Last week, one of the world's leading consulting firms, Milliman, warned about sticker shock ahead for individuals and families buying health insurance.
How did the White House respond? In its usual Orwellian fashion, it said, "health care costs are falling thanks to the reform law." Falling is correct only if you're standing on your head.
President Obama repeatedly promised that insurance exchanges would save families up to $2,300 a year. He couldn't possibly have believed it. From day one, it was obvious the law would push up premiums. That's because it requires insurers to cover services rarely covered in the past, puts sick people in the same risk pool with the healthy and slaps insurers with $100 billion in taxes to pass along to consumers.
Who will be clobbered by high premiums? Everyone buying insurance on the exchanges. Those are people who customarily buy their own insurance (about 25 million) and people who are currently uninsured but have to get it beginning in 2014, and finally millions of people whose employers will drop coverage in response to the law's costly requirements. Milliman predicts 67 million people in all by 2017.
These people will have no choice but to buy the one-size-fits-all "essential benefits package." That includes treatment for drug addiction, maternity care and dental and vision care for children. Only 2 percent of plans currently include all these services. When the law compels insurers to cover more, it compels consumers to pay more. It's like passing a law that your auto insurance has to cover wiper blades and oil changes, or that the only car you're allowed to buy is a fully loaded Cadillac.
Secretary of Health and Human Services Kathleen Sebelius says "folks will be moving into a fully insured product for the first time."
An unaffordable product. The Ohio Department of Insurance says the requirements will push up premiums 20 percent to 30 percent. It cheats the couple not having any more children and the straight-arrows who will never shoot heroin.
The healthy also get whacked.
Until now, most states helped people with pre-existing conditions by setting up separate, subsidized risk pools. Someone in the sickest 5 percent of the population will use 17 times as much care as a healthy person, according to the Agency for Healthcare Research and Quality. The Obama health law pools everyone together and requires the healthy to pay as much as the sick. The few states (including New York) that already do this have the highest premiums in the country. Imagine if you and your friends split the tab for coffee every day, and then someone who orders a five-course meal joins the group. Oliver Wyman, management consultants, reported that putting people with pre-existing conditions in the risk pool will push up premiums 40 percent. Similarly, Milliman predicts medical claims going up 32 percent on average and by as much as 62 percent in California and 80 percent in Ohio by 2017.
$100 billion in new federal sales taxes on health plans over the next decade will clobber consumers, too. In New York, where premiums will be highest, the taxes will add $900 a year to the cost of a family plan, Oliver Wyman estimates.
The White House dismisses concerns about rising premiums, saying consumers with moderate incomes will get subsidies. That's like arguing that it's OK for food prices to double because the needy can get food stamps. Taxpayers foot the bill for subsidies. And consumers ineligible for them get socked with sky-high costs.
Even with subsidies, millions of people coerced to sign up will stop paying premiums. A family with two adults, two kids and a household income of $35,300 will be eligible for a $11,090 subsidy paid directly to the insurer, but they will have to pay at least $118 a month toward the premium. Families living paycheck to paycheck will default in order to make rent or car payments. This is the mortgage crisis and the college loan crisis all over again. Another gift from the politicians who think, "Washington knows best."
Betsy McCaughey is a former lieutenant governor of New York and the author of "Beating Obamacare." She reads the law so you don't have to. Visit www.betsymccaughey.com. To find out more about Betsy McCaughey and read features by other Creators Syndicate columnists and cartoonists, visit the Creators Syndicate web page at www.creators.com.
COPYRIGHT 2013 CREATORS.COM
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3 Comments | Post Comment
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If prices are going to go up this much, won't there be a public backlash? Surely people are not just going to sit idley by and fork out tens of thousands of extra dollars without a fight? And will people find ways around these new laws in order to save money? There are just so many questions here and I think its impossible for Betsy to address all the concerns. She is doing a great job though. Actually taking the time to disect this behemoth of a bill for the masses to understand. Thank you and keep these kinds of articles coming.
Comment: #1
Posted by: Chris McCoy
Wed Apr 3, 2013 9:31 AM
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Re: Chris McCoy;... You're doing a great job; brownie, I mean, Betsy...
What do you think it is about writing that qualifies it as a job??? Is it that some one gets paid??? A bank robber gets paid, too... A congressman gets paid; too...
For my part, the only thing about writing that qualifies as work is all the books you have to read to know enough about anything to offer a worthy opinion, and that is most done before you decide you have something to say as well as something to hear...
I got a copy of Heidegger's Being and Time yesterday for ten cents a pound, and the week before that I got a book of commentary on Being and Time at the same price... Now; what sort of education would I need to recognize the book as worth even that much, and that judging from its impact I might be paying 1/1000th of its worth to me personally???
Meaning and value are all the same with most folks, and I can't say I know the difference myself... I will say that the application of mathematics that you see so often on the right to moral values like life and health defy understanding... I am glad to see people like Betsy and Mr. Williams always trying to work it out in public, but I don't have a lot of hope for them... You see, we are born with this dichotomy of thought between the material and the spiritual, and at the risk of seeming too spiritual, let me continue... If we say that our rights to life rest on the metaphysical conception of mankind, that men are created, then we are inclined to look to that creator as the source of our morality in regard to rights... I think we are spiritual enough even without the notion of creation, and think we have rights because we demand rights and enforce rights as a conscious social action, but that underlying all is the spiritual conception of self that exists in every life, long before the material conception...
Those who seem to hold most to the notion of us as created equal are in fact the first to dismiss the idea by means of mathematical argument made not for the moral world, but for physical reality...Math with morals is meaningless..
Those who take their spiritual conception of man to science for proof find evidence, but they would not even do so much if they were not moral to begin with... That morality of humanity that sees the love of life in all beings, and sees the simple commonality of all things of class is a quality that exists or does not exist in the person long before rationality sets in... And people can more easily reason themselves out of morality than into it, because there is no reason for it... If your health costs you too much money and costs me too much money this is no place for moral concerns to be addressed...
Even bringing the cost into it misses the point... Are you concerned about the health upon which the right to life hangs, or are you concerned about the money because the one concern is an infinite meaning, and the other is a finite value that can be addressed... Maybe the profit is too high...Maybe our general level of health is bad and growning worse...Maybe the figures are not correct, but are inflated by fear and inflated to spread fear...
If you were to take the profit entirely out of health care, two things would happen... People who lose their profit would scream communism, and the general level of health care would go down... Now, clearly, where the working people who need gain also have see losses, and have had to fight hard to have what they need, you have to believe the job offers more rewards than money...The higher one goes in achievement the more money is necessary as a reward; and it would have to be provided for; but mostly, the profit would have to be limited without destroying its potential to motivate people...And all this presupposes an organized and democratic people able to live in a dynamic relationship with it health care providers, it environment and its reality...
There is no way to half fix the problem and yet there is no one hundred percent fix... In fact, the fix we have now is no fix at all, but is only an attempt to delay the inevitable crash of the health care system and the government...
In any event, there should be no difference between the government and us, if we are a democracy...If we were a democracy we would only have to tell the government our needs, and they would accomodate us out of our resources, or perhaps do the father thang, and tell us to grow up...
The government is our means of controlling reality, but if government only controls us, and makes us endure reality, it is not doing much good...The funny thing is, that we all only know what we will pay for life at the end of it, and that is a hellova time to be shopping for insurance... But the fact is that people spend more on health care in the last six months of their lives than is spent in the rest of their lives combined... If you recognized all that expense as a lost cause it could all be avoided, but who has that sort of vision...What is six months to a dying person??? What is six minutes to a person in the hour of their death... I recognize the futility of life eternal, but this is the only show in town, and what it costs is what it costs, and if life is still a right, then people are going to want it...
Thanks...Sweeney
Comment: #2
Posted by: James A, Sweeney
Sat Apr 6, 2013 1:27 PM
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I think a good writer should be consise. You are not. I think a good writer should not ramble. Its all you do. I think a good writer should get his or her point across. You don't. There is a reason people like Betsy are paid writers and you are just an antagonizer in forums.
Comment: #3
Posted by: Chris McCoy
Mon Apr 8, 2013 6:37 AM
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