ACA- Paved with Good Intentions
The idea behind the Affordable Health Care Act (ACA) is noble and true. The implementation may be a bit more complicated. Public opinion has shifted and health care premiums, according to the Kaiser Family Foundation, have already risen – an increase of 9% over last year, or as Politico stated: as much as a new car.
Yet, the White House is still claiming the law will lower premiums. From http://www.whitehouse.gov/: “Independent experts have found that the new law helps reduce costs for families and businesses, cuts the deficit and strengthens Medicare, adding years to the trust fund while maintaining seniors guaranteed benefits.”
That is not the reality at this point. And when you consider the $500 billion cut from Medicare, you have to wonder: what’s going on?
First, there are expensive requirements of the ACA that have already taken effect. However, the key provisions – the ones that the supporters claim will drive costs down – do not become effective until 2014. Some of these include coverage for young adults 26 years old and under, accepting patients with no pre-conditions, and abolishing annual caps.
Again, good ideas that potentially can provide some long term benefit but three years is a long way off. Furthermore, Health and Human Services Secretary Kathleen Sebelius instituted a rule that would permit the administration the ability to “establish procedures for federal and state insurance experts to scrutinize premiums” starting in September of this year. Managed care companies were told they would have to justify any rate increases above 10%. The Sebelius rule allows HHS to question any insurance agency about its paperwork.
Coincidentally, the Kaiser study showed that premium increases came in at 9% since the passage of the ACA – just under 10%.
Insurers have pushed up costs for many reasons – for instance, the anticipation of an influx of new and possibly sick patients and also to avoid getting audited by the Obama administration before the review period kicks in.
If insurers are required to cover patients regardless of pre-conditions and the number of healthy people who sign up for the exchanges decrease, services will have to be cut in order to make a profit, affecting quality of and access to care.
So, premiums are going up, despite what the White House claims. This is bad for businesses; many won’t be able to afford to cover you or your co-workers, calling into question the President’s claim you can keep your doctor.
As former Democratic National Committee Chairman Howard Dean: “Most small businesses are not going to be in the health insurance business anymore after this thing goes into effect… That’s going to be the biggest boost to small business that has been done in years and years and years.”
Well, actually, the cost of private insurance will be moved onto the public balance sheet, making the cost of the ACA bigger, and letting