“The business was underpriced in many markets in the first couple years,” says Andy Slavitt, CMS’ acting administrator. “In retrospect, life would have been a lot better and easier if things had started 10% higher, the rate increases had been higher and it had been just a smooth steady climb.”
Imagine that, the business was underpriced. Do you think the extraordinary pressure placed on affordable premiums by politicians had anything to do with this? Or maybe the scapegoating of insurance companies or the unrealistic promises of the administration?
There is a simple fact to remember, premiums mostly reflect what is spent on health care. A small portion is overhead, but the bulk of any premium is current and projected health care spending by the people in the insurance pool. That is not going to change. It’s the same for Medicare and it would be the same for any single payer plan.
Remember that fact as you hear more about a public option or single-payer plans. You can’t significantly lower premiums or manage future increases unless you limit what is spent on health care.
What methods for lowering the use of health care will you find acceptable?