Suddenly, everyone is talking about their healthcare insurance bills. Anyone who paid attention to all that argument all those months late last year and early this year over the massive health care bill in both houses of Congress knew it was being sold on many false claims. One is that it would pay for itself.
It’s suddenly becoming clear not only that we’ll be paying a lot for it, but that the bill has already come. On the day that I learned our own premium had just shot up a couple thousand dollars with no warning, I heard one of the top TV commentators complain that he just took “a $2100 hit” on his healthcare premium, which he never saw coming and couldn’t explain. Some insurance companies were allegedly explaining to upset policyholders that costs were going to soar under the new healthcare legislation so they had to compensate.
Once the Obama administration caught wind of this, they clamped down with threats of consequences to any insurance company that blamed price increases on the government. Which the WSJ called “political thuggery.”
‘As a consequence of us getting 30 million additional people health care, at the margins that’s going to increase our costs—we knew that,” President Obama said at his press conference Friday in response to a question about rising health spending.
That wasn’t how he sold the plan, but, anyway, that’s a truism. Here’s another: The White House was always going to blame insurance companies for any cost increases, even when its own policies cause them.
Witness Kathleen Sebelius’s Thursday letter to America’s Health Insurance Plans, the industry trade group—a thuggish message even by her standards. The Health and Human Services secretary wrote that some insurers have been attributing part of their 2011 premium increases to ObamaCare and warned that “there will be zero tolerance for this type of misinformation and unjustified rate increases.”
Zero tolerance for expressing an opinion, or offering an explanation to policyholders? They’re more subtle than this in Caracas.
What Ms. Sebelius really means is that the government will prohibit insurers from doing business if reality is not politically convenient for Democrats. ObamaCare includes a slew of mandated benefits for next year, such as allowing children to remain on their parents’ plans until age 26 and “free” preventative care (i.e., no direct out-of-pocket cost sharing for consumers). The tone of Ms. Sebelius’s letter suggests that she doesn’t understand that money is exchanged for goods and services, and that if Congress mandates new benefits, premiums will rise.
Here’s the ‘what’s wrong with this picture’ snapshot of the Obamacare rollout…
The Administration estimates that these regulations should increase all premiums by 1% to 2% on average. Even if that turns out to be right—on average—that isn’t what insurers are finding in practice in the local, price-sensitive individual and small business insurance markets, where coverage is typically less comprehensive to hold down costs. For some current policies in some states, the one-year increase jumps as much as 9%.
In my state, in my city, today alone, I was involved in and overheard multiple conversations about this price hike several times, uncannily happening in separate places sponataneously all around me in public places as if I’d walked into a movie with this scripted leitmotif. But people around me said they were told their premiums had jumped either 12 or 13 percent (I heard both, seriously, in one day), and they were scraping and recalculating family expenses to factor in the increase. Which is the story in my own home.
Now get this…
ObamaCare gives Ms. Sebelius’s regulators the power to define “unreasonable” premium hikes, which will mean whatever they decide it will mean later this fall. She promised to keep a list of insurers “with a record of unjustified rate increases” and then to bar them from ObamaCare’s subsidized “exchanges” when they come on line in 2014. In other words, insurers must accept price controls now or face the retribution of a de facto ban on selling their products to consumers four years from now.
Which may be what they were after all along. If they couldn’t pass government controlled healthcare earlier this year, they will find another way to assure that outcome de facto. Which the Heritage Foundation predicted a couple of years ago when health policy expert Bob Moffitt rolled out detailed assessments of the plan before it was passed into law. When that became inevitable, Heritage issues a punch list of the top ten disasters it would produce.
The new law empowers the Department of Health and Human Services (HHS) to define a required benefits package that every health plan in America must include. Moreover, the law now allows the federal government to dictate the prices that insurers set through new age rating regulations and medical-loss ratio requirements.
The bill also opens the door for a de facto public option by creating government-sponsored national health plans to compete against private health plans in the health insurance exchanges the states are required to establish…
The national health plans would be administered by the Office of Personnel Management (OPM)…Because of this difference in regulatory authority, it would be very easy for the OPM-administered health plans to secure an unfair advantage against other plans in the state insurance exchanges. The reason: They will not be subjected to the exact same rules and regulations that are set by HHS for private health insurers. This could result in a gaming of the system in favor of the government-sponsored health plans. It is also possible that the government-sponsored health plans could be protected from insolvency through taxpayer bailouts.
And that’s only disaster number 4.
It’s time for truth and consequences. As I said up front:
This is not exactly a surprise to anyone who followed the debate. The Congressional Budget Office said last year it expected premiums per person on nongroup policies to rise as much as 13 percent by 2016.
And from what I’m hearing all of a sudden, they already have, in anticipation of what’s to come.
In California, it’s even higher.
The market is based only on healthy insured individuals, but nonhealthy individuals will now be entering into the system, he said.
“These people can no longer be excluded from health insurance,” Thorson said. “I think we’ll see a very significant pressure on premiums in an upward direction.”
Also likely to lead to premium increases is the federal mandate for individuals to purchase insurance, Thorson said.
“Both of those will lead to significant upward pressure and that, in my opinion, is why the health care legislation, although it did a lot of good things, failed in one of the most fundamental tasks, to control costs,” he said.
Several provisions that go into effect this month will cause premiums to rise, said Betsy McCaughey, former New York lieutenant governor and author of “Obama Health Law: What It Says and How to Overturn It.”
One provision is what the president called “free preventative care,” she said.
“It’s not free,” McCaughey said. “That law now requires that you pay for a whole range of preventative services in your premium.”
Services such as colonoscopies, mammograms, smoking cessation programs and pap smears will be included in everyone’s coverage.
“That means if you chose to get that service you don’t have to pay a co-pay, but it’s not free. You’ve already paid for it,” she said.
McCaughey was the guest to whom Fox News’ Bill O’Reilly complained about his premium hike of over $2,000. In front of her was the very large binder of the 2600 healthcare legislation known as Obamacare, though few people know it like McCaughey. The first 20 pages, she notes, do address what’s covered now, while the rest details coverage and cost increases by 2014. If only Congress had read it before voting…
The people I heard today were Democrats, Republicans, moderates, liberals, and none of those affiliations really mattered. The sense of dread unified them all. One thing I heard three separate times in the day was the statement….almost a plea….that someone had better do something about this.