According to a study released today by the Kaiser Family Foundation, 2011 health insurance premiums for employer-sponsored family healthcare benefits rose 9 percent over last year’s prices, leaving employees to pay, on average, $4,129 and employer contributions at $10,944. The number represents a surprising rise given that increases experienced in 2010 were just 3 percent.
So, why the sudden increase?
We know that Americans are using fewer medical services since the economy took a dive as people are staying away from the doctor and putting off non-life saving surgeries, such as knee and hip replacements, until they have more confidence that they will have the money required to pay deductibles and co-pays. We also know that fewer medical services are being utilized as a result of the increased popularity of Health Safety Accounts which require deductibles in excess of $2,000 per family, and employer provided policies that have increasingly large deductibles and co-pays.
As a result, can it possibly make sense that medical costs are increasing by the 9 percent reflected in the hefty premium hikes? In a word, no.
That will not stop the anti-Obamacare forces, of course, from putting the blame squarely on healthcare reform. In a sense, I suppose the Affordable Care Act does bear some of the responsibility—if you can consider motivating the health insurers to falsely inflate their prices, by forcing them to do the right thing, to be a blamable offense.
Beginning next year, health insurers will be required to justify any increases in premium rates above 10 percent. They will further be obligated to refund money to customers if an insurer is found to have spent less than 85 percent of their premium income on medical expenses. Thus, it is hardly a stretch to conclude that the insurers are simply taking their last chance to raise premium rates before they find themselves having to be more accountable to the government, particularly when they are pretty much admitting to as much.
The Republicans have vowed to “repeal and replace” President Obama’s historic health care reform law. Now that House Republicans have muscled through a symbolic repeal bill, they will have to deliver their own alternative plan. Don’t expect much.
By: New York Times- Editorial, The Opinion Pages, January 24, 2011
There are many more slogans than details. But it is already clear that their approach would do almost nothing to control skyrocketing health care costs and would provide little help to the 50 million uninsured Americans.
When Republican leaders talk of reducing medical costs they really mean reducing insurance premiums for some people, primarily by letting the young and healthy buy insurance in states that allow the sale of skimpy policies. That won’t help older and less healthy people and would probably drive up their premiums as they flock to states whose regulations guarantee them coverage.
The Republicans have offered no coherent plan for slowing the rapid rise in medical costs that is driving up insurance premiums, Medicare and Medicaid costs, and the federal deficit. The reform law, by contrast, has multiple provisions for changing the delivery of health care in ways that should reduce costs.
As for the Republicans’ calls to reduce waste and fraud in Medicare, reform the medical malpractice system, and expand high-risk pools to cover people with pre-existing conditions, most of these ideas are already in the reform law. They could surely be strengthened if both parties worked together.
Even as it denounces reform at every turn, the Republican leadership has figured out that many Americans want the many consumer protections that come with the new law. So, once reform is repealed, the leaders are vowing to reinstate such provisions as letting young people stay on their parents’ plans until age 26, preventing insurers from canceling policies after people become sick, and barring insurers from placing caps on what they will pay.
The problem is that such requirements will drive up the cost of insurance unless they are paired with a mandate (or comparable prod) requiring that everyone buy insurance so that healthy people offset the costs of less healthy beneficiaries. Yes, that’s the same mandate the Republicans have vowed to overturn.
Many Republicans have also vowed to restore more than $130 billion worth of unjustified subsidies to private Medicare Advantage plans that is needed to help pay for the expansion of coverage under health care reform.
In coming weeks, expect to see a lot more posturing on issues that might energize the party’s conservative base or poll well with people made skittish by months of Republican exaggerations about the new reform law. They have already introduced bills making it even harder for insurance policies in new insurance exchanges to cover abortions, never mind that the law already has incredibly strict provisions.
The Party of No will also try to use its new control of the House to block implementation of reform by withholding money needed to hire people to write necessary regulations. The House Republican Study Committee has proposed legislation that would prohibit using money in the annual budget to carry out any provision of the law or to defend it in court.
The Republicans need to explain how they plan to address the problems of covering the uninsured, wrestling down medical costs and controlling the deficit. Just saying no isn’t enough.