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home : opinion : news views April 30, 2016

3/29/2013 10:53:00 PM
ObamaCare To Boost Claims Cost
Gary Gerard
Times-Union General Manager

Hang onto your wallets, folks, ObamaCare is coming.
The Society of Actuaries – one of the nation’s premier experts in numbers – came out this week with a sobering look at the effect of President Obama’s health care overhaul on the cost of insurance claims.
Insurance companies will have to pay out an average of 32 percent more for medical claims under ObamaCare, the study showed.
Now, of course, if insurance companies’ claims costs go up 32 percent, who do you suppose will absorb those costs?
That’s a rhetorical question. You know the answer.
That 32 percent is an average of all 50 states. Some states claims costs increased by as much as 80 percent. A few states claims costs decreased.
While the amount of increase or decrease varies wildly from state to state, the overwhelming majority of states will see double-digit increases.
For example, the study shows by 2017, the estimated increases would be: Ohio, 80 percent; California, 62 percent;  Maryland 67 percent; and Florida, 20 percent.
States seeing decreases include: New York, 13.9 percent; Massachusetts, 12.8 percent; Vermont, 12.5 percent; and Rhode Island, 6.6 percent.
According to Associated Press, the reason for the wide disparities is that states have different populations and insurance rules. Also, a small number of states already restricted insurers from charging higher rates for older or sicker people. Those were the states that saw the decreases.
Apparently, Indiana doesn’t have those rules. Indiana’s projected claims cost increase? 67 percent.
Actuaries are financial risk professionals who conduct long-range cost estimates for pension plans, insurance companies and government programs.
From the Associated Press:
The study says claims costs will go up largely because sicker people will join the insurance pool. That’s because the law forbids insurers from turning down those with pre-existing medical problems, effective Jan. 1. Everyone gets sick sooner or later, but sicker people also use more health care services.
“Claims cost is the most important driver of health care premiums,’’ said Kristi Bohn, an actuary who worked on the study. Spending on sicker people and other high-cost groups will overwhelm an influx of younger, healthier people into the program, said the report.
Well, duh.
Isn’t that precisely what critics of ObamaCare have said all along?
But no.
We were told ObamaCare would bring down insurance costs because so many more people would be in the pool.
Well, apparently, not so much.
Of course the Obama administration says the study is bunk – that it doesn’t take into account the effect of government subsidies, insurer competition and other factors that might offset the increases.
The actuaries said up front the goal of the study was to look at the underlying cost of medical care.
Bohn, told AP, “We don’t see ourselves as a political organization. We are trying to figure out what the situation at hand is.”
AP also quoted a prominent national expert, Rick Foster. He’s a recently retired Medicare chief actuary. He said the report does “a credible job’’ of estimating potential enrollment and costs under the law, ‘“without trying to tilt the answers in any particular direction.’’
‘“Having said that,’’ Foster told AP, ‘“actuaries tend to be financially conservative, so the various assumptions might be more inclined to consider what might go wrong than to anticipate that everything will work beautifully.’’
Yeah, because we all know that government programs always work beautifully.
And you know costs are going to go up when somebody in the Obama administration is willing to admit it.
Health and Human Services Secretary Kathleen Sebelius actually told the Wall Street Journal that health insurance premiums are rising because of ObamaCare.
From the Wall Street Journal:
Ms. Sebelius’s remarks come weeks before insurers are expected to begin releasing rates for plans that start on Jan. 1, 2014, when key provisions of the health law kick in. Premiums have been a sensitive subject for the Obama administration, which is counting on elements in the health law designed to increase competition among insurers to keep rates in check. The administration has pointed to subsidies that will be available for many lower-income Americans to help them with the cost of coverage.
The secretary’s remarks are among the first direct statements from federal officials that people who have skimpy health plans right now could face higher premiums for plans that are more generous.
OK, let me get this straight.
My insurance premiums are going to rise by double digits – maybe mid-double digits.
And – simultaneously –  more of my tax dollars are going to be used to subsidize the increased cost of insurance for low-income people.
Sounds like a lose, lose to me. But what do I know?
And why does this program need more subsidies anyway? It’s a mult-trillion dollar boondoggle already.
Isn’t this the White House that just got done telling us a one-year, $85 billion reduction in the growth of government was going to grind civilization as we know it to a standstill?
How many “sequesters” will it take to add up to the amount needed for these subsidies over the next 10 years?
And the expansion of Medicaid? Seriously?
When the U.S. Supreme Court ruled on ObamaCare last summer, it said the federal government couldn’t force states to add low-income workers to Medicaid rolls to get them medical coverage.
So far 22 states have opted out, fearful that they would wind up breaking the bank.
Texas Gov. Rick Perry had this to say about the expansion of Medicare as a way to subsidize ObamaCare:
“This is not free money from the federal government – it’s either being borrowed from China or taken out of taxpayers’ pockets. The state and federal government can’t afford the current Medicaid program as is, and it’s financially irresponsible to continue expanding a program that we know to be broken.”
Remember when U.S. Rep. Nancy Pelosi, D-Calif., referring to ObamaCare, so deftly observed that Congress has “to pass the bill so you can find out what’s in it, away from the fog of controversy”?
I’d say the fog is lifting.





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