Harvard geniuses on Obamacare

At a recent seminar at Harvard University, a professor described Obamacare as “not working because insurance rates going up.” Her facts are confirmed by a letter that I recently received regarding my basic ($2000 deductible) Obamacare plan: the rate in 2016 will be 18 percent higher than in 2015. But the person sitting next to me laughed at her interpretation. “I don’t think the companies that lobbied for Obamacare would characterize higher rates as ‘not working’ for them.”

[Meanwhile, the saga of my October strep throat test continues. Because of the regulations that make it impractical for the small group of doctors to do quick strep tests, my sample was sent to a local hospital. They decided to charge me $88 for the test. My insurance company had a right to purchase this service for $14, apparently, but decided not to pay any of the $14 due to the policy’s $2000 deductible. Thus the hospital generated a hardcopy bill (now buried somewhere under a stack of important catalogs and therefore unlikely to be paid any time soon) and mailed it to me. The doctor tried to charge hundreds of dollars but was beaten down to about $50 (seeĀ previous posting).]

10 Comments

  1. John Wickenden

    December 6, 2015 @ 12:40 pm

    1

    When the Us joins the civilised world and gets universal healthcare you won’t have to worry and work yourself to death to pay the bloated proportion of GDP you do now.

    ps Isn’t Obamacare a misnomer it’s the last thing he wanted he wants UH and I guess just saw the mess that was cobbled together as at least a foot in the door.
    Good for him.

  2. J. Peterson

    December 6, 2015 @ 5:28 pm

    2

    The function of American insurance is converting obscene service fees into merely expensive ones. The insured is still left with the bill (at least until the $X,000 deductible is met).

  3. George

    December 7, 2015 @ 12:12 am

    3

    There wasn’t really anything in Obamacare to drive overall costs down. Maybe if you have a bad pre-existing condition, your premiums might be less. Only about 5% or so of the population even has an Obamacare policy.

  4. jack crossfire

    December 7, 2015 @ 1:53 am

    4

    Be careful what you complain about. Mandatory long term care insurance is next. The day is not far off when all private assets are replaced by insurance policies for every conceivable expense, all held by a small number of corporations for the common good. Funny how the human mind always finds a way to reach the same outcome, even when the government isn’t allowed to do it, it finds a way to do it in the form of a private corporation standing in for the government. The modern day politburo will be the insurance company.

  5. Dave D

    December 7, 2015 @ 12:05 pm

    5

    Contrary to your chortling seat mate, the reviled insurance companies are not enjoying Obamacare either. Even with dramatic increases in premiums, UnitedHealth recently admitted a $350M loss on ACA plans in 2015, expects to lose $500M in 2016. [url=http://www.bloomberg.com/news/articles/2015-11-19/unitedhealth-may-pull-out-of-obamacare-marketplace-stock-slides](source)[/url].

    Obamacare has been successful in getting coverage for more people but largely those with expensive pre-existing conditions. In spite of the promise to keep your insurance if you like it, many individual policies were canceled for not covering everything mandated by ACA. The ACA-compliant plans are shockingly expensive–a 75% premium increase for me.

  6. Dave D

    December 7, 2015 @ 12:25 pm

    6

    Contrary to your chortling seat mate, the reviled insurance companies are not enjoying Obamacare either. Even with dramatic increases in premiums, UnitedHealth recently admitted a $350M loss on ACA plans in 2015, expects to lose $500M in 2016. [(source)](http://www.bloomberg.com/news/articles/2015-11-19/unitedhealth-may-pull-out-of-obamacare-marketplace-stock-slides).

    Obamacare has been successful in getting coverage for more people but largely those with expensive pre-existing conditions. In spite of the promise to keep your insurance if you like it, many individual policies were canceled for not covering everything mandated by ACA. The ACA-compliant plans are shockingly expensive–a 75% premium increase for me.

  7. Neal

    December 7, 2015 @ 12:56 pm

    7

    David D,

    Price increases for new ACA compliant plans were less about (relatively small dollar amount) mandated coverage items and more about the insurance company can no longer pull your coverage if you get sick and start costing them big bucks.

    In the highly regulated insurance business (both before and after Obamacare), insurance companies have a funny relationship with losses. On the one hand, they want to make a profit on every policy each year. On the other hand, driving up the cost of the system is the only way to make profits bigger because ultimately they are set (directly or indirectly) as a percent of the system’s total cost. Losses today form the basis of price increases and even higher profits tomorrow.

  8. paddy

    December 7, 2015 @ 1:57 pm

    8

    So how well do the English feel the NHS (single payer healthcare) is doing?

  9. George Macdonald

    December 7, 2015 @ 4:38 pm

    9

    Don’t know about the UK NHS, but here in the frozen north it’s not too bad. Not perfect, but it could be a lot worse. Critical care for cancer or cardiac problems is second to none. The real problem is with wait-lists for treatment of knee, hip and other joint problems for the (burgeoning) crop of codgers, of which I am one.
    Nobody goes bankrupt because of medical bills, though, or faces escalation of insurance costs.

    I wonder how much money has been spent on various e-health systems over the last decade or so. Scope and cost creep seem to be the norm.

  10. philg

    December 7, 2015 @ 5:00 pm

    10

    I don’t think the comparisons to other countries are that valuable. It would be like looking at the flat-screen TV industry in Taiwan or Korea and talking about how we could flip a switch and set up a competitive flat-screen TV industry in the U.S. There are some things where the U.S. has a track record of efficiency and some things where we have a track record of spectacular waste, inefficiency, and incompetence. Health care seems to fall into the latter category. Look at http://hspm.sph.sc.edu/courses/econ/classes/nhe08/ and http://www.usgovernmentspending.com/healthcare_spending for example. The most reasonable inference from those charts is “Buy an Airbus A380 to fly people to France when they need operations,” not “Let’s figure out how to become efficient about health care like the French.”

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