Friday, March 22, 2013

Unaffordable healthcare

Somehow, you just had to know that when the government calls something "affordable," the price is going to go up, and that is what appears to be happening with insurance premiums as a result of the "Affordable Healthcare Act," or Obamacare.
Health insurers are privately warning brokers that premiums for many individuals and small businesses could increase sharply next year because of the health-care overhaul law, with the nation's biggest firm projecting that rates could more than double for some consumers buying their own plans.
Of course, there's a lot of talk about how the government is going to subsidize those premiums for some individuals, but the point is that it still costs more.  It is less affordable, and some people will be paying a lot more.  And those subsidies are, of course, paid by the taxpayers.  Stuff isn't free just because the government is paying.

One of my biggest concerns, though, is one that I haven't seen addressed anywhere yet.  The law only seems to address the cost of insurance, and not the cost of actual health care.  Even first year economics students are taught that insurance is a prime driver for increasing health care costs.  Because individuals aren't directly paying the cost of an office visit, they don't care what the cost of an office visit is, so demand for office visits stays the same even when the cost goes up.  The usual law of demand doesn't apply.  And when the cost of health care goes up, then the cost of insurance goes up with it.  Duh.
In a private presentation to brokers late last month, UnitedHealth Group Inc., the nation's largest carrier, said premiums for some consumers buying their own plans could go up as much as 116%, and small-business rates as much as 25% to 50%.
Those increases won't apply to everyone, and some people may even have to pay less, at least directly.   But then some will inevitably be paying more for their own insurance while subsidizing other people's insurance through taxes.
Insurers are "not being shy that premiums are going to increase in 2014," and are urging brokers to "brace our clients," said John Lacy, vice president of group benefits at Bouchard Insurance, a brokerage in Clearwater, Fla.
I think this article is also an attempt to brace their clients for higher insurance costs.  I didn't see the health care law referred to the "Affordable Healthcare Act" or anything similar anywhere in the article, perhaps to get taxpayers used to the idea that no legislation is going to make healthcare more affordable.

I expect Obamacare to have an impact on healthcare similar to the government subsidies of higher education.  We can expect that costs will skyrocket, while the quality of healthcare diminishes.  Bravo, Mr. President.

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