problem, canceling policies for sick people or refusing to cover preventive care.

He also suggested limits on Americans' co-payments and deductibles. "We will place a limit on how much you can be charged for out-of-pocket expenses, because in the United States of America, no one should go broke because they get sick," the president said.

Obama would also charge insurers a fee for their most expensive policies as a way of encouraging insurers to keep costs low and keep their rates low.

In addition, Sen. Max Baucus, D-Mont., chairman of the Senate Finance Committee, has proposed a new fee on insurers that would subsidize coverage for uninsured Americans. The fee would generate about $6 billion a year.

Covering tens of millions more Americans would heap hundreds of billions of dollars in costs on managed care companies.

A lot of feel good slogans that would add enormous amounts to insurance company costs that would be passed on to consumers and businesses in the form of higher health insurance premiums, making health insurance more expensive than ever before for nearly all Americans and saddling American businesses with additional costs that would make them less competitive than ever with foreign competitors.

But while Obama's plan would cause American consumers to grow poorer and most American businesses to become less competitive, it would cause health insurers to grow fatter and richer and provide a profit bonanza for health care providers and suppliers.

Health insurance stocks spike
The stocks of several health insurers performed better than the broader market Thursday. Shares of Cigna rose more than 5 percent, and Humana Inc., WellPoint Inc. and Aetna Inc. all climbed at least 2 percent.

Investors are "coming more and more to the conclusion that it's really not going to hurt," said BMO Capital Markets analyst Dave Shove.

Shove noted that many insurers already operate profitably in states that have restrictions similar to those being discussed in reform proposals. These include limits on profitability and laws that guarantee coverage for individual insurance.

Health care reform without a public option "would be fantastic" for insurers, said Robert Laszewski, president of Health Policy and Strategy Associates, a Virginia-based health care consulting firm.

"They're going to get millions of new customers and more than a trillion in new premiums over a 10-year period," said Laszewski, a former industry executive. "There's a reason they aren't running any negative ads."

New business
The plan also would send new business to providers. Another analyst, David Bachman of Longbow Research in Independence, Ohio, expects spending on doctor visits would jump $8.5 billion a year under Obama's proposal.

He also expects to see an initial increase in spending on supplies used during patient visits, amounting to roughly $2 billion per year, and billions of dollars more for diagnostic testing and prescription drugs.

Overall, Bachman said his "back-of-the-envelope calculation" indicates a 15 percent increase in spending at hospitals, 17 percent more for doctor visits and 10 to 12 percent more for patient supplies. Insurers will then pass those increases on to customers, he said.

"They're going to raise premiums on employers, who are going to raise costs for employees," Bachman said. "Then the fight becomes over how to best control costs."

Insured might pay more under Obama plan - Health care reform- msnbc.com

 

[Zoom-boing]

If they use Massachusetts as a model to follow, the shit is going to get very deep, very fast.

RealClearPolitics - Massachusetts' Obama-like Reforms Increase Health Costs, Wait Times

 

[xsited1]

Someone at MSNBC is going to get fired for posting that on their website.

 

[pal_of_poor]

I think the whole "fine if you don't buy" thing is designed to compensate for any necessity for an increase in prices to cover them not actually covering people, as they have agreed to do, while taking their client's money for decades sometimes.

Also, if the public option, already a massive compromise from single-payer, gets through, then it serves as a competition to the insurance companies, and forces them to try to keep their prices down.

Like it or not, huge pay packages to executives, cushy retreats and vacations paid for by shareholders, ads run on the television about things unrelated to normal advertising, in particular political ads, all make private sector insurance very expensive. By the same token, these are areas where insurance companies that are trying to compete, can easily manage to find cheaper alternatives. That is the result of the whole idea behind having a public option.

As much as the PO is maligned, were we to not have it, it'd likely cost two dollars to mail a letter, and $20 to mail a small package. The PO, keeps the private companies like FedEx or UPS, in line.

 

[toomuchtime_]

I think the whole "fine if you don't buy" thing is designed to compensate for any necessity for an increase in prices to cover them not actually covering people, as they have agreed to do, while taking their client's money for decades sometimes.

Also, if the public option, already a massive compromise from single-payer, gets through, then it serves as a competition to the insurance companies, and forces them to try to keep their prices down.

Like it or not, huge pay packages to executives, cushy retreats and vacations paid for by shareholders, ads run on the television about things unrelated to normal advertising, in particular political ads, all make private sector insurance very expensive. By the same token, these are areas where insurance companies that are trying to compete, can easily manage to find cheaper alternatives. That is the result of the whole idea behind having a public option.

As much as the PO is maligned, were we to not have it, it'd likely cost two dollars to mail a letter, and $20 to mail a small package. The PO, keeps the private companies like FedEx or UPS, in line.

The lack of competition among private health insurers in some markets, as well as the high cost of health insurance, is the result of government policies, originally well intentioned but now in need or revision. Competition among private insurers could be easily achieved at no cost to taxpayers by revising ERISA so that company plans were only tax exempt if they allowed the employee to choose to either accept company provided health insurance or use the company contribution to buy his/her own insurance from whatever company he/she chose.

If the employee could find an individual policy for less than his/her contribution and the company's contribution, the employee could keep the difference as regular taxable income. This would drive price competition among private insurers in the individual market and lower the cost of health insurance for everyone. Moreover, as consumers shopped for their individual policies, they would notice that if they chose high deductible catastrophic policies along with health savings accounts, they would be able to keep even more of the company contribution as regular income, and if they went this route, they would become price conscious shoppers for health care providers, and this would put downward pressure on health care costs which would also serve to further drive down health insurance premiums for everyone. As health care costs and health insurance costs fell, some who now can't afford to buy health insurance would be able to afford it, and if the government decided to provide subsidies to help others, it would cost taxpayers far less than it would now. All of this could be achieved at no cost to taxpayers by simply amending ERISA as described above.

In addition, if an employee owned his/her own individual health insurance policy, he/she would feel free to move from job to job within the coverage area without fear of losing health insurance coverage because of pre existing conditions the employee or a member of his/her family might have been treated for; this would certainly be a great boon to the employee as well as to the regional economy. If the federal government took the additional step of making it possible for health insurers to sell policies nationally (admittedly a complex task), employees would be able to move anywhere in the country without fear of losing their insurance; certainly a considerable benefit to the employee, his/her family and to the national economy. Of course, having 1500 health insurers competing for every health insurance policy sold in America would put even more downward pressure on health insurance premiums, making health insurance even cheaper for everyone and allowing even more people who now can't afford to buy their own health insurance to purchase their own policies, and of course, if the government should decide to provide subsidies to those with pre existing conditions to help them with the higher insurance costs they must contend with or to those who are still too poor to be able to buy their own insurance but not poor enough to qualify for Medicaid, it will cost taxpayers much less than it would now.

All of these benefits to employees, to health care/insurance consumers, to the national economy and to taxpayers can be achieved just by removing government obstacles to competition among health insurers.