quinnscommentary

The uproar over BoA charging some customers a monthly fee to use a debit card is a perfect example of the impact of the President’s anti business, scapegoating rhetoric having an impact on the common sense thinking of the average person.

While Congress saw fit to cut the fees banks charge merchants for a debit card transaction resulting in banks making the fee more visible by charging a small portion of it to customers, we hear no outcry over the fees credit card organizations charge merchants for a credit card purchase. These charges are typically a percentage of each sale with the percentage dropping as the total volume and dollar value of each purchase rises.  Thus the fees are structured to benefit the largest volume retailers and cost the most for the mom and pop local store.  The percentage can range from 1% to near 5%.  In addition, there are various other processing fees paid by the merchant who hopes to offset this expense by increasing sales volume and adjusting prices accordingly.  The variation in credit card fees is why some merchants accept Visa or Mastercard, but will not accept American Express which of course, they are free to do. It is also why some merchants will not accept any credit cards, that and they want to have only cash sales…I wonder why (that’s another story).

Do people think all this convenience is free?  Given that most people now think that preventive health care services and even contraceptives are “free,” perhaps it is not unexpected that they also think it outrageous that they must pay directly for the convenience of a debit card.  Who should pay? 

Sure banks save money by encouraging the use of debit cards, so do merchants and all of us grain a great deal of convenience, does that mean that every time an industry finds a way to be more efficient and save money those savings are all passed on to someone else.  What do you think is the profit margin on an iPhone, do you really care?

I tried to transfer frequent flyer miles from my wife’s account to mine just to consolidate them, the fee was $15.00 for each 1,000 miles, now there is a rip off. Or how about paying $99.00 for extra leg room in the exit aisle where the seat only reclines on a limited basis only to learn that “limited” really means not at all – and we get excised over a $5.00 monthly fee for unlimited use of a debit card? Where is the uproar when a gas station charges ten cents a gallon more if you use a credit card?

None of this is logical, it is more of the mainstream press jumping on the scapegoat campaign bus. If you don’t think the convenience of a debit card is worth $5.00, change banks or to really make a statement about the value of debit cards, give yours up!  Don’t we have more important problems to whine about?

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• Debit Card Fees Are Robbery – NYTimes.com (mbcalyn.wordpress.com)

What happens to the money you pay as payroll taxes for Social Security?

If comments received on this blog are any indication, most people think “their money” is used to pay their benefits. That’s wishful thinking, but you are not alone. A new Rasmussen poll indicates that only 10% of Americans know that the federal government can spend Social Security taxes anyway it wants to.

Here is how it works. Incoming taxes are used to pay current benefits to old folks like me, the excess over what is needed to pay current benefits is used to buy special treasury bonds that pay interest to the Social Security Trust Fund. The government then takes the proceeds from the bonds it sold and … you guessed it … spends the money on everything the government spends money on. Think of it this way. Your last several payroll tax deductions helped pay the $1500 tax credit I received when I installed efficient central air conditioning … and I appreciate it.

There is one problem with all this. The incoming taxes are no longer sufficient to pay the current benefits so interest on the bonds already purchased is also being used to pay the benefits. At some point both incoming payroll taxes and the interest will not be enough to pay benefits. When that happens the Social Security Trust will knock on the Treasury Department’s door and redeem the bonds it purchased.

Now, since the proceeds from these bonds has already been spent where is the Treasury going to get the money to give to the Trust Fund to pay benefits? That’s a good question. Where do you think they money is going to come from? You might want to ask Sen Bernie Sanders of VT he thinks talk about Social Security going broke (projected in 2036 by the way) is “total nonsense.” He also thinks Social Security has nothing to do with the federal budget or deficit – where is Treasury going to get the cash to give to the Trust Fund? Think about it

One other conundrum to consider; if the current payroll taxes are insufficient to pay benefits how can it be prudent to further reduce that source of revenue by having a Social Security payroll tax holiday as proposed by the President? On the surface it seems absurd, but the idea is that by getting more people working they too will be paying Social Security taxes and thereby increase the revenue. Of course, that assumes hiring is stimulated and these workers are able to stay on the payroll beyond 2012. Let’s hope that is an accurate assumption.

However, in the short run Treasury is simply going to issue more debt to provide IOUs to the Trust Fund to offset the lost tax revenue.

Now you know what happens to the Social Security payroll taxes you pay.

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• Should We Be Concerned About Deeper Cuts to the Payroll Tax? (woodgatesview.wordpress.com)
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Last week I received the 2012 Medicare Handbook and a notice about the start of open enrollment to select a Medicare plan for the following year. Enrollment starts October 15th.

Having managed corporate annual open enrollment for nearly fifty years, I know there are two things that are critical to people making informed choices; the plan provisions and the price. No employer would think of starting an open enrollment without this information. Apparently, that is not obvious to the folks running Medicare.

Neither the premium for Part B of traditional Medicare nor the deductibles for Medicare are currently available, even on the Medicare.gov website. Last year this information was not available until mid-November. The law requires that the Handbook be distributed two weeks before the start of the enrollment period regardless if the critical information is available. Did it ever occur to anyone to start enrollment when the critical information becomes available?

If you are considering various options for your Medicare coverage, you might want to wait until you have the missing information.

A quote from a newspaper article:

“Thanks to the Affordable Care Act … on average, Medicare Advantage premiums will go down next year and seniors will enjoy more free benefits and cheaper prescription drugs,” Health and Human Services Secretary Kathleen Sebelius said in a release.

The Affordable Care Act has led to average premium declines for the second year in a row: 2012 premiums are projected to be 11.5 percent below 2010 premiums.

You see, there is nothing in the Affordable Care Act that lowers costs for these plans which is quite different from lowering premiums. In fact, the Act lowers payments to these plans and increases some benefits thus increasing costs. Some plans have dropped from participation.

Think of it this way, real Medicare Part B premiums are $115.00 while the law limits many people to $96.00 … temporarily …

Warren Buffett and Bill Gates are generous men both giving billions of dollars to foundations to advance worthy causes. Buffett is so generous he also wants to pay more taxes. Buffett and Gates are also smart men; crafty and skilled entrepreneurs. That is exactly the type of people we need to solve major problems.

I have one of those problems just made for these two gentlemen.

This country desperately needs a fully integrated, easily accessible, universally applied patient information system, integrated health records if you will. In the last seven months I have become increasingly frustrated with the lack of coordination, endless duplicate forms and questions, antiquated information distribution (doctors writing letters to other doctors) and possibly unnecessary health care tests and services. Nobody in the health care system can or does talk to anyone else.

To think that the federal government has the resources or wherewithal to fix this is a dream, it doesn’t, it can’t, it won’t. (England tried and failed) As a result, billions of dollars and who knows how much time is wasted not to mention the quality of health care suffers. CMS has programs to reward Medicare physicians who invest in such systems, but even if marginally successful, such a program is piecemeal. We need a single system for the Country or at the very least state-wide systems that can talk to one another when necessary.

This sounds like a great project for our two generous, tech savvy, skilled billionaires. What could be better than solving one of the most challenging technology problems we have while benefiting every American in the process and saving the government and each of us tons of money as well? Hey, they may even create jobs and make a few extra dollars in the process.

So what do you say guys, can you help us all receive better, more efficient more affordable health care? And Warren, I don’t care if you announce this project at a Obama fundraiser.

The Wall Street Journal reports in an editorial that HHS has effectively shut down the planning process and office that was to implement the CLASS Act section of the Affordable Care Act. You remember the CLASS Act don’t you? That is the provision in PPACA that allows Americans to buy long-term care insurance from the government, begin paying premiums immediately but wait five years before any benefits are payable. At one point employers were going to be required to take payroll deductions for the premiums but that idea was scrapped.

Take a look at the HHS website about the CLASS program.

Experts and actuaries warned from the start that the program was not sustainable. However, to make the numbers work during the first ten years of health care reform, politicians needed to count the premium revenue from CLASS even while no claims were possible until at least 2018 (assuming the program was implemented on January 1, 2013). Beyond the first ten years disaster loomed because premium revenue would not cover long-term care costs.

Now it appears HHS has come to the same conclusion and is trying to avoid implementation of the program without actually changing the law. You see, if the CLASS program is repealed, health care reform is underfunded by about $86 billion (WSJ figures) and the federal deficit goes up.

Talk about creative accounting, you would think these bureaucrats and politicians were getting a big bonus for manipulating earnings per share. On the other hand this is a plus because the short-term deficit is increased in favor of lowering long-term liabilities and isn’t that what all the experts say should be done? The only problem is the real CLASS Act liabilities (beyond the first ten years) were never actually accounted for.

Don’t you wish you could operate a business this way?

The short answer is yes, that is possible for some Medicare beneficiaries. Most beneficiaries have had their Part B premium frozen since 2009 due to the hold harmless provision in the law (an increase in the Part B premium cannot result in a net decrease in the Social Security benefit). This means that the increasing cost of Medicare has been spread among fewer people, those who are not eligible for the hold harmless provision.

Assuming there is an increase in Social Security benefits in 2012, a virtual certainty at this point, all hold harmless beneficiaries will pay more for Part B Medicare in 2012. Spreading the cost increase among all beneficiaries means that the individuals who have been paying higher premiums than would have been required in the absence of the hold harmless provision may see a decrease in their monthly premium.

I like to think of myself as a good citizen and since we all want to help keep health care costs down, helping Medicare spot fraud and abuse is a good idea…until you try it.

A few weeks ago I visited a major pharmacy chain and received my annual flu shot (or as they call it in England a flu jab) for free. Don’t you love when you get something for free even when it isn’t?

Yesterday I received my Medicare Explanation of Benefits (EOB) for this service. However, the EOB says I received Pneumococcal vaccine for $13.25 and Administration of influenza vaccine for $16.74. Since this service is “free” Medicare paid the total fee in full for each listed service.

Nobody said anything to me about receiving a vaccine for pneumonia so I went back to the pharmacy and asked what they were giving out. Only vaccine for the seasonal flu and H1N1 in a combined shot I was told. I mentioned the Medicare EOB and was told it must be a mistake. Indeed it may be a mistake both in billing and letting me think I received two different vaccines.

Now back to this good citizen stuff. I wanted to report this error or fraud to Medicare so I went to Medciare.gov to see how to go about it. Here is what I found.

How to Spot & Report Fraud

Spotting Fraud

When you get health care services, record the dates on a calendar and save the receipts and statements you get from providers to check for mistakes. Compare this information with the claims Medicare processed to make sure you or Medicare weren’t billed for services or items you didn’t get.

3 Ways to Review Your Original Medicare Claims

1. Look at your Medicare Summary Notice (MSN).
2. Visit www.MyMedicare.gov.
3. Call (). TTY users should call .

Reporting Fraud

If you think a charge is incorrect and you know the provider, you may want to call their office to ask about it. The person you speak to may help you better understand the services or supplies you got. Or, your provider may realize a billing error was made.  If you’ve contacted the provider and you suspect that Medicare is being charged for a service or supply you didn’t get, or you don’t know the provider on the claim, call (). TTY users should call

You will notice that the number to call to report fraud is the same number you use to question a claim. What you get is a voice response system that takes you through endless and irrelevant menus and of course you must enter your personal information. Finally, when you discover that none of the menus available mention reporting fraud, you are eventually given the instruction to say “agent” and you are connected with someone to talk to…ah, not so much. What I got was the proverbial “all of our agents are busy assisting other customers” Then I was told the wait time was about ten minutes. By this time I had already spent five minutes or more in frustration finding my way around the interactive system and I was in no mood to sit and wait for another ten minutes so I hung up.  Hey, it’s only money.  In this case if such a mistake applied to all who received a flu jab, it only adds up to about $530,000,000.

Let’s hope this isn’t fraud, because they are not going to hear more about it from me. You would think that if the bureaucracy was truly interested in learning about fraud or even ongoing mistakes that cost money, there would be a dedicated telephone line where you immediately got to talk to a person and that you could also begin the process on-line to save everybody time and money.

There I go again thinking like a corporate executive in the private sector where what you spend needlessly actually does matter. You see, actually saving money in the Medicare bureaucracy matters little unless the money supposedly saved is double counted for some new spending program or is part of the daily political rhetoric come election time.

Am I being too cynical?

Related articles

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As we get closer to 2012, you will read more about Medicare Part B premium increases. Some commentators will call a modest percentage increase a whopping increase based on the fact that for most Medicare beneficiaries there has been no increase in the premium since 2009. However, that does not mean costs have not increased as have the real premiums for Part B.

Consider this from Meducare.gov

Most beneficiaries will continue to pay the same $96.40 or $110.50 premium amount in 2011.  Beneficiaries who currently have the Social Security Administration (SSA) withhold their Part B premium and have incomes of $85,000 or less (or $170,000 or less for joint filers) will not have an increase in their Part B premium in 2011. 

For all others, the standard Medicare Part B monthly premium will be $115.40 in 2011, which is a 4.4% increase over the 2010 premium.  The Medicare Part B premium is increasing in 2011 due to possible increases in Part B costs.  If your income is above $85,000 (single) or $170,000 (married couple), then your Medicare Part B premium may be higher than $115.40 per month. 

Note that the real increase in 2011 was 4.4%, a modest increase by health care inflation standards. Let’s assume the 2012 increase is also 4.4% thus driving the standard Part B premium to $120.48. However, it is also expected that there will be Social Security COLA in 2012 meaning that the Part B premium will no longer be frozen at the 2009 level of $96.40. Therefore, a Medicare beneficiary who has benefited from a frozen Part B premium could see a jump in premium from $96.40 to $120.48 (estimated at this point) or a 24.9% increase. That increase covers the growth in costs for the four years from 2009 through 2012.

This is what happens when premiums are artificially held at levels that do not support growing costs. Medicare beneficiaries who were protected by the law because of no Social Security COLA may have benefited for the last three years, but 2012 will be the year to play catchup. It has nothing to do with Obamacare, but rather simple math and a Social Security law that ignores the unintended consequences of not allowing revenue (premiums) to keep up with expenses.

If you apply an estimated 2012 3.5% increase in your gross Social Security benefit and subtract a possible Part B premium increase of $24.08 (assuming you currently pay $96.40 for Part B), you will have a general idea of the impact of all this on your net Social Security payment. However, your Social Security payment will not go below what it is today in any case.

It is virtually inevitable that at some point at least a portion, if not all, of the employer paid health insurance is going to become taxable income to workers.  The quest for additional revenue is simply too great for this source to be ignored for much longer as the revenue loss to the federal government is massive on this benefit.  In addition, with the words “fair share” being thrown about it is hard to argue that all Americans should not be treated the same when it comes to taxing health benefits.  In other words, if you receive health insurance from your employer, why should you have a better tax break than someone who pays for insurance on his own?   There is precedent for taxing at least a portion of this benefits.  For many years employer-provided life insurance has been taxed under Section 79 of the IRC for the value of the insurance exceeding $50,000. 

On the other hand, while Congress is worried about the revenue loss from this tax-free benefit (income), under Section 125 of the Internal Revenue Code, an employee can pay his or her share of the premium (generally 25% or more of the total cost) on a pre-tax benefit.  It would seem more logical to first eliminate this pre-tax premium benefit rather than to begin with taxing the employer contribution.  Holy cow, I used “logical” and Congress in the same paragraph.

As if the revenue issue were not enough, you have  politicians demonstrating their lack of knowledge about this entire issue. In a speech at Stanford University Rep Paul Ryan said the government should replace the income tax exclusion for people who get employer-sponsored health care and replace it with a refundable tax credit that they could use to purchase coverage on their own. Some 170 million Americans are now covered through the workplace. According to Ryan it would give consumers the needed incentive to demand better value out of their health care.

“Giving patients and consumers control over health care resources would make all Americans less dependent on big business and big government for our health security; give us more control over the care we get; and force health care providers to compete for our business,” Ryan said.

I admire Mr. Ryan for his budgetary skills and innovative thinking, but on this issue he sadly demonstrates his lack of understanding about health benefits and the inherent value added by employer based coverage especially for the 70 million Americans enrolled in employer self-funded plans.  I will talk more about this issue in another post, but dismantling the employer based system and turning Americans lose to fend for themselves is just plain dumb.

 

Public Reaction to Changing the Tax Treatment of
Employment-Based Health Benefits

WASHINGTON—The recent deal in Washington to raise the debt ceiling and reduce the deficit did not include any changes to the preferential tax treatment of employment-based health benefits, but it does open the door to further cuts. 

Capping and eliminating the preferential tax treatment of employment-based health benefits as it applies to workers has been proposed in the past and was recently proposed by President Obama’s bipartisan National Commission on Fiscal Responsibility and Reform and The Heritage Foundation. The tax preference associated with employment-based health coverage is the largest tax expenditure in the U.S. budget, accounting for $1.1 trillion in foregone tax revenue during 2012–2016. Changing the tax preference may therefore be one option that the super-committee considers.

According to the 2011 Health Confidence Survey, recently released by the Employee Benefit Research Institute (EBRI) and Mathew Greenwald & Associates, if the tax law was changed such that the value of employment-based health coverage was taxed, some individuals would change how they get covered while others would drop coverage: 

• 29 percent would continue their current coverage.
• 33 percent would switch to less costly employment-based plan.
• 26 percent would shop for insurance directly from an insurer.
• 8 percent would drop health insurance altogether

 

The 2011 HCS is the 14th annual wave of this survey to assess the American public’s attitudes regarding the U.S. health care system. It was conducted by the nonpartisan Employee BenefitResearch Institute (EBRI) and Mathew Greenwald & Associates, Inc., a Washington, D.C.-based market research firm. The full report is published in the September EBRI Notes, online at www.ebri.org

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A battle rages between Catholic agencies and organizations and the Department of HHS over regulations classifying contraceptives as preventive services and requiring their cost to be 100 percent covered by health insurance and benefit plans beginning next August. Religious organizations say that HHS’s limited exception from the rules will not allow them to avoid the required coverage and still employ or provide services to non-Catholics.

While this may appear to be a religious issue, it is actually a common sense issue. As I have repeatedly said (and I do mean repeatedly) health insurance should stick to providing coverage for the unanticipated risk of costs associated with getting sick or becoming injured. Frankly I don’t care if someone wants to use a contraceptive of any kind; that’s their business, not mine. However, it should also be their expense, not mine or yours.

Adding contraceptives to coverage increases premiums for everyone, that is just a fact. How much matters little because each new mandate adds to premiums which we all decry as being too high.  Contraceptives do not treat or even prevent illness, (pregnancy is not an illness) they are not an unanticipated insurable risk. They are not unaffordable, a months supply can be obtained for about the cost of two packs of cigarettes, or a night at the movies for a couple, or a good (even mediocre) bottle of wine and for less than a monthly cell phone contract.

We continue to be unable to break the psychological block we have between money spent on health care and just about anything else. We do not want health insurance, we want total cost and responsibility insulation. Because of that the problem of health care costs will never be resolved.

Related articles

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The health care crisis, education crisis and the financial crisis have a number of similarities. At the root is a general consensus that the problems are caused by someone else with the frequent target being business of one type or the other. Rarely do we focus on the real causes because they make us uncomfortable and place responsibility where we don’t want it.

In health care and education we blame portions of the system, but are generally unable to temper our quest for the best with the realities of what actually constitutes the best. That is, more is better, high cost equals high quality. In education that goes from pre/school through college. We blame teachers and administrators and ignore the responsibility of the family. We accept growing costs for local education and for college without questioning the added value or the sources of those costs. The same is true for health care. Our judgement is clouded by our emotional inability to deal with illness in any context of cost and to some extent even quality. It is far easier to simply blame the insurance industry than to protest high infection rates in hospitals or to question the necessity of care. In both education and health care our solution is frequently to throw more money at the problem, yet we seem to be unable to recognize that when the bill comes due.

When it comes to finance, we have easy targets, big business and big banks and we gloss over the damage caused by politicians in their quest for fairness, control or simply their favoritism. Who caused the mortgage crisis, who put people into homes they could never afford, who wants to bail out those folks now?  Banks may have taken advantage of the environment, but it was created by politicians who per the norm, ignored the unintended consequences of their actions.

This all boils down to human nature.  Politicians play on that fact while at the same time are blind to the consequences of doing so (or more cynically, don’t care).

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So, who do we blame for the new fees on debit card use being imposed by some banks?  No doubt the inclination is to blame those greedy banks.  But wait a minute, in the past banks charged retailers a fee when a customer used a debit card for a purchase, about $.44. The retailer is relieved of handling and processing cash and receives its money electronically; quite efficient I would say.  The customer was also relieved of the need for cash.

Along comes the Dodd-Frank legislation to straighten out those bad banks and their practices. Included was the Sen. Durbin amendment that cut the debit card fees imposed by banks in half thereby cutting the revenue of the very organizations that the legislation and bail outs attempted to shore up and increase their capitalization.

In the process the large retailers such as Wal-Mart, Target, etc. receive a windfall because their debit card fees are cut in half (oh, did I mention those same organizations were reportedly behind the Durbin amendment in the first place?). Needles to say Durbin is slamming Bank of America for charging these fees. However, Bank of America repaid all the bailout money it received in late 2009 — the federal government made more than $4 billion off the arrangement. I wonder if this politician assumes the retailers will share their new found twenty-two cents per transaction with customers?

In the end we have a politician influenced by large retailers shifting costs from those retailers to banks who then shift the cost to consumers.  What if the banks simply absorbed this loss revenue?  Well in some cases it would help sustain the shaky ground they are already on. 

Now that we have another lesson in unintended consequences, what have we accomplished other than to make life tougher for middle and lower-income people (the ones most likely to shop at the big box retailers)?  Perhaps we have also learned another lesson about the short-sighted, easily influenced, dumb politicians we have employed.

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No doubt the President’s proposals for deficit reduction will start rumors about Medicare cuts, but keep in mind that so far what he is talking about is for future beneficiaries starting six years from now – long enough for Congress to mess things up again. Less than two years ago Congress expanded Medicare in several ways while claiming to reduce costs, now we are talking about cuts in Medicare to reduce the deficit. During the health care debate cutting fraud and waste was going to save Medicare, now cutting fraud and waste again is going to save the country.

Exactly how much fraud and waste is there? And by the way, who designed this massive bureaucracy that apparently is unable to manage fraud and waste in the course of doing its business? Politicians are proposing new laws to accomplish what we have been paying people to do since 1965. If this was the real world people would be fired rather than making political hay out of this great fraud revelation.

The truth is Medicare needs to operate more like insurance companies rather than forcing insurers to act more like a government bureaucracy.

To add more logic to the mix, the President will not consider any cuts affecting the middle class unless the wealthy pay their fair share. How does having a billionaire paying more in taxes thereby allowing cuts for the middle class help the middle class? Politicians surely have their own logic and language.

What we are seeing is more of the same piecemeal approach to taxation and budgets rather than stepping back and doing a complete tax overhaul that does assure fairness. In fact, what has been proposed will make the entire system more complex and costly to administer. Take this idea for example.

“A surcharge on Medicare Part B premiums equivalent to about 15 percent of the average Medigap premium for new beneficiaries that purchase Medigap policies with particularly low cost-sharing requirements, starting in 2017. This proposal will save approximately $2.5 billion over 10 years.”

Although the savings are speculative, this simply means that if you buy supplemental coverage for Medicare that insulates you from most cost sharing (deductibles and coinsurance) thereby eliminating your incentive to care about costs and driving up your demand for services, you pay more. Okay, Medicare beneficiaries should not lower their out-of-pocket costs just because they turn 65. I’ve written about that concept before. If you had a deductible and coinsurance before being enrolled in Medicare, why not after becoming a Medicare beneficiary? Actually, taking all things into consideration, such coverage is probably not in most seniors best interest anyway.

However, the point is rather than a complex surcharge system why not simply prescribe the type of Medigap that can be sold and thereby address the problem. This is only the start of the debate of course, but simple, logical solutions are in short supply.

The President’s proposal also seeks to freeze the income thresholds where higher Part B premiums begin. The freeze would be extended until 25 percent of beneficiaries pay higher premiums based on higher gross income. Remember the good old Alternative Minimum Tax that was implement because 200 people escaped paying income tax? Now because of no inflation adjustments the ATM affects millions of middle class Americans, here we go again. Twenty-five percent of Americans who are on Medicare is a lot of people, probably including you.

Nobody is going to escape the pain of all this, but it would be nice to hear the truth. It would also be nice to see a broad strategy addressing the fundamental problems rather than piecemeal changes designed more for November 2012 maneuvering than problem solving and true fairness.

The House Ways and Means Health subcommittee held a hearing on consolidation in the health care industry. Chairman Wally Herger (R-Calif.) said in a statement.  “In some circumstances, consolidation produces desirable results like improved efficiency and quality,” ”However, we must ensure that consolidation is not simply used as a tool to increase revenues by driving up Medicare spending and the cost of private health insurance.”

How about consolidation being used for survival?  If members of Congress had read the content of the Affordable Care Act they might understand that there are strong incentives to consolidate as a defensive measure in part to cope with new fees and taxes, cuts in payments, mandated benefits, limits on earnings., etc.  What would you do if your business faced with the same factors?  Never mind increasing revenue, how about preserving revenue (and jobs)? 

On top of all that, this health care thing is a game of leverage, the more leverage you have the better able you are to negotiate for higher or lower fees.  Consolidation among health care providers puts the insurers at a disadvantage in negotiating fees with network providers.  Consolidation among insurers gives them more clout in an area to demand lower fees from providers…and would you believe that translates into lower premiums.

While spouting rhetoric about more competition in health care and among insurers politicians created exactly the opposite incentives in the Affordable Care Act, not to mention that more competition among insurers in an area is not what you want anyway.

P.S. How would consolidation drive up Medicare spending when physician fees are supposed to be cut by 23% and PPACA contains scores of new programs to lower Medicare costs, just asking.