Category Archives: regulation

Obamacare and Health Spending

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John Goodman, over at NCPA, has an interesting point-out on Obamacare (and on a Paul Krugman New York Times column, but that’s neither here nor there).*  OK, a little bit of here: Goodman cited Krugman as claiming that

Since 2010, when the [the Affordable Care Act] was passed, real health spending per capita—that is, total spending adjusted for overall inflation and population growth—has risen less than a third as rapidly as its long-term average.  Real spending per Medicare recipient hasn’t risen at all; real spending per Medicaid beneficiary has actually fallen slightly.

Then Goodman presented this chart

and then Goodman noted

[T]he chart clearly shows[] nothing happened to the rate of increase in health care spending in 2010—the year ObamaCare was passed.

Yes, the growth rate of health care spending that year was well below the historical average.  But it was just as much below it in 2009, the year before the act was passed!  Health care spending growth in 2010 was exactly the same as it was in 2009.  It remained exactly the same in 2011.  And again in 2012.  Looking only at the numbers, we would have to conclude that nothing that happened in 2010 had any impact whatsoever on health care spending.

On that last point (no Obamacare impact whatsoever), though, I have to disagree with Goodman.  It looks pretty clear to me that Obamacare has utterly halted the downward trend in health care spending growth: that growth has stopped decreasing toward no growth.  If allowed to continue, the trend would have reached zero growth and gone to outright decreases around 2012.

Keep in mind, too, that the spending aspects of Obamacare have not yet kicked in.  Other than the increases in premiums and deductibles, I mean; those are getting started.

 

*Interestingly, Jason Furman, White House Council of Economic Advisers Chairman, had an op-ed in Monday’s Wall Street Journal that also burned through over 1,000 words showing all the ways he alleges Obamacare has slowed “health inflation.”  While also carefully ignoring that already in place declining trend in the years prior to 2010.

YGTBSM

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Here’s another installment in this series, this time (again) with ObamaMart.

Finally get enrolled in an Obamacare health welfare package via ObamaMart?  Don’t die this year.  Don’t take that raise.  Put that baby back where it came from.  You can’t update your package to account for these life changes—that functionality deliberately was put on the back burner in favor of fixing other…glitches…in the Web site.

The list of life changes that you can’t tell ObamaMart about include, in addition to the above,

  • marriage and divorce
  • death in the family
  • new job
  • moving to a different community

Remember, moving to a different community also changes the premiums you have to pay—that community rating thing.

Remember, also, you still have to repay the subsidy payments you received after the raise made you ineligible.  And you still owe the taxes on the raise.

Just be sure, after you’ve separately told your Plan provider about your life change, you go back and tell ObamaMart.  After they get around to fixing this.

General Insurance Dysfunction

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I’ve written about the failure and the dishonesty of Obamacare on a number of occasions.  However, the failures of insurance coverage aren’t limited to Obamacare.  Here’s an example from my wife’s insurance coverage, an old-style policy that hasn’t (yet) been canceled by Obamacare.

At my wife’s annual physical, last month, she spent over an hour talking with our doctor about mutual concerns, where they agree, where they disagree. (How many doctors will do that, in the first place?  This is one of the reasons I like her for my doctor, too.)

We got the billing statement a couple days ago:

Billed to Insurance = $20.00
Network Discount = $17.00
Applied to Deductible = $0.00
Paid by Plan = $2.70
Paid at Visit = $0.00
Amount you may Owe = $0.30

First, the insurance networks to which she belongs beat her up to a $20/hr rate that she’s allowed to charge (actually, it’s a per visit rate, but this is what this doctor’s integrity works that out to), then forced an 85% discount on top of that onto her.

Where’s insurance industry competition?  Obamacare ain’t it, and yet it’s worse than the insurance régime before.

Health Law’s Uneasy Launch

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In a Wall Street Journal article from which I copied the title, Christopher Weaver opened with some misapprehensions that are interesting for a WSJ article [emphasis added].

Can [the Health Law’s] mix of government subsidies and market-based competition extend health insurance to millions of people…?

Umm, what market-based competition, exactly?  The Health Law begins with a mandate that creates artificial demand.  The underpinning and beginning of this particular market is decidedly anti-competitive.  The Health Law continues and ends with mandated coverages—innovation not allowed except by government permission—and with government-permitted premiums.  There’s no competition present in the product mix, either.

Oh, and those premiums are not at all based on the risk being assumed; indeed, health histories of the enrollees are explicitly excluded from the premiums charged them.

There’s nothing at all competition-based in this privately funded, government mandated welfare entitlement program.

Health Insurance Risk…Corridors

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These are insurance company premium income/payout cost bands written into Obamacare that are intended to smooth out the transition from a quasi-free market in health insurance to the government run health welfare program that is Obamacare.  Under this program, insurance companies that are too successful are punished for that success by being forced to disgorge some of their income in the form of a tax on the premiums they collect, which the Feds then transfer to insurance companies that couldn’t hack the new program, so they get government support.

Only some companies that are having trouble need not apply for the bailout support—they just get to pay the vig without the payoff.

The IRS collects an annual flat amount specified by the Affordable Care Act to be allocated among the insurers according to market share.

But….  IRS regulations published in November excluded “any entity that is a self-insured employer to the extent that such employer self-insures its employees’ health risks.”  Since about four of five employers with more than 500 workers and most union-negotiated health plans are self-insured, they are spared from the tax.  So is insurance on behalf of “government entities,” such as original Medicare (but not privately run Medicare Advantage).

[Thus]…the tax burden falls on the saps who work for small businesses, the self-employed and individuals—i.e., the people who can least afford it.

Worse,

this [tax] is not deductible for corporate income tax purposes.  In other words, health plans pay the tax and then federal and state taxes on the taxed amount.  [Ex-CBO director Doug] Holtz-Eakin estimates this unusual taxes-on-taxes rule means that the effect on premiums is 54% larger than the dollar amount of the tax itself.

Hmm….