Would You Buy a Used Car from These People?
I don’t think I have ever seen an Administration engage in so much blatant propaganda. A new government study claims that because of ObamaCare, health insurance premiums will be 14 to 20% lower than otherwise in 2014. Yet the study is not a study at all. It is completely one-sided. It misuses data from the Congressional Budget Office and other sources. It also cites only factors that might lower premiums and ignores factors that would almost certainly raise them. See this in-depth rebuttal from the health insurance industry (AHIP).
Then let’s review the bidding:
- 32 to 34 million newly insured people will try to double their consumption of health care.
- Almost everyone else, including the elderly, will have access to a wide range of new (“preventive”) services without copayment or deductible.
- Since there are no new residency openings, this huge increase in demand will be greeted by no increase in supply.
- If Andy Griffith’s promise that seniors will lose nothing is to be believed, there will have to be enormous cost-shifting from Medicare to private insurance.
- Ditto for Medicaid.
- To make matters worse, people will be allowed to game the system — paying little or no fine while they are healthy and uninsured and paying the same premium as everyone else after they get sick.
- And every employer, everywhere will have an incentive to dump the sickest, most costly employees into the newly created health insurance exchanges.
If you think after all that, premiums are going to go down, I know of a bridge in Brooklyn I’m willing to sell you at a big discount.
Everything the administration has said about health care has been propaganda from day one.
Mitch McConnell — the Sen. GOP Leader — didn’t waste any time with his comeback to the HHS report, according to a new AP story:
“More promises of lower premiums for some people at some point in the future is little comfort to the millions who are already seeing higher premiums or won’t be able to keep the coverage they have as the president promised,” McConnell said. “We need to repeal this bill and replace it with commonsense reforms.”
No, I would not buy a used car from them. Or vote for them. Or give them the time of day.
Did you notice that Sebelius withheld the information about 500 more waivers until after the State of the Union speech.
Health and Human Services has no credibility on these issues.
Agree. This is propaganda.
How could anyone in his right mind believe that spending almost $1 trillion in a Rube Golberg manner is going to cause health costs to be lower than otherwise?
I agree with you John. The government report completely ignores the incentive effects that the new health care legislation creates for consuming health care. However, what also bothers me about the government publication is that it passes of cost-shifting as if it was health care cost reducing. For example, the use of community rating and an individual mandate only shifts the cost of health insurance from older sicker people to younger healthy people. In addition, the use of government subsidies for purchasing health care only shifts the cost of the health care from individuals and families to tax payers. Unfortunately, I fear that you are correct that the incentive effects, coupled with the cost shifting programs, will overwhelm any of the cost saving measures provided in the new health care law.
Good point, Aaron. I am going to do a Health Alert on that in the near future.
Why aren’t these guys guilty of fraud? What would happen if a private insurer put out a report like this? Would there be criminal charges?
“Lower than otherwise” — so even if health care costs, or insurance premiums, double and redouble, it could always be worse.
John, it seems you are still offering pablum.
How do you know 32-34 people will DOUBLE their usage? Have you heard of the 95/5 rule of underwriting?
Preventative care is also less expensive than treating an illness.
H1B visas will keep the doctor rolls fully staffed at a decreased cost (outsourcing).
Medicare Advantage plans were getting an unjustifiable 13% subsidy that should be stopped.
Open enrollment periods will stop people from gamming the system.
Small businesses (fewer than 25 full-time employees or part-time equivalents) will receive a tax break of 35% (private) and 25% (non-profit) to insure their employees. This lowers their health care costs which enables growth.
Erik- “Preventative care is also less expensive than treating an illness.”
Ultimately, preventive care does one of two things:
1. It works, i.e. prevents a given disease, resulting in longer life and eventual death from a different disease or chronic condition.
2. It doesn’t work, resulting in need to treat the disease anyway.
Either way, I don’t think there is convincing evidence that it ultimately results in less overall health care spending when you consider the lifetime consumption of resources.
Or as Mike Cross sings- “Listen here brother, life’s just another…
terminal disease!”
We’ve given these links many times before and I don’t have time to look them up right now, but here is the bottom line:
@ Erik:
Economic studies show that insured people consume about twice as much health care as uninsured peole, other things equal.
Annual open enrollments don’t stop gaming, they merely slow it down a bit.
@ Erik and Seamus:
Preventive medicine does not save money, it costs money. The reason: The cost of screening thousands of healthy people overwhelms the savings of early detection for the one in ten thousand who has a problem.
Erik again:
Do you really want to outsource the US medical practice to foreigners?
Have you ever taken a cab ride in New York City — where half of the drivers don’t speak English. That’s not what I want our health care system to look like in another ten years.
Well Vicki, thank your for your xenophobic racist comment. If you look at the graduating classes of the top universities you’ll find they are chock full of the children of those cab drivers who can’t speak English. If you look at the upper ranks of scientists and engineers and mathematicians in this country you’ll find it chock full of people with the same English language skills of those cab drivers. There was actually a study of foreign born and educated physicians. You many not like their language skills, but their patients had better outcomes than the ones you seem to like.
Well artk, can’t we lower the cost of every thing we buy by outsourcing it to immigrant labor? Is that your solution? Would you like to see that happen for steel, autos, and in every other industry?
Also, I don’t consider it racist to want to see a doctor without a translator.
If you think foreign doctors are better trained than US doctors, why don’t we just eliminate US medical schools, save the taxpayers some money, and contract out our entire medical system to foreigners?
I don’t subscribe to the belief that the newly insured under Obamacare will automatically double their healthcare consumption. 1) Already roughly 1/3-1/2 (can’t remember the figure) of current uninsured were eligible for Medicare/Medicaid and just haven’t signed up. 2) A sizable portion of the population just don’t access healthcare until absolutely required–emergency or debilitating symptoms whether they have health insurance or not. So, yes, a portion will undoubtedly increase their medical consumption but certainly not the majority of the current uninsured.
John,
Economic studies show that 95% of people pay for 5% who max out their annual limits. So I do not buy your argument on usage. I have client/groups that are fully insured and 50 out of 100 employees will not use services at all.
Also, based on your logic regarding preventative services we should end all vaccinations. It costs more money to vaccinate the entire population than to treat one in ten thousand people who might catch whooping cough.
As far as H1B visa doctors; that is inevitable given the current stance of American physicians who want more for less. The threat of retiring than practicing under “Obamacare” will do in the profession. Besides, American physicians who do not make the “Cut” study abroad anyway. What is the difference?
@ Hoads
50% is the best estimate based on past studies. For what it’s worth, I think CBO is predicting a 40% increase.
@ Erik
It’s more in the range of 5% consume 50% for most groups. But it’s not the same 5% every year.
Vaccinations is one of the few areas where preventive care does pay for itself. Other areas are smoking cessation advice and prenatal care for at-risk mothers. But almost all other preventive care does not pay for itself.
Now, just because a test doesn’t pay for itself does not mean it is wasteful, or that people shouldn’t buy it. It does imply that peole should make their own choices with their own money, however.
John, its the “cost effectiveness” of vaccination the exact opposite. Given the childhood diseases prevented had very high fatality rates, isn’t vaccination a lost cost procedure that results in much higher medical expenses?