How government thinks about health care costs

Read the following excerpt from a WSJ article talking about large premium increases being requested by health insurers offering plans on the Obamacare exchanges. 

Do you see what I see?

If something costs $100 today and tomorrow it costs $130 that’s a big increase in costs is it not? 

I guess that math doesn’t matter when it comes to federal agencies and spin. You see, in this case it’s not all that significant because the consumer is protected by the government premium subsidies, the impact is “blunted” and “tax credits reduce the cost of coverage.”

But tax credits don’t reduce the cost of coverage at all. Tax credits shift the cost from one person to every other taxpayer. 

And public rate review? Well, such review may force lower increases temporarily, but in the end the costs are a true reflection of the expenses incurred by consumers. The optimum word and the fallacy of the HHS spin is force

The problem for the Administration is that the reality of health care costs and the basic design flaws within Obamacare do not fit the narrative started seven years ago. 

Source: The Wall Street Journal 5-4-16 

Proposed average increases are just one indicator of coming premium changes for individuals, which vary depending on the specific plan a person buys, and they must be evaluated by regulators before they can take effect. Increases can be blunted for many lower-income consumers by federal subsidies that flow directly to the insurer, offsetting the consumer’s premium bill.
Officials from the Department of Health and Human Services emphasized the role of those subsidies and said that after increases last year, by one estimate the average additional amount paid by people with tax credits was only a few dollars a month.

“Averages based on proposed premium changes aren’t a reliable indicator of what typical consumers will actually pay because tax credits reduce the cost of coverage for the vast majority of people, shopping gives all consumers a chance to find the best deal, and public rate review can bring down proposed increases,” said Ben Wakana, an agency spokesman. 


2 replies »

  1. Vote for Trump!

    “… On day one of the Trump Administration, we will ask Congress to immediately deliver a full repeal of Obamacare. … By following free market principles and working together to create sound public policy that will broaden healthcare access, make healthcare more affordable and improve the quality of the care available to all Americans. …

    Congress must act. Our elected representatives in the House and Senate must:

    Completely repeal Obamacare. …
    – Modify existing law that inhibits the sale of health insurance across state lines. …
    – Allow individuals to fully deduct health insurance premium payments … we must also make sure that no one slips through the cracks simply because they cannot afford insurance. We must review basic options for Medicaid and work with states to ensure that those who want healthcare coverage can have it. …
    – Allow individuals to use Health Savings Accounts (HSAs). …
    – Require price transparency from all healthcare providers …
    – Block-grant Medicaid to the states. …
    – Remove barriers to entry into free markets for drug providers that offer safe, reliable and cheaper products. … (we don’t want your immigrants, but, send us Rx?; we want to penalize those who employ individuals in other countries with tariffs?) … ”

    “The reforms outlined above will lower healthcare costs for all Americans. They are simply a place to start. There are other reforms that might be considered if they serve to lower costs, remove uncertainty and provide financial security for all Americans. And we must also take actions in other policy areas to lower healthcare costs and burdens. Enforcing immigration laws, eliminating fraud and waste and energizing our economy will relieve the economic pressures felt by every American. …”

    Unfortunately, nothing The Donald suggests here will be an adequate replacement for PPACA, nor will it reduce the cost of health coverage. Simply, if you want to moderate health care cost increases, you need two separate actions:
    An increase in supply (flood the market with competitors, new physicians, and other providers), and
    Change financial incentives (dramatically increase point of purchase cost sharing (to ensure individuals recognize their potential out of pocket costs and increase personal savings), while also properly structuring tax preferences and employer financial support for health coverage at a “bronze” level of coverage, where the individual shoulders all costs in excess of that “bronze” level with monies that do not receive a tax preference.

    Trump is an ass. He isn’t even a good politician because no one would accept what he proposes as a replacement for PPACA.

    As we saw with President Obama, on domestic policy (Health Reform – your costs will decline $2,000 a year, you can keep your doctor, you can keep your plan) and foreign policy (Iran nuclear deal with “moderates”, anytime, anywhere inspections, etc.), Trump is just one more politician who will lie to your face and send out their minions (like Ben Rhodes) to misrepresent the facts and the results, politicians who will promise you anything but leave you with a pile of crap.

    Trump has already publicly reversed himself on minimum wage and on tax increases.

    Trump v. Clinton? Which liar will you vote for?


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