ObamaCrapCare has so many unintended consequences that an entire blog could be used for a year to lay out its deficits. In the following posting by Michael Barone, he discusses an issue that most people who are not involved with employers, HR departments and the like would ever have thought about, including the "architects" of ObamaCrapCare.
Employer's second largest cost, more than raw materials and plant and equipment, is health insurance. To be able to cut this expense drops significant dollars directly to the bottom line. If this can be done with out impacting retention, it is a major plus.
There are a number of industries where turnover is high and training minimal that can afford to provide bare bones plans, as allowed by ObamaCrapCare, those companies will be able to increase their profits and still comply with the law. The problem is that these plans, as designed by the Washington brain trust, are not what you would buy if you had the choice.
As with most things in life, health care cost and benefits usually have a high degree of correlation. If you want a program that is top of the line with few deductibles and low co-pays it will be expensive. On the other hand if you want a plan with a very high deductible (such as $10,000 or $20,000) and co-pays (as low as 50% for another $10,000), those plans are currently available and the cost is low. However, after January first that whole landscape changes.
On the first of the year, the highest deductible available will be $2500. The benefits for that plan vary, however, most will have limited visits to the doctor (2-6 per year per person), generic drugs only, and additional co-pays for hospital stays and outpatient care. It will be a very poor plan. It will cover the "essential" benefits but not much else.
As an example, over the past six weeks, yours truly has been fighting kidney stones. It is not a life or death issue, however, we have had three visits to the ER for pain, one lithotrypsy procedure (outpatient) and a stent removal (also out patient.) We have been to see doctors four times. We have not received the bills yet, however, it would not surprise us to see charges in excess of $10,000. If we had had one of the skimpy plans to which Barone writes, the we would be saddled with most of that cost.
Most people who are now praising ObamaCrapCare have not looked at the unintended outcomes. Employers will do what they can to lower costs, meaning less in benefits. Those who can will end their reliance on private insurance and will tell their people to go to the exchanges and gladly pay the lesser fine for not providing the insurance.
After a couple years of trying to keep private insurance, employers who want to take care of their employees will be forced for economic and survival reasons to send their employees to the exchanges. They won't like to do it, but will forced to do so by their competition.
Within 6 years, we suspect by 2020, most private insurance will be gone. Insurance companies will find that they cannot profitably produce and manage the product and they will get out of the market. The only remaining segments that will exist will be government and union plans (we wonder how they got so lucky??) as well as those "cadillac" plans that will still be available for the wealthy. The rest of us will have ObamaCrapCare.
Initially it will be low skilled workers who get shafted but it will not be long before the rest of us get to see how bad health care can really become under Obama's nightmare.
Conservative Tom
Employer's second largest cost, more than raw materials and plant and equipment, is health insurance. To be able to cut this expense drops significant dollars directly to the bottom line. If this can be done with out impacting retention, it is a major plus.
There are a number of industries where turnover is high and training minimal that can afford to provide bare bones plans, as allowed by ObamaCrapCare, those companies will be able to increase their profits and still comply with the law. The problem is that these plans, as designed by the Washington brain trust, are not what you would buy if you had the choice.
As with most things in life, health care cost and benefits usually have a high degree of correlation. If you want a program that is top of the line with few deductibles and low co-pays it will be expensive. On the other hand if you want a plan with a very high deductible (such as $10,000 or $20,000) and co-pays (as low as 50% for another $10,000), those plans are currently available and the cost is low. However, after January first that whole landscape changes.
On the first of the year, the highest deductible available will be $2500. The benefits for that plan vary, however, most will have limited visits to the doctor (2-6 per year per person), generic drugs only, and additional co-pays for hospital stays and outpatient care. It will be a very poor plan. It will cover the "essential" benefits but not much else.
As an example, over the past six weeks, yours truly has been fighting kidney stones. It is not a life or death issue, however, we have had three visits to the ER for pain, one lithotrypsy procedure (outpatient) and a stent removal (also out patient.) We have been to see doctors four times. We have not received the bills yet, however, it would not surprise us to see charges in excess of $10,000. If we had had one of the skimpy plans to which Barone writes, the we would be saddled with most of that cost.
Most people who are now praising ObamaCrapCare have not looked at the unintended outcomes. Employers will do what they can to lower costs, meaning less in benefits. Those who can will end their reliance on private insurance and will tell their people to go to the exchanges and gladly pay the lesser fine for not providing the insurance.
After a couple years of trying to keep private insurance, employers who want to take care of their employees will be forced for economic and survival reasons to send their employees to the exchanges. They won't like to do it, but will forced to do so by their competition.
Within 6 years, we suspect by 2020, most private insurance will be gone. Insurance companies will find that they cannot profitably produce and manage the product and they will get out of the market. The only remaining segments that will exist will be government and union plans (we wonder how they got so lucky??) as well as those "cadillac" plans that will still be available for the wealthy. The rest of us will have ObamaCrapCare.
Initially it will be low skilled workers who get shafted but it will not be long before the rest of us get to see how bad health care can really become under Obama's nightmare.
Conservative Tom
Recommend this article 
Would you like to have a "skinny" health insurance policy? Probably not. But if you're employed by a large company, you may get one, thanks to Obamacare.
That's the conclusion of Wall Street Journal reporters Christopher Weaver and Anna Wilde Mathews. They report that insurance brokers are pitching and selling "low-benefit" policies across the country.
You might be wondering what a "skinny" or "low-benefit" insurance plan is. The terms may vary, but the basic idea is that policies would cover preventive care, a limited number of doctor visits and perhaps generic drugs.
They wouldn't cover things such as surgery, hospital stays or prenatal care. That sounds similar to an auto insurance policy that reimburses you when you change the oil but not when your car gets totaled.
You might ask how Obamacare could encourage the proliferation of such policies. It was sold as a way to provide more coverage for more people, after all.
And people were told they could keep the health insurance they had.
As Weaver and Mathews explain, Obamacare's requirement that insurance policies include "essential" benefits such as mental health services apply only to small businesses with fewer than 50 employees.
But larger employers, they write, "need only cover preventive service, without a lifetime or annual dollar-value limit, in order to avoid the across-the-workforce penalty." Low-benefit plans may cost an employer only $40 to $100 a month per employee. That's less than the $2,000-per-employee penalty for providing no insurance.
"We wouldn't have anticipated that there'd be demand for these type of Band-Aid plans in 2014," the Journal quotes former White House health adviser Robert Kocher. "Our expectation was that employers would offer high-quality insurance."
Oops. It turns out that Friedrich Hayek may have been right when he wrote that central planners would never have enough information to micromanage the economy.
It's probably true that businesses trying to attract and retain high-skill employees for long-term positions have an economic incentive to offer generous and attractive health insurance. Otherwise they'd lose good people to competitors.
But the kind of businesses mentioned in the Journal story -- restaurants, retailers, assisted-living chains -- tend to employ lower-skill workers who typically work there only temporarily.
In a high-unemployment economy they may not need to offer gold-plated health insurance to get the workforce they need.
Such employers would have to pay a $3,000 penalty for each employee who buys insurance on Obamacare's health insurance exchanges. But it seems likely that many workers, especially young ones, would opt not to pay the hefty premiums for that.
The problem here is that Obamacare's architects seem to misunderstand the concept of insurance.
People buy insurance to pay for low-probability, high-cost and undesirable events. It doesn't make sense to hold onto enough cash to replace your house if it burns when you can buy an insurance policy that will cover that unlikely disaster.
But Health and Human Services Secretary Kathleen Sebelius has a different idea of what insurance is.
In response to an American Society of Actuaries report that health insurance premiums would rise 32 percent under Obamacare, she said, "Some of these folks have very high catastrophic plans that don't pay for anything unless you get hit by a bus."
Her idea apparently is that insurance should pay for just about every health care procedure.
In her defense, the World War II decision to make the cost of health insurance deductible for employers and nontaxable for employees has moved things in that direction. Many people have come to expect that.
But as the Daily Beast's Megan McArdle commented, "Coverage of routine, predictable services is not insurance at all; it's a spectacularly inefficient prepayment plan."
Some Obamacare architects, including its namesake, want to move toward a single-payer system in which government would pay all health care costs.
Many Obamacare opponents want a bigger role for markets, allowing consumers to choose insurance that covers catastrophes and paying for routine costs with tax-free (and in some cases subsidized) dollars.
But if large numbers of employees are enrolled in "skinny" health insurance plans, as the Wall Street Journal article suggests, Obamacare will have produced an unanticipated outcome no one wants.
People stuck with these policies will have insurance that pays for the equivalent of oil changes (up to six a year!) but not for the equivalent of wrecked car. Just the opposite of real insurance.
Pardon the digression from scandals. but would you please post something on the college student loan debate now going through Congress? Which option would you prefer?
ReplyDelete1. Status quo. Rates double to 6.8% on July 1.
2. The Senate bill.
3. The House bill.
4. Something else?
--David
First of all doubling the rates is dumb in an environment when you get .85% on a cd at the bank. How can the government be charging nearly 8 times that?
ReplyDeleteI have not looked at the bills, however, government should NOT be involved in the loan program. It should be done through other financial entities. No matter how much you hate the banks, if the government would let them compete for these loans, me thinks they would do much better than some bureaucrat setting up rules and regs.
t
There is no law preventing a private bank from making college loans independent of the government, but they are not much interested in doing that. It would be among the least profitable things they can do with their money. So, whether you like it or not, the government is the #1 source for college loans and that ain't changing anytime in the foreseeable future there is a huge difference between the Senate bill and the House bill.
ReplyDelete--David