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Friday, April 5, 2013

Well, Obamacare is going well...

The Patient Protection and Affordable Care Act (PPACA), affectionately called "Obamacare", was supposed to do two things: 1) protect patients, primarily those with preexisting conditions, and 2) make healthcare affordable.
Both objectives are incredibly important and while the legislation is succeeding in its first goal, the second is a massive failure.

Health Insurers Warn on Premiums
"Health insurers are privately warning brokers that premiums for many individuals and small businesses could increase sharply next year because of the health-care overhaul law, with the nation's biggest firm projecting that rates could more than double for some consumers buying their own plans.

The projections, made in sessions with brokers and agents, provide some of the most concrete evidence yet of how much insurance companies might increase prices when major provisions of the law kick in next year—a subject of rigorous debate.

The projected increases are at odds with what the Obama Administration says consumers should be expecting overall in terms of cost. The Department of Health and Human Services says that the law will "make health-care coverage more affordable and accessible," pointing to a 2009 analysis by the Congressional Budget Office that says average individual premiums, on an apples-to-apples basis, would be lower.

"Starting next year, the law will block insurers from refusing to sell coverage or setting premiums based on people's health histories, and will reduce their ability to set rates based on age. That can raise coverage prices for younger, healthier consumers, while reining them in for older, sicker ones. The rules can also affect small businesses, which sometimes pay premiums tied to employees' health status and claims history."

"Aetna Inc., in a presentation last fall to its national broker advisory council, suggested rates on individual plans not being grandfathered under the law could go up 55%, on average, and gave a figure of 29% for small business rates. Both numbers included 10 percentage points tied to medical-cost inflation, not the law. An Aetna spokesman said the numbers are "still generally in line with what we've been estimating," and represented the average impact in a typical state.

An official with Blue Cross & Blue Shield of North Carolina told a gathering of brokers last week that individual premiums could go up by as much as 40% to 50%, according to brokers who were present. A spokeswoman for the insurer said "we don't have final numbers" yet on premiums.
" (The Wall Street Journal)

"The road to hell is paved with good intentions".
Low cost healthcare for everyone is something we should all aspire to have in a (relatively) prosperous nation such as ours. I agree with the attempts to protect those with preexisting conditions and those previously deemed "uninsurable". I can also be swayed to believe that, to be sustainable, we need those who can afford it to pay for healthcare to cover the costs for those who are utterly unable to pay for their own.
While this conflicts with my beliefs in individualism, the poor will get medical treatment when they need it. Regardless, taxpayers will end up paying for this. For example, if someone can afford it, but chooses not to pay for healthcare, then gets hurt. They could potentially be bankrupted by the malady and, if they were unable to pay for the entire cost of treatment, taxpayers would end up paying for that person as well. Thus, were he compelled to pay for health insurance while healthy, at least some costs would have been paid for up front.

However, I believe implementation and cost analyses of the PPACA was completely botched and citizen reaction to the legislation was not understood at all.

In fact...

Obamacare's Target Audience Doesn't Particularly Want It
"Over at Investor's Business, the always-interesting John Merline sends word of a troubling development when it comes to Obamacare: The very people it was supposed to help the most - the uninsured - don't seem to want the damned thing.

After looking at a series of slides posted by Health and Human Services (HHS) that lay out the department's marketing plan to reel in new customers, IBD's editorial board notes,

It turns out that the Democrats and the Obama administration apparently didn't bother to investigate who these uninsured people actually are before they forced through a $1.8 trillion plan to help them.

What they've learned since is that more than half of the 48 million who the government says are uninsured aren't interested in health insurance, which is why they don't bother to buy it in the first place....

The biggest market segment identified by HHS, in fact, is what it describes as "healthy and young," who make up 48% of the uninsured population."
"Obamacare backers pushed the plan as a way to cover the 50 million Americans who didn't have health insurance coverage (and let's be clear that having health insurance isn't the same thing as having good health). After the law passed, they chucked the idea that 50 million people were going to get covered, usually dropping the number down to around 30 million. Which off the bat is a tell of some sort: Why are we spending trillions of dollars and creating a new, untested program to cover 30 million people (while leaving another 30 million out at sea)? If basic insurance coverage was the goal, wouldn't giving people some sort of voucher or payment ticket to buy insurance be a cleaner, easier solution (and one that could have been implemented overnight)? Not that such a system wouldn't have caused all sorts of unintended havoc on the status quo, but it wouldn't have created an tsunami of uncertainty and guaranteed rate hikes that are everywhere around us." (Reason)
Another problem inherent in government, is that it doesn't follow the most efficient path that the market dictates.
It paves a road it thinks is best and, whether the road is used or not, taxpayers must pay for it.

And another curious response popped up.

Doctors and an Oklahoma hospital leave the traditional healthcare and billing model... and (surprise!) costs come down!

The Obamacare Revolt: Physicians Fight Back Against the Bureaucratization of Health Care
"Dr. Ryan Neuhofel, 31, offers a rare glimpse at what it would be like to go to the doctor without massive government interference in health care. Dr. Neuhofel, based in the college town of Lawrence, Kansas, charges for his services according to an online price list that's as straightforward as a restaurant menu. A drained abscess runs $30, a pap smear, $40, a 30-minute house call, $100. Strep cultures, glucose tolerance tests, and pregnancy tests are on the house. Neuhofel doesn't accept insurance. He even barters on occasion with cash-strapped locals. One patient pays with fresh eggs and another with homemade cheese and goat's milk.

"Direct primary care," which is the industry term for Neuhofel's business model, does away with the bureaucratic hassle of insurance, which translates into much lower prices. "What people don't realize is that most doctors employ an army of people for coding, billing, and gathering payment," says Neuhofel. "That means you have to charge $200 to remove an ingrown toenail." Neuhofel charges $50.

"This model is growing in popularity. Leading practitioners of direct primary care include Seattle, Washington-based Qliance, which has raised venture capital funding from Jeff Bezos, Michael Dell, and comedian (and Reason Foundation Trustee) Drew Carey; MedLion, which is about to expand its business to five states; and AMG Medical Group, which operates several offices in New York City. Popular health care blogger Dr. Rob Lamberts has written at length about his decision to dump his traditional practice in favor of this model."

"Direct primary care is part of a larger trend of physician-entrepreneurs all across the country fighting to bring transparent prices and market forces back to health care. This is happening just as the federal government is poised to interfere with the health care market in many new and profoundly destructive ways.

Obamacare, which takes full effect in 2014, will drive up costs and erode quality—and Americans will increasingly seek out alternatives. That could bring hordes of new business to practitioners like Neuhofel, potentially offering a countervailing force to Obamacare. (One example, the Surgery Center of Oklahoma's Dr. Keith Smith, profiled for Reason TV in September, is doing big business offering cash pricing for outpatient surgery at prices about 80 percent less than at traditional hospitals.)
This is incredibly enlightening... Take 7 minutes to watch!
"The efforts of these doctors and others will undoubtedly help constrain exploding health care costs and improve care. But it's hard to fathom how within the legal constraints of Obamacare we'll see the sort of innovations that could solve the very problems that, ironically, were used to justify Obamacare's passage. As economist John Cochrane puts it, without government meddling, health insurance would be "individual, portable, life‐long, guaranteed‐renewable, transferrable, [and] competitive." And going to the doctor would be as simple and straightforward as eating out. What needs to be done to get there is painfully obvious.(Reason)
I thought this was incredibly encouraging.
I know for a fact that many doctors are discouraged by the current system and the overwhelming amount of paperwork that must be done to ensure patients are billed correctly and the hospitals can be reimbursed by health insurers. Hopefully many will take notice of what is happening at the Surgery Center of Oklahoma and similarly run clinics increase in popularity and quantity.

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