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OpenMarket: Health Care

  • Obamacare and Activist State Courts Drive Up Health Plan Costs

    June 18, 2013 2:30 PM

    The so-called rate shock from Obamacare has hit Ohio. The state’s Department of Insurance announced last Thursday that the average individual-market health insurance premium in 2014 will cost approximately $420," per month, "representing an increase of 88 percent.”  "We have warned of these increases,” said Lt. Gov. Mary Taylor. “Consumers will have fewer choices and pay much higher premiums for their health insurance starting in 2014."  Projected costs ranged from $282.51 to $577.40 for individual health plans. "But for many experts who understand the economics of health insurance, the premium increases are not shocking at all. In August of 2011, the actuarial firm Milliman predicted that the Affordable Care Act would increase individual-market premiums in Ohio by 55 to 85 percent.

    Most of these cost increases are not only a matter of red tape and compliance burdens, but also related to cost-shifting (what some might view as robbing Peter to pay Paul), and requirements that insurance cover routine minor expenses, rather than performing insurance's traditional function of protecting against risk by paying unexpected expenses such as medical treatment for injuries and illnesses.  Wall Street Cheat Sheet's commentary "Proof that Obamacare ‘Rate Shock’ Is Real" says that "two main drivers" cause most of this increase: Risk pool composition changes will require the young to subsidize the old and the healthy to subsidize the sick; and Obamacare’s expansion of insurance benefits, particularly its required reductions in deductibles and co-pays."

    Health insurance expenses also will go up because of state court rulings that invalidate common-sense limits on meritless lawsuits, such as the Oklahoma Supreme Court's recent ruling in Wall v. Marouk . In that case, the court struck down a requirement medical malpractice lawsuits not be filed unless they are supported by evidence the physician violated the standard of care (in the form of an expert affidavit), even though such evidence is required for liability.  In so doing, it encouraged nuisance lawsuits that drive up the cost of healthcare by encouraging doctors to order unnecessary tests and practice other forms of costly and unnecessary "defensive medicine." (The activism of the court's decision is buttressed by the fact that the same day it did that, the Oklahoma Supreme Court also nullified the state's general tort reform in its entirety. (Here is some coverage: WLF, TortsProf, Tulsa World, Reuters, NewsOK, Beck ("the Oklahoma Supreme Court was plainly out of control in Ysbrand, and unfortunately it remains out of control to this day"), Douglas v. Cox Retirement Properties).)

  • Does Austerity Really "Kill"?

    May 23, 2013 12:17 PM

    Does austerity kill? In a recent New York Times op-ed, David Stuckler and Sanjay Basu claim that fiscal austerity leads to a worsening of health outcomes, using higher suicide and disease rates across Southern Europe as their case-in-point. But there are problems with this formulation.

    First, the authors make the mistake of linking fiscal austerity with less health spending.  Greece, Spain, and Italy chose to cut health spending even though there were better choices for cuts. And health spending didn't put them into deep debt to begin with. Borrowing at cheap interest rates and spending it on pet projects and political patronage -- which includes the welfare state, but not so much in health -- put them in deep debt. Estonia swiftly and severely began to reduce the size of government in 2009, but it increased health spending during that period and suffered no health declines.

  • Possible Unintended Consequences in New Obamacare Regulation

    May 22, 2013 12:55 PM

    The PCIP program gives health care providers an incentive to refuse treatment to people who desperately need it.

  • CEI Podcast For May 2, 2013: Small Business Owners Sue Over IRS Obamacare Power Grab

    May 2, 2013 3:13 PM

    Small business owners and individuals in six states, with help from CEI, are suing the IRS over what General Counsel Sam Kazman calls a flagrantly illegal expansion of the Affordable Care Act.

  • The Train Wreck That Is Obamacare

    April 18, 2013 3:57 PM

    At least one union that supported passage of Obamacare, is now calling for its repeal. As The Wall Street Journal notes, the United Union of Roofers, Waterproofers and Allied Workers has given up on salvaging the deeply-flawed health care law:

    Organized labor . . . recently has voiced concerns that the law could lead members to lose their existing health plans. . .“After the law was passed, I had great hope…that maybe the rough spots would be worked out and we’d have a great law,” said Kinsey Robinson, international president of the [roofer's] union, which represents 22,000 commercial and industrial roofers…Mr. Robinson says the union’s concerns about the law began to pile up in recent months after speaking with employers.

    The roofers’ union’s current insurance plan caps lifetime medical bill payouts at $2 million for active members and $50,000 for retirees. Next year, the plan has to remove those caps in order to comply with the health law. . . that will increase the cost of insuring members, Mr. Robinson said, and has prompted the union to weigh eliminating the retiree plan.

    Adding to those cost concerns is a new $63-per-enrollee fee on health plans that pays insurers to cover people with pre-existing conditions next year. Looking ahead to 2018, when the law levies an excise tax on high-value insurance plans, Mr. Robinson predicts that at least some of the union’s plans will get hit by it… On Tuesday, the union called for a repeal of the health law or a complete reform of it.

  • Obamacare Strangles Job Creation, Stifles Medical Innovation

    April 10, 2013 3:09 PM

    Earlier, I wrote about the dismal March jobs report and how high unemployment has been masked by rising numbers of discouraged workers and people going onto Social Security Disability. I also noted Obamacare has wiped out some jobs and prevented the creation of others.

    Economists including Mark Zandi and economics writers such as James Pethokoukis recently cited Obamacare as the likely culprit behind those lousy jobs numbers. Zandi cited the way it affected the labor market and which sectors were most sluggish in hiring. Ed Morrissey discussed some alternative theories for why hiring was weak, and why he wasn't buying them, here.

  • Obamacare Harms Colleges And Their Employees

    March 20, 2013 7:00 AM

    The University of Virginia is expecting a roughly $7-million bill for Obamacare's new employer penalties, said Susan Carkeek, the University's vice president and chief human resources officer. "We're expecting fairly significant cost implications from the Affordable Care Act that pass on new penalties and charges, fees to employers -- probably in the order of $7 million a year," she explained in an interview.

    Community colleges across the country are slashing employee hours to avoid costly Obamacare mandates. For example,"Pennsylvania’s Community College of Allegheny County (CCAC) is slashing the hours of 400 adjunct instructors, support staff, and part-time instructors to dodge paying for Obamacare." Youngstown State University is also "trimming staff hours to avoid Obamacare’s fiscal burden."  Other universities are also cutting employee hours, which is "a double whammy" for instructors, who are "facing a legal requirement [under the new law] to get health care and if the college is reducing our hours, we don’t have the money to pay for it,” said an adjunct biology professor.

  • Lobbying Can Be A Great Investment

    March 15, 2013 10:31 AM

    Not only did health insurers convince the government to require everyone in the country to buy their products, now their premiums will go up sharply, too.

  • Washington Examiner: "Congress: Obamacare To Boost Premiums To $7,186 -- A Year"

    March 8, 2013 7:30 AM

    Paul Bedard of the Washington Examiner reports on  massive premium increases due to Obamacare:

    Health insurance companies, facing new and costly rules and regulations jammed into Obamacare, will boost the premiums on younger Americans as high as 189 percent as they try to recover the new costs imposed by Washington, according to a joint House-Senate report. Families could see premiums rise to $7,186.

    In an exhaustive review of 30 studies on the impact of Obamacare, the House Energy and Commerce Committee and Senate Finance and Health, Education, Labor & Pensions committees concluded that younger individuals who now pay a premium of $648 a year will be paying $1,872, a 189 percent jump, once the health reform law fully takes effect.

  • Obamacare: More Cost, Less Coverage

    February 7, 2013 2:12 PM

    Seven million fewer people than predicted will have health care coverage a decade after Obamacare’s passage, admits the Congressional Budget Office. One reason "is that millions of Americans are expected to lose their employer-based coverage, a point" The Wall Street Journal emphasizes in this story.

    The CBO has long said it expects the new federal health law will prompt some companies to drop millions of employees from health plans because workers have new options to buy insurance on their own. In August, CBO put the number at 4 million over 10 years. Now it’s 7 million.

    Another factor is "rapidly increasing health insurance premiums" because of Obamacare. "As Politico reported, some populations could see premiums triple." For example, the "federal health care law could nearly triple premiums for some young and healthy men, according to a forthcoming survey of insurers that singles out a group that might become a major public opinion battleground in the Obamacare wars. The survey . . . found that if the law’s insurance rules were in force, the premium for a relatively bare-bones policy for a 27-year-old male nonsmoker on the individual market would be nearly 190 percent higher."


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