- It mandated additional coverage.
- It increased regulations and complexity.
- It taxed the medical device industry. (ie increased costs)
- It covers people that are not paying.
- It covers people with pre-existing conditions. (high risk/cost)
- It reduced the Medical FSA max from $5,000 to $2,500.
By the way, I don't disagree with better coverage for the truly unfortunate and the unlucky (ie those with chronic pre-existing conditions). But to think that it would be less expensive ("affordable") was incredibly naive.
One more thought, many of these Insurance companies are non-profit entities. So I always find it funny when folks say they are trying to increase their profits... And the public for profits have to report their earnings, so it will be pretty easy to see any gouging.
ABC Rising Costs
Sun Sentinel Rising Costs
New York Times Rising Costs
Hot Air Raising Costs
G2A American Healthcare Cost Drivers
62 comments:
It covers people that are not paying.
Is ACA increasing costs or simply reallocating them. People who can't afford health care got it anyway, and since health care isn't free, someone must have been paying for it. Now we just have a clearer idea of who that is.
--Hiram
If it were just reallocating them the costs would not be increasing.
Please explain where you see the cost decreasing? Who is benefitting from this "reallocation".
If it were just reallocating them the costs would not be increasing.
Possibly, but it certainly might appear that way. As for decreasing costs, the present system is incredibly inefficient. Costs can be reduced it's just that we have chosen not to reduce them.
--Hiram
Tell us more about these inefficiencies.
A related article.
CNN Dying Earlier
Much of the health insurance is devoted to excluding people from coverage. Universal health care eliminates that. Private health care supports huge bureaucracies of executives many of whom receive salaries far beyond the imagination of ordinary Americans. That's one of the things that could end. America's health care system is far and away the most expensive in the world, and there just isn't a good reason for that.
There is no doubt that the federal government is wasteful and inefficient. But that's nothing compared to the waste and inefficiency that takes place in the private sector. Consider the case of Mitt Romney. He left his job years before he formally quit. Yet he continued to draw a paycheck, and I expect a fairly large one, for literally doing nothing. Since leaving his job, he draws about 20 million dollars in annual compensation from that company. Now that's his business, and the business of his company, and it's the kind of deal that's routine in the private sector. But given those facts, are folks like Mitt and folks who supported him really serious in their claim that somehow the government can learn a lot about waste and inefficiency and the prevention thereof from the private sector?
--Hiram
There are many examples in Government that parallels your example Hiram. Retired Presidents, Supreme Court Judges, and Congress??!! I am guessing that the total cost of retired Government personnel is higher than the private sector??!!
"There is no doubt that the federal government is wasteful and inefficient. But that's nothing compared to the waste and inefficiency that takes place in the private sector." -- hiram
hiram, you're just plain wrong about this. Government health care inflation vastly exceeds inflation in the private health insurance market and has for many years. The ACA has made that vastly worse by enforcing government mandates on private plans, and you see the result-- huge jumps in premium costs. Some would say that was Obama's plan all along, to drive private insurers out of the marketplace.
Government health care inflation vastly exceeds inflation in the private health insurance market and has for many years.
I don't think that's the case at all. Governments generally pay far less for health care than the private sector. That's why America's health care system, dependent as it is, on the private sector, is so vastly expensive that it threatens the entire economy.
What do we really get, exactly, when we pay these health care executives the millions of dollars we do? Do you really think they get the big bucks because they provide care that's better and cheaper?
--Hiram
Actually yes. They are usually rewarded via stock options, which means that their company is growing, operating effectively and showing a profit.
The only way they grow is if they satisfy their customers and keep them alive. (ie dead customers pay no premiums)
If employees are unhappy with an insurance company, the company would ditch it ASAP to keep their employees satisfied. Especially when the mgrs are on the same program.
Unlike them politicians, who have their own plan.
Also, Romney may get income from Bain, but I am pretty sure it is because he is a part Owner. (ie dividends not salary)
I am pretty sure you would agree that Bain is unlikely to just give away money to ex-employees.
The only way they grow is if they satisfy their customers and keep them alive.
Typically health insurance in this country is provided by employers. So who is the customer? The employee? Or the employer?
--Hiram
Also, Romney may get income from Bain, but I am pretty sure it is because he is a part Owner. (ie dividends not salary)
Does this make a difference out of which account Bain pays Mitt Romney? Is this huge cost one that anyone in the public sector incurs?
--Hiram
"'Government health care inflation vastly exceeds inflation in the private health insurance market and has for many years.'
I don't think that's the case at
all. " -- hiram
hiram, you are wrong on the facts, no matter what you think. Yes, it makes sense that, since government forces health care providers to accept much lower payments for services than, in some cases, their costs, the rate of increase of those payments would be LOWER than for the free market, but it's not; it's higher. Even with the costs of care shifted from government to private insurance, private insurance still rises more slowly because of free-market competition absent from the government system.
You are correct that having employers pay (third party payers) is part of the problem, increasing total cost. That problem applies even moreso to government programs because nobody there tries to control spending, whereas in private insurance competition puts some downward pressure on rates. One major component of reform would be to eliminate ALL third-party payers.
private insurance still rises more slowly because of free-market competition absent from the government system.
that just hasn't been our experience. Costs in the United States where private insurance plays a leading role are much higher than elsewhere. Why that is, is mostly an unexplored question, but that is the case.
--Hiram
Why exactly American health care is so incredibly expensive isn't an issue we know very much. That's because it's outside the scope of balance requiring discussion. Nobody inside the beltway has an interest in discussing that issue, so the issue is undiscussed. What that means is that we pay much more than other countries for health care, but we have no clear idea why. I also found the logic here instructive. Conventional wisdom holds that because we have private sector participation in health care, which a huge role assigned to insurers, who receive huge cash payments without providing any care at all, health care is cheaper in the United States. Strangely, no one seems to feel this argument has been refuted that health care in America isn't cheaper, it's incredibly more expensive.
==Hiram
So you don't think a business owner should get a share of the business profits? Very confusing.
Though you would support live long security, payments and other benefits for political figures?
Very confusing.
So you don't think a business owner should get a share of the business profits?
I do, if he can. But in every case, that's an expense, all of us end up paying for. He certainly has no right to a profit. What health care folks are concerned about is that they will be put out of business by competitors who are cheaper because they don't have those costs.
--Hiram
So people that have money invested in a business have no rights to the profits from that business?
Did I read that correctly?
No, healthcare folks are scared that rules, regulation and bureaucracy will make it impossible to provide a great service for an acceptable price.
This is how they keep companies, employees and other customers happy. And how they grow their business and make profits.
So people that have money invested in a business have no rights to the profits from that business?
That's kind of a different question having to do with the relationship between owners and managers. But really, usually not. That's why even companies that make money don't have to pay dividends.
", healthcare folks are scared that rules, regulation and bureaucracy will make it impossible to provide a great service for an acceptable price."
But how well founded is that concern when every other industrial country is able to provide services at a much lower price?
==Hiram
Apples and oranges...
Please provide some links backing up your opinion.
Remember my Italy story.
"Oh you are 60 and have aggressive cancer, here is $50k...Enjoy your last 6 mths."
In America we would drop a million dollars on this case without blinking twice.
http://www.washingtonpost.com/opinions/a-grim-diagnosis-for-our-ailing-us-health-care-system/2011/11/25/gIQARdgm2N_story.html
--Hiram
An opinion piece... Lordie... I'll read it later.
WP Grim Diagnosis
That American health care is much more expensive than anywhere else in the world is more of an overlooked fact then a disputed one. Samuelson is actually rather a conservative columnist, and no friend of the president's policies accepts that.
One of the failures of the health care debate is that it often refers to health care programs in other countries, often disparagingly without ever making an effort to understand what they do.
==Hiram
There is a lot of conventional wisdom out there roughly to the effect that private sector participation in health care makes it better and cheaper. Therefore it would seem to follow that America's health care system which is private to a far greater degree than that of any other system in the industrialized world, should be both better and cheaper. That neither seems to be the case is for some reason never understood as a refutation of the argument. But economic circles, these results are not at all surprising. It's well known to economists and has been for decades, that ordinary market forces don't apply in the area of health care, by and large. Kenneth Arrow, the Nobel Prize winning economist is particularly known for his work in this area.
Does Mr Arrow address my Italy story?
Does Mr Arrow address my Italy story?
Probably not. Economists tend not to be driven by anecdotes in their analysis of policy. At least not Nobel Prize winning economists.
--Hiram
There are lots of problems with the operation of economic forces when applied to health care. Things like lack of transparency, and a general lack of information. It's very difficult, for example to get quotes on health care. And there is the problem we talked about the other day, that the person receiving the care is often not the customer of health care insurance. And one interesting thing, you can see this a little more clearly in the areas of health care where market forces do operate more effectively. I am thinking here of lasik surgery a fairly generic sort of optional surgery, where there is lots of information and disclosure and where market forces do operate to drive prices down.
--Hiram
"'private insurance still rises more slowly because of free-market competition absent from the government system.'
that just hasn't been our experience. Costs in the United States where private insurance plays a leading role are much higher than elsewhere. Why that is, is mostly an unexplored question, but that is the case."-- hiram
I'm sorry, but facts are stubborn things, and you've now denied two of them. First, private health insurance costs DO rise more slowly than government ones. (Remember the annual "doc fix" that Congress passes?) Second, government controls over 50% of all health care delivery in this country, directly or indirectly, and it is the government insurance model that makes our health care expensive, NOT the private system. How would you explain the fact that the ACA is driving up costs so rapidly, if more government control and participation lowered costs, as promised?
You can make unwarranted assertions all you want, but the quickest solution to bringing health care costs down to and BELOW the rest of the developed world is to get government OUT of it as much as possible.
J. Ewing
First, private health insurance costs DO rise more slowly than government ones.
That's what one would expect since private insurer avoid riskier patients the result being, the costs of the default insurer, the government, go up faster than the private insurer's cost. The laws of economics work just fine in that respect.
--Hiram
the government insurance model that makes our health care expensive
Is the government an insurer? Does it receive premiums which it invests? Does it deny coverage to certain individuals based on risk or pre-existing conditions? What functions of an insurance company are performed by the government?
'
--Hiram
Medicare Tax = Premiums
Medicare trust fund and bonds = Investment
Medicare payments....
Of course it is insurance... The premiums just aren't high enough to cover the costs.
And medicare certainly does have rules and limits. Just not enough of them to keep its costs amd. Premiums aligned.
CATO Grass Not Always Greener
CATO Grass Not Always Greener PDF
That is an excellent explanation of why one can not compare apples, oranges and watermelon.
I especially enjoy how we get dinged for higher infant mortality because we deliver more preemies and other high risk babies, instead of aborting them early.
The Cato piece makes the point that we pay more for health care because we choose to. We have more or less given a blank check to health care providers. To start with, it is important to understand that that is the policy choice we have made. Is it the right one? If it is, then in a world of limited resources, we must make other policy choices accordingly. We have to either raise revenue, or cut other expenditures. It isn't rocket science. Nothing that the Mitt Romneys of the world learn at the Harvard Business Schools of the world provide us ways to avoid those choices, all they learn at those places lots of ways to make those choices much more obscure.
Health care is isn't free. There is no invisible hand, capable of reaching into an invisible wallet for real cash to be used to pay the bills. If we learned nothing from the phony economy of the 1990's, and 2000's, I hope we have learned that.
--Hiram
So you would like the government to ration care for all, so that we will all be equal?
You would like the governement to block people from spending more of their personal property to buy better insurance policies or pay large out of pocket payments?
Would you also want to prevent people from going to other countries for medical treatment if they can afford it?
Would you prevent all these wealthy dignitaries from coming to the USA for where they receive the highest quality medical care in the world?
It is kind of funny that so many people that could afford to go anywhere for the best care usually come to the USA. Yet people have the nerve to say that our medical system is lacking.
I forgot. One of my favorite songs... Rush Trees
Maybe we should really settle for the lost common denominator. Not...
So you would like the government to ration care for all, so that we will all be equal?
We have limited resources, and so they will have to be rationed. So would it be your decision to ration them unequally, to give preference to some to the disadvantage of others? How would you go about doing that? Hire a death panel?
--Hiram
"We have limited resources, and so they will have to be rationed." -- hiram
There you go with that "we" again. Who is this "we" that is responsible for my health care choices, my health, the health of my family and presumably, their food, clothing and shelter? Why is it not =I= that am responsible for the choices =I= make about these things, and to fund them as I see fit out of the limited resources =I= have?
The ACA is a one-size-fits-all government, ham-handed, bureaucratic nightmare which is making choices for everybody. That means we all pay for many things that only a few need, and "we" do not pay for some things that only a few others [desperately] need. That's waste on the one end and rationing on the other. The former is visible already and the latter is inevitable.
J. Ewing
J, Remember that Hiram is not a big fan of Private Property, he usually infers or states that that "our property" is somehow the "gov'ts property"...
Hiram,
What resources are limited? More healthcare facilities, personnel and equipment can be provided if necessary. At least for those who are paying their full insurance premium.
Hiram is not a big fan of Private Property, he usually infers or states that that "our property" is somehow the "gov'ts property"...
I like private property. But if our property belongs to us, so do our obligations and our debt.
It's sort of like thinking the house belongs to us, but the mortgage belongs to someone else, the bank maybe.
==Hiram
I think we are back to the liberal belief system.
"Everyone that gets to American soil is owed food, clothing, housing, healthcare, etc by the government no matter how they choose to live their life".
I don't think that is quite the same as a mortgage. With a mortgage one voluntarily enters into the fixed contract of defined terms and gains the benefit of using the property for a known cost.
In this case, our representatives are making choices and incurring costs in our names. The nice thing is that the choices can be legally changed at any time. Therefore the "contract" is relatively flexible to the changing views of the constituents over time. Both the payments and the expenses.
You would think so, except that government spending never goes DOWN, does it? There seems to be a "liberal ratchet" driving expenditures without ever being accountable even for increasing the benefits. For example, since the government spends $60,000 to lift the average family of 3 out of poverty, how is it even possible that we have people still living in poverty?
J. Ewing
"With a mortgage one voluntarily enters into the fixed contract of defined terms and gains the benefit of using the property for a known cost."
We voluntarily choose to live in the United States. But in any event, that's irrelevant. We owe the national debt and how that happened is irrelevant.
"In this case, our representatives are making choices and incurring costs in our names."
That is of course true.
==Hiram
Of course we will need to pay back the debt, however we can also significantly reduce expenditures and stop adding to it.
Entitlements, miltary and general govt operations are all ripe for the picking.
Blogger John said...
Of course we will need to pay back the debt, however we can also significantly reduce expenditures and stop adding to it.
Of course we can. We just don't want to. The Cato report is instructive in the sense in that it describes a lot of the choices we collectively make that drive up health care costs. We don't want to wait in lines, that sort of thing.
--Hiram
Up until four years ago, the deficit was on its way to being eliminated. When Obama came to power he immediately jacked up the deficit to eight times its previous value and has maintained that unprecedented level of deficit spending for the last four years. It seems obvious that none of this spending has gone into improving the economy or people's lives in general, so it seems like simply canceling that spending would be the first step towards sane fiscal policy. Why not just go back to the last Bush budget?
J. Ewing
Why not just go back to the last Bush budget?
I suppose the answer to that depends on what the merits of the Bush budget were. Why of all the budgets in the history of the republic, is that budget the best budget for us now?
--Hiram
I like the 2008 budget much better. Rationale:
- It almost matched revenues then.
- It would almost match revenues now, especially with the tax increase.
Fact Checker Spending
A recent news story says that the cost of entitlements and increased interest on the debt (thanks, Obama) amount to about $8B/month above the 2008 budget, so let's cover that. The deficit for this year, then, rather than $1300 billion, would be about $260 billion. Quite an improvement. Considering that the spending since 2008 has taken the country backwards economically, it seems like a no-brainer. Unfortunately, so does Congress.
J. Ewing
It almost matched revenues then.
Why do you think a budget that matched revenues in the past, would match revenues now? Particularly one that was created in 2008 which we all know was based on a bubble economy sustained by illusory wealth?
- It would almost match revenues now, especially with the tax increase.
Why do we think revenue should determine policy? For example, in WW II, it was unquestionably the case that tax revenue was insufficient to finance the war. Since the position here seem to be that revenue determines policy, should we have ignored the attack on Pearl Harbor?
What's driving costs today is health care. Since our current revenue is insufficient to meet these costs, should our policy be to deny health care?
==Hiram
One would just look at the current revenue forecast.
Defense has always been key function of gov't, healthcare has not been. Let citizens pay more of their healthcare bill.
"What's driving costs today is health care. Since our current revenue is insufficient to meet these costs, should our policy be to deny health care?" -- hiram
Exactly right on the big drivers of the deficit-- Medicare and Medicaid. But the answer isn't to for the government to deny health care, it is for government to get the heck out of the health care business all together. They only drive up the costs and cut quality of care. Easy to simply turn it back to the states and to individuals, maybe with a fixed benefit for those who are of limited means.
J. Ewing
Defense has always been key function of gov't, healthcare has not been.
How is the fact that defense, off and on over our history, been viewed as a function of our government relate to whether or not providing health care should be a policy? In dealing with defense issues in 1789, were the legislators of that period also deciding health care policy to be implemented two hundred years later?
--Hiram
But the answer isn't to for the government to deny health care, it is for government to get the heck out of the health care business all together.
Isn't that a distinction without a difference? Assuming that health care isn't in fact to be denied, the decision we made we decided not to create the death panels whose job it would have been to deny care?
==Hiram
"We the People of the United States, in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defence, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity, do ordain and establish this Constitution for the United States of America."
Let's think... Defense is a key because the government and our current society would be over run if a foreign power took over the USA. And it is specifically mentioned in the preamble.
Now providing some of the less motivated citizens free food, housing, healthcare, phones, utility assistance, extended unemployment benefits, education, etc at the expense of other hard working citizens could be part of "promoting the general welfare", though it seems a stretch to me.
Finally I think your "health care isn't in fact to be denied" assumption is flawed. The question is do we want society and private individuals to manage the exceptions, or do we want government regulating everyone and every situation.
Defense is a key because the government and our current society would be over run if a foreign power took over the USA. And it is specifically mentioned in the preamble.
Welfare is mentioned too.
--Hiram
"...we decided not to create the death panels..." -- hiram
I remind you again that the death panels are solidly in place and integral to Obamacare, and an unavoidable aspect of socialized medicine. When you give up the choice of health care insurer and health care provider, you also give up the choice of what health care you will receive. Just that simple. I prefer to make those choices myself.
J. Ewing
John, the "general welfare clause" has been stretched beyond all recognition. Current welfare benefits of every stripe, Social Security, Medicare and Medicaid are NOT "general welfare" because government money flows to individuals. That was never the original intent nor of any reasonable interpretation of the phrase. The only way it could be stretched to cover health care would be if government would build medical schools or hospitals, and even that would be a stretch since they would be local rather than "equal" across all citizens of the nation.
J. Ewing
John, the "general welfare clause" has been stretched beyond all recognition.
Do you think the founding fathers wouldn't have thought health care was related to the general welfare, even assuming that they lived in a time when the science of medicine was not very well understood? This doesn't seem to me much of a stretch at all.
==Hiram
Since these gov't wealth redistribution programs were not in place for >150 yrs after their time, I am thinking they would have disagreed.
I am with J on this one.
The goal was to run a country where people could work hard, be taxed reasonably, and buy the services or products that they wanted and needed. I don't think most of the founding fathers had a socialistic model in mind where the gov't was the sugar daddy to all and regulated the "general welfare".
Again, it was the GENERAL welfare that expected government to serve, rather than the redistribution of wealth from one individual to another that we now call "welfare." Really, it is an abomination and a massive failure by all measures except one: it has increased government power exponentially by making people dependent upon it.
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