New York Employers: Health Costs Up 10 Percent Next Year, Obamacare to Blame
The New York Fed has published the results of its latest Empire State Manufacturing Survey and Business Leaders Survey (which covers both manufacturing and services). It’s devastating news for Obamacare. Business leaders expect health costs to rise ten percent next year. About 73 percent (almost three quarters) of the business leaders blamed Obamacare for some of the increase.
This is going to hurt workers, too. Twenty percent of employers expect to increase the proportion of part-time workers, versus only five percent who expect to go the other way. About 22 percent plan to cut wages and benefits, versus only six percent who plan to increase them. With respect to benefits, 68 percent (two thirds) of business leaders plan to cut the range of services covered or size and breadth of their provider networks.
Customers will also pay: 25 percent (one quarter) of business leaders admit that they will raise prices because of Obamacare, versus only two percent who say they will cut prices.
And this is New York, where the political class clings bitterly to Obamacare. What would it take to get them to admit that it is failing?
I would have thought the only areas where ObamaCare would not raise prices substantially is in the high cost regions of New England. States like New York, New Jersey and Massachusetts already had regulations of the sort the ACA mandates. Thus, I assumed the price increase you would find elsewhere would already be factored in to prices. I was naively mistaken.
Pretty amazing, isn’t it? Although, this is the employer-based market, not the individual market.
“Thus, I assumed the price increase you would find elsewhere would already be factored in to prices. I was naively mistaken.”
Apparently, so were they.
Everyone who considers themselves adept at health poilcy, who actually believed costs would go down should give up chocolate for 10 years. Let’s see: guaranteed issue. Additional regulations and taxes. Gtovernment regulation and oversight. Reduction of providers willing to take the newly covered enrollees so the others can raise rates, and entry of people with long-neglected health problems. Then converting a group-based system to individual coverage, the most administratively inefficient way to provide coverage?!!!!!
Where is there a set of conditions robust enough to actually reduce costs as opposed to an external force powerful enough to push down prices? There is a difference.
Now: There should be more recognition that these exchanges are not so universal or competent that a new system should be based on them. What, 34 states don’t even have them, 2 states failed, and other states wonder if they will continue when Federal budget support ends in 3 years. The Supreme Court will soon find that there can be no subsidies through Federal exchange arrangements.
Moreover, does anyone have the problem I have with the IRS being the one to administer the eligibility determination and the subsidies? Incompetence, political bias, extortionate findings–the IRS having your medical record? Ye Gods!
Wanda Jones,
San Francisco.
I work for a firm that is in the health insurance business. And while I have true respect for business owners, as a rule they know nothing about the health insurance business.
Many large firms have had health plans for years that included all the ACA mandates. Obamacare has no effect on their premiums. If their premiums are up 10%, there could be many causes:
– insurance companies continue to earn next to nothing on their cash;
– new technology means more surgeries
– sometimes the workforce just gets older. Every year a worker gets older, his/her health costs go up about 6%.
In small firms, the ACA has increased premiums for many firms. They have a legitimate gripe. Sometimes the increases are plus 40%.
But the New York report does not seem nuanced enough to catch this.
One problem with New York State is it seems especially prone to cater to special interests. Earlier this summer I was following legislation that further prohibited exclusive pharmacy networks. The bill died in committee but New York already had prior laws that inhibit mail-order mandatory delivery of drugs. New York has a unionized workforce. Many old, inefficient hospital are propped up with higher reimbursements. Medical spending is considered a form of economic development. Local pharmacies are protected with PBM regulations. There is a quite a bit of fraud, as with the dentist billing more than 1000 dental procedures to Medicaid in one day back in 2003. Or, it could be simply that health insurers have been squeezed in recent years and now find sufficient economic activity in the economy to ratchet up premiums a couple percentage points above trend line.
Wanda:
I agree that converting a group-based system to individual coverage could be done more efficiently
At National Prosperity Life and Health we are developing a conversion product in
Lieu of COBRA
The same product available on COBRA would be available as a permanent insurance product
As one option we are looking to partner with an insurer already on the public exchanges to function as the employer in self funded plans
We will be the primary insurer
As our risk increases and the secondary insurer’s risk reduces the secondary insurer earns commissions on risk it no longer has!
Don Levit
Treasurer of NPLH
Head of Product Development
“As one option we are looking to partner with an insurer already on the public exchanges to function as the employer in self funded plans We will be the primary insurer”
Is there anyone else in the insurance business here who can understand and explain what Mr. Levit is talking about?
Is there actually such a business as National Prosperity Life and Health? Or are we just being entertained?
“New York Employers: Health Costs Up 10 Percent Next Year, Obamacare to Blame”
That’s probably only because New York had an already highly regulated healthcare system. Had it been any other state, I bet the increases would be much higher.
John:
Everything is in place including reserves
We have several thousand lives already committed
Madison higonbotham’s president has
Called us several times in the last month wondering when he can send a portion of his clientele to us
They are the largest TPA in Texas
All we have left to do with the Texas Dept of Insurance is to provide a revised policy
You will have heard of us in the near future
Don Levit
Treasurer of National Prosperity Life and
Health
Thank you. We’ve hard that before! How about we make a deal? Once you get your license from Texas DOI, comment as much as you want. Until then, let’s take it easy on the promotion.
John:
That’s a winner!
Don Levit