Obamacare

Would ObamaCare Control Health Insurance Premium Costs?

|

In response to California health insurer's proposed 39 percent hike in individual market premiums, Paul Krugman is saying that health care reform is necessary to control such massive insurance price hikes. The administration is saying as much too, even preparing a quick-and-dirty memo on premium spikes across the country.

Here's the problem with that claim: Premium increases in the California market are likely due to a combination of underpricing in a volatile market and state insurance regulations that drive up costs and restrict insurers from accurately pricing their product. And the experience of Massachusetts, the one state in which the key elements of ObamaCare already exist, tells us that reform is no protection against rising health care premium costs—and may, in fact, contribute to the problem.

Let's start with California's regulations. Here's the Wall Street Journal explaining how California's insurance regulations helped contribute to the expense:

Wellpoint's rate hikes are the direct result of the Golden State's insurance regulations—the kind that Democrats want to impose on all 50 states. Under federal Cobra rules, the unemployed are allowed to keep their job-related health benefits for 18 to 36 months. California then goes further and bars Anthem from dropping these customers even after they have exhausted Cobra. California also caps what Anthem can charge these post-Cobra customers.

Most other states direct these customers to high-risk pools that are partly subsidized, but California requires the individual market to absorb the customers and their costs. Even as California insurers have had to keep insuring these typically older and sicker patients, the recession has driven many younger, healthier policy holders to drop their insurance—leaving fewer customers to fund a more expensive insurance pool.

This explains why Anthem lost $58 million in California on its post-Cobra customers in 2009. If WellPoint didn't raise premiums amid these losses, it would soon be under assault from its shareholders, if not out of business.

The logic here, which you'd think the administration would understand, is actually really simple: Make it more expensive for insurers to do business, and insurance will become more expensive. Take Massachusetts, for example, where, in the wake of ObamaCare style reform, ongoing double digit rate hikes and faster than average medical cost-growrth have incurred the wrath of the governor's office, which is now threatening to review—and perhaps refuse—health insurance rate hikes in the state. (The one argument that insurance reform supporters have is that the state's individual market premiums have dropped. Problem is, that's likely a result of balancing out other regulations—and no matter what, Massachusetts' premiums are still the second most expensive in the nation.)

Meanwhile, as University of Pennsylvania economist Mark Pauly points out in an email to Cato health policy analyst Michael Cannon, individual market premiums "are very volatile so you can always find some insurer jumping their premium a lot…Consumers then usually move to the insurer that did not.  I know the … California story: Wellpoint had tried aggressively to expand its individual business by setting low premiums, and I think realized the underpricing to gain market share did not make sense in a recession, so they put premiums back up where they should be."

What about the administration's report noting rising premiums across the country? It worriedly points to big jumps in health insurance premiums in states like Maine and Washington. Thing is, both of those states "reformed" their insurance markets by passing guaranteed issue and community rating—regulations that, by forcing insurers to take all comers and charge them equal rates regardless of risk level, send insurance markets into an adverse selection death spiral.

None of this is really surprising considering the Congressional Budget Office has already projected that individual premiums would rise as much as 13 percent under the stricter regulations imposed by ObamaCare; some people would see cheaper rates, yes, but only because of subsidies. In other words, contrary to what the administration and its supporters claim, under ObamaCare, insurance would probably get more expensive, and any decrease in rates for some would come at taxpayer expense.

Advertisement

NEXT: A Conspiracy So Immense

Editor's Note: We invite comments and request that they be civil and on-topic. We do not moderate or assume any responsibility for comments, which are owned by the readers who post them. Comments do not represent the views of Reason.com or Reason Foundation. We reserve the right to delete any comment for any reason at any time. Report abuses.

  1. Why not control the prices of health care itself?

    1. The fundamental problem with price controls: where do you stop?

      Nothing in a vibrant economy exists in a vacuum.

  2. But we could pass a law stopping them from raising premiums! This is so simple! Why can’t you libertarians understand this?

    1. Diane Feinstein is on it.

  3. . Thing is, both of those states “reformed” their insurance markets by passing guaranteed issue and community rating?regulations that, by forcing insurers to take all comers and charge them equal rates regardless of risk level, send insurance markets into an adverse selection death spiral.

    So why is this death spiral happening in CA, which DOESN’T have these laws? The answer is that adverse selection is inherent to the health insurance market, and indeed, any insurance market. In just happens that the nature of health care itself makes the adverse selection problem much worse for this particular market.

    The “free market” theory you love is based on assumptions that just don’t work in the insurance market. No one has ever found a viable solution for this other than for the government to insure everyone all the time.

    What really is absurd is that the Ryan budget plan you guys have been drooling over the last few weeks actually reintroduces the adverse-selection market failure to Medicare. What a collossally idiotic idea, combining government and taxes with the worst elements of a free market. *facepalm*

    1. Re: Chad,

      So why is this death spiral happening in CA, which DOESN’T have these laws?

      Could it be because there are only a very few insurance companies allowed to compete in CA?

      The answer is that adverse selection is inherent to the health insurance market, and indeed, any insurance market.

      Sure. Which is why there are no more insurance companies in existence – all of them fold because they run out of low risk customers!

      No, wait . . .

      In just happens that the nature of health care itself makes the adverse selection problem much worse for this particular market.

      Nothing to do with the coercive mandates each State imposes on the insurance companies to cover everything they can think of . . . nah. Crazy Talk.

      The “free market” theory you love is based on assumptions that just don’t work in the insurance market.

      Well, that’s not true. Meteor insurance works pretty well, so does death by Banshee insurance . . .

      Actually, insurance works pretty well SANS interventions from the do-gooders in the State.

      No one has ever found a viable solution for this other than for the government to insure everyone all the time.

      Yes, because it works so well everywhere else:

      http://www.city-journal.org/ht…..hcare.html

      http://www.marketwire.com/pres…..601683.htm

    2. Chad|2.19.10 @ 6:38PM|#
      “So why is this death spiral”
      Prove “death spiral”.

    3. Chad|2.19.10 @ 6:38PM|#
      “The “free market” theory you love is based on assumptions that just don’t work in the insurance market. No one has ever found a viable solution for this other than for the government to insure everyone all the time.”
      Cite please.
      And, no, I *will not* search the web to find some bogus sites to support your bogus claims.
      Let me make this clear: *You* made the claim, you do your homework to support your claim.

      1. I chose to cite any 100-level economic textbook of your choice, chapter one, page one.

        Clearly, you never read one.

        1. Chad,

          If you want to be taken seriously, please cite from a book about Economics, not rehashed Keynesianism.

          1. Chad prefers the Book of Moron.

          2. Ahh, OM, arguing against basic economics. How low do you need to go?

            1. Arguing the market is incapable of providing that which it is already providing is arguing against basic economics…. Damn you’re dense.

        2. Really? The first page of any economics text says that the only workable approach to insurance is for the government to insure everyone all the time?

          A citation that does not support your claim is even worse than no citation at all.

          1. I was talking about the assumptions of market theory, which are certainly chapter one material.

            1. You can’t be serious? Even IF the government started to insure everyone for everything, the market is still there working right along. Supply/demand… all of that doesn’t disappear just because the government imposed additional restrictions.

              All the government can do is try to pervert the market towards one end or another. & while both parties seem fond of this, attempts to control the market has always backfired.

              Rent ceilings for more affordable housing?

              Subsidized public transportation to reduce congestion?

              Incent people to kill endangered species by claiming to protect them?

              Unreal as it might seem to you, this is just another government myth that is impossible:

              Guaranteed insurance for lower health care costs?

    4. The “free market” theory you love is based on assumptions that just don’t work in the insurance market. No one has ever found a viable solution for this other than for the government to insure everyone all the time.

      That must explain why the government is taking over life, fire, auto, and disability insurance.

  4. The insurers are raising their rates because they can. The reason they can, is that government protects them from competition.

    -jcr

  5. Actually, where I live in California has the lowest health insurance rates for individuals in the country; at least, it was as of a few years ago.

    The Anthem increase was for individual policies, which is unrelated to COBRA.

    I firmly believe the rate increase was a preemptive measure. I got the letter just as ObamaCare was passing.

    1. So a company is raising rates because something MIGHT happen that MIGHT raise their costs a few years from now?

      If companies could raise prices on such pure speculation, they would have already raised them long ago. In the real world, your costs go up first, and you beg and beg and beg your customers until they finally relent and accept a price increase.

      1. Re: Chad,

        So a company is raising rates because something MIGHT happen that MIGHT raise their costs a few years from now?

        This is not unusual, although the other reason is the crowding in by customers that lose their employer-provided insurance due to unemployment.

        In the real world, your costs go up first, and you beg and beg and beg your customers until they finally relent and accept a price increase.

        This is not true, at all. Companies raise their prices on expected increases in energy costs or raw material costs EVERY time, especially if there are few alternatives or substitutions.

      2. Chad is so cute when he lectures us on “the real world”. You just want to wrap him all up in fleece, take him home, and drown him in the bathtub.

        1. Oh, dear I do believe I have done myself and injury.

          I shouldn’t laugh like that.

        2. He is doomed to perish in the fires of hell.

        3. Goddamn it, I tried. Damn those interfering cops!

        4. Be sure to wash the fleece afterward just to be sure it is clean.

      3. In the real world, your costs go up first, and you beg and beg and beg your customers until they finally relent and accept a price increase.

        I hate to break it to you but in the real world, insurances companies don’t sell products, they sell financial security. They contract to provide funds in the case of a statistical risk appears.

        Now, this is the radical idea that will blow your mind! It turns out that in order to ensure you have enough money a few months down the road to pay out claims, you have to raise premiums now. You just can’t run out and get more money on the spur of the moment. In fact, the legal accounting requirements for insurance companies require them to anticipate spikes months down the road.

        What is your alternative? Should insurance companies just raise premiums as needed every month, week or day? Imagine how you would bitch and moan if your insurance premiums fluctuated every month based on how many people got sick or in response to the governments latest great idea.

        1. Again, months, not years. No bill before congress will affect anything of substance immediately.

          Since they typically bill monthly, there is nothing stopping them from adjusting their prices monthly as well, unless they sign a contract stating otherwise. Indeed, from my experience, they change at least once a year and often more…and no, I don’t bitch and moan about it.

      4. Chad|2.19.10 @ 7:13PM|#
        “So a company is raising rates because something MIGHT happen that MIGHT raise their costs a few years from now?”
        Uh, what else would a company do? Leave it, like S/S, until failure is imminent? Are you suggesting that companies should not plan at all?

      5. So, you admit that insurance companies are robbing anybody, since by your own admission they are at teh mercy of their customers.

        And they must not be making too much of a profit, since they must go begging for increases only long after their costs have gone up.

        1. Have I ever said anywhere that insurance companies were at fault?

          It is the market that is hopelessly broken. They are just playing by the rules of the game.

          1. It is market intervention at work here.
            It has been broken for decades.

            The concern about health care is affordability.

            Some seem to focus on the price of coverage.

            How about looking at ability to pay?

            How many days of the week do people have to work to support government entitlement programs, subsidies of all kinds, and over 700 military bases in over 100 countries around the world?

            The rich cannot be made to pay the costs of producing resources for all of that, it must come out of the living standards of those that labor to produce value.

            Always has and always will.

            Ability to pay.

          2. lol – I’m not sure where you got the idea that the government’s knowledge would ever be better than the aggregate knowledge of the market, but it’s cute in a stupid sort of way.

            If the case is the government has the ability and the power and the knowledge to control the health care market better than all those individual transactions – why even have elections?

            I’m sure they’d be more than capable of understanding voting trends before hand and pick much better Representatives than that stupid market place of ideas known as voting…

  6. This insurance “reform” bill, not a health care bill, will do nothing to cotrol premiums, nothing to control health care costs and nothing to preserve coverage.

    First we need to restore competition between hosptials and other health care providers for cusotmers; then we need to restore competition between insurance companies. The free purchase and sale will not only put downward pressure on premiums, it would force the states to rethink their regulatory structure in order for their local businesses to compete or to keep those businesses in state.

    Bringing down health care costs and insurance premiums through competition will make coverage more affordable for people who currently chose not to pay, increasing the number covered.

    Removing monopoly protections, tort reform and greater incentives for charitable support of indigent or uninsured patients would also help reduce costs. Government mandates prohibiting hospitals from turning away emergency room patients is probably the most expensive possible way to assist the uninsured.

    Allow unlimited deductions for charitable contributions, in particular to community health centers, free clinics and to the types of charitable funds/oraganizations that used to assist patients who could not afford their care.

    I’m biding my time waiting first for approval and then to be added to our regional heart transplant list. All I see in the new proposals is increases in my own premiums, a potential tax on those premiums or reductions in my coverage bring the premiums below the tax thresholds. No matter which one happens, they make it less likely that I will receive my transplant or the care that may be needed to keep me going until a suitable donor organ becomes available.

    The fear and anxiety these plans cause me, and the contant threats by Cogress and the Administration to force these unconstititional and ill advised “reforms” on citizens who do not want the plans, is enough to cause me palpitations, shortness of breath and to make my days of waiting very unpleasant.

  7. In response to California health insurer’s proposed 39 percent hike in individual market premiums, Paul Krugman is saying that health care reform is necessary to control such massive insurance price hikes.

    Well, you have to realize that Krugman is he High Priest of the Non Sequitur.

    He does what he does because that is what he does.

  8. Old Mexican|2.19.10 @ 7:24PM|#

    Could it be because there are only a very few insurance companies allowed to compete in CA?

    In about one minute, I was able to find a dozen. This leads me to conclude, yet again, that you are either a liar who just makes up anything he wants, or you are a collosal moron. Which is it?

    This is not true, at all. Companies raise their prices on expected increases in energy costs or raw material costs EVERY time, especially if there are few alternatives or substitutions.

    And this just proves you have never worked in the real word, either.

    1. And Choad misspells “colossal” while calling someone else a moron. joe’z law strikes again. Couldn’t happen to a nicer sockpuppet.

      1. You know you have lost all hope of winning an argument when you start nitpicking spelling and grammar.

        Thanks for conceding that OM is hopeless.

        1. Choad, which one of the Jonas Brothers do you find the cutest? I think it’s Nick.

          1. Epi, you missed: And this just proves you have never worked in the real word, either.

            1. Hey, I wanted to leave some meat around for the rest of you to chew on. Think of it as professional courtesy.

    2. Re: Chad,

      In about one minute, I was able to find a dozen.

      There are about one thousand, three hundred different health insurance companies around the US, little Chad (that’s 1,300 in case you are unable to write and read checks). And you gloat because you found around a dozen that operate in California?

      And this just proves you have never worked in the real word, either.

      I work in Procurement, Chad, and what I said happens all the time, so don’t even begin to lecture me on the “real world”. On the real world, people make money by working for it, not by asking government for favors, like a spineless thief (i.e. a socialist)

      1. A dozen is more than enough to prevent collusion. Beyond that, it is meaningless. How many markets do you deal with on a regular basis with a dozen or fewer competitors? Lots, actually.

        Since you work in procurement, you know you would laugh in the face of any supplier who said “Well, we have to charge you more for this order, because we think oil prices will go up next year”. Now, if you talking about a long-term contract, that would be a different matter. But that is not what we were talking about. We are talking about today’s price.

        1. As someone who was an actual health insurance underwriter, Chad — STFU. You don’t have a clue about what you prattle on about.

          Group health insurers set rates for groups months in advance of their renewals, for terms usually lasting one year, which means that they have to project out sometimes rapidly escalating costs and utilization 15-18 months in advance. If the rates were too low for the previous renewal, they have to play catch up on that AND then add on the increase for the future. I’ve renewed books of business that had AVERAGE rate increases of 100% — and then that book still lost money.

          1. So, Mr Underwriter…why would a bill that MIGHT pass, and wouldn’t change a damned thing for four years affect your rates for 2011, which by your own admission is what you are planning now?

            IF it were passed and IF it were 2013, you would have a point.

        2. Oil is a product that is consumed in the short term. Renewals of insurance contracts, as pointed out above, aren’t.

          Please STFU if you don’t understand that oil and insurance are entirely different products and behave differently in the marketplace when being priced.

        3. you know you would laugh in the face of any supplier who said “Well, we have to charge you more for this order, because we think oil prices will go up next year”.

          Ummm, actually, if you were selling oil futures (which is more comparable to insurance than a tanker load of gasoline ready to be pumped into gas tanks), no one in their right mind would sell you those futures while ignoring where they think those prices would go.

          1. We aren’t talking about oil futures. We are talking about health insurance, which typically has no forward contract at all. Therefore, any potential costs in the future are irrelevant.

            1. Re: Chad,

              We are talking about health insurance, which typically has no forward contract at all. Therefore, any potential costs in the future are irrelevant.

              That’s an interesting assertion about an industry that’s in the business of hedging RISK.

              1. Chad’s so cute when he pretends to know what he’s talking about, isn’t he?

                Yeah, I don’t think so either.

                -jcr

        4. In fact, gas stations do this all the time.

          The station that charges $3/gal. for gas today that was $2.90 yesterday didn’t suddenly get a shipment of $3 gas. They saw the prices on the wholesale market/futures and raised their prices in anticipation of tomorrows $3 gas.

          1. But what futures are they basing their prices on? Next months, not those several years down the line, which are wholly irrelevant.

        5. Re: Chad,

          A dozen is more than enough to prevent collusion.

          Idiot. Nobody talked about collusion. This is about artificially limiting the supply through mandates. Only a FEW insurance companies can come close to supply their customers and still cover all the different services required by the State. That increases COST.

          Read economics before you entangle yourself in a conversation with adults.

        6. A dozen is more than enough to prevent collusion

          Why bother colluding, when your lobbyists can just get the legislature to mandate the terms they have to offer? There’s a reason why their offerings are so similar, you idiot.

          -jcr

    3. Chad|2.19.10 @ 7:51PM|#
      “Old Mexican|2.19.10 @ 7:24PM|#
      Could it be because there are only a very few insurance companies allowed to compete in CA?

      In about one minute, I was able to find a dozen.”

      In which case, there’s no problem at all, right? Those who find the new rates obnoxious can go to one of those others, right?
      So what is your point? Might it be that you’re lying about those ‘others’? Or are you lying about people ‘forced’ to pay higher rates?
      One or the other….

  9. Meh- any article that uses Murdoch’s
    Wall Street Journal is merely an exercise in hubris… one may as well use Rush, or more aptly Faux News.

    1. What an easy way to confidently dismiss any potential facts given: kill the messenger.

      Easy, but childish.

  10. Under federal Cobra rules, the unemployed are allowed to keep their job-related health benefits for 18 to 36 months. California then goes further and bars Anthem from dropping these customers even after they have exhausted Cobra. California also caps what Anthem can charge these post-Cobra customers.

    IMO, the problem here is not COBRA or the requirement to keep covering these customers, but the price cap.

    It’s in the insurers interest to get rid of people after they have started getting ill, or even after a few years of luck. But it is the employer-based system which allows that. In an individual insurance market, most people would probably keep the same policies. And insurers can’t just dump them as soon as they started getting sick, as that would negate the whole point of buying insurance. So why let insurers off the hook just because it was employer-based insurance?

    Moreover, letting people continue on the same plans would help transition people off employer based insurance.

    1. That’s an interesting point. In an individual market, health insurance could work like term life insurance. The sooner you start paying in (and higher your deductible), the cheaper your premiums.

    2. Sorry, Hazel that wasn’t your point. It was a tangential thought that occurred to me while reading your post.

      1. Yes, but it’s also a thought that I’ve had.

        The reason for the regulation is ultimately that other regulations have encouraged employer-based insurance, which allows insurance companies to effectively renege on the insurance contract when the individual loses or changes jobs.

        So we’ve be better off without the original regulation in the first place, but it’s ultimately stupid to argue that the insurance companies should just get to drop customers they don’t like after they’ve paid into a policy for several years (or their employer has on their behalf).

  11. And as always, the liberal answer to the crisis of premiums going up by “as much as” 39%, is to increase the premiums paid by healthy, voluntarily uninsured people by infinity percent.

  12. The logic here, which you’d think wish the administration would understand, is actually really simple: Make it more expensive for insurers to do business, and insurance will become more expensive.

    FTFY

  13. Can anyone point to a single aspect of the abortion that is in the Obama “Healt Care Reform” package, so called, that increases the supply of medical services in the U.S?

    Any loosening on licensing restrictions?

    Relaxation on the numerical ceilings placed on hospital beds or the number of graduates medical schools are permitted to produce?

    So what we have is mandates for people to purchase insurance, which incencitives more consumption with no additional supply being placed on the market.

    Hmm, when you restrict supply, and shift the demand curve higher both in the price and units directions, I wonder where the market clearing price is going to go?

    1. Actually, a number of medical schools have opened in the last couple years, after a long drought.

      Clearly, increasing the artificial restrictions on the supply of medical services will help matters.

      1. “Clearly, increasing the artificial restrictions on the supply of medical services will help matters.”

        Hey – you got that one right! Good job!

        *looks on wistfully, filled with hope against hope*

        1. I am very much anti-union, including the AMA cartel. Our doctors are over-paid relative to other career paths and their international peers. It is time they took one in the face for the team.

      2. Clearly, increasing the artificial restrictions on the supply of medical services will help matters.

        You fucked up and left “Chad” in the name field.

      3. Re: Chad,

        Clearly, increasing the artificial restrictions on the supply of medical services will help matters.

        That’s not true, it is the market that’s broken, Chad told me a few posts ago.

        Oh, I’m, sorry Chad! I didn’t know it was you!

    2. where the market clearing price is going to go

      Paul Krugman told me it’s going right in the pockets of the evil, evil insurance korporashuns. So that must be true.

      You have asked many of the relevant questions – therefore, you must be punished. Pay no attention to that man behind the curtain, nothing to see here, move along, move along…

  14. To the original point of the article:

    Obamacare will make insurance more expensive, in all likelyhood. Of course, it will also be a better product, and the trade-off is a good one for most people. The price and quality increases largely come from the restrictions on dumping sick people. Heaven forbid we pay more for insurance that actually insures us when we need it.

    1. Re: Chad,

      We are talking about health insurance, which typically has no forward contract at all. Therefore, any potential costs in the future are irrelevant.

      That’s an interesting assertion about an industry that’s in the business of hedging RISK.

    2. it will also be a better product,

      Chad, you really better find yourself a competent financial guardian before some guy from Nigeria cleans you out.

      -jcr

      1. lol@better – see here where they once intended to let you get your insurance through the DMV.

        That’s got to help…. right?

  15. Chad|2.19.10 @ 10:28PM|#
    “To the original point of the article:
    Obamacare will make insurance more expensive, in all likelyhood. Of course, it will also be a better product,”

    Cite please.

    1. Of course, it will also be a better product,”

      There’s your citation. Mere assertion, in the tradition of the left, is all that’s required.

      Fiat economics.

  16. First, before anything else is written, you must explain what value is added to medical care by insurance agents? Explain how the energy and resources used in the administration of the health insurance industry isn’t a complete waste of those resources as the practice of medicine does not and has not in human history to my knowledge, required an insurance agent?

    1. Uh, are you serious? Can you imagine a company which doesn’t have administration? Which doesn’t have sales people?
      If you can pull that off, I’ll invest instantly! I’ll bet you have no clue as to how businesses are organized or run.

      1. No, but I can imagine something like Medicare, which spends just a couple percent total on overhead, profits, and advertising…and insurance companies, which spend ten times that on the same things.

        1. Choad, who do you think is on track to win The Biggest Loser this season?

        2. Re: Chad,

          We are talking about health insurance, which typically has no forward contract at all. Therefore, any potential costs in the future are irrelevant.

          That’s an interesting assertion about an industry that’s in the business of hedging RISK.

          1. They aren’t hedging risk, their customers are. You seem to have the business model backwards.

            1. They’re both hedging risk. That’s why insurance companies prefer to cover well-defined groups of people (who more likely than not contain more healthy than unhealthy people) rather than individuals.

        3. Actually, Chad, that assertion is completely false. Medicare has a “low overhead” because the services it provides costs so much more, thus pushing the overhead costs lower as a percentage of the total cost. Medicare also does pretty much nothing to prevent fraud – lots of $2000 “recovery room” charges for Granny to sit in the waiting room reading a magazine – while private insurers devote 10 – 20 of administrative overhead investigating fraud claims. Per patient, Medicare costs about 25% more. See here http://timerealclearpolitics.f…..costs1.gif for more.

          1. http://www.angrybearblog.com/2…..-high.html

            This is why you never get your data from a right wing think tank, who built upon the “data” from another right wing think tank, repeat ad naseum.

            And please don’t cite .gifs. That’s a real pain the heiney.

      2. You’re comparing an industry that makes billions a year in profit with secretaries? That’s a lot to spend on appointment setters. Do other countries spend as much on secretarial duties for health care instituions? How far are you willing to go round and round in circles before you actually use some semblance of reason?

        1. Yeah! Where do the owners and investors get off thinking they should make a profit – evil f**kers.

          Idiot

  17. Peter,”Premium increases in the California market are likely due to a combination of underpricing in a volatile market and state insurance regulations that drive up costs and restrict insurers from accurately pricing their product.” Well, even they didn’t try that piece of merde: “Anthem…said its proposed rates reflect anticipated medical costs”. California law requires that 70 cents of every premium dollar must be spent on medical care. Compliance will be an issue because medical cost inflation is at 10-15%. No one is buying the need for a 39% increase and Anthem is backtracking with their announcement of a delay on the hike.

  18. “This explains why Anthem lost $58 million in California on its post-Cobra customers in 2009.” Hmm, it explains selective reporting: “WellPoint Inc. reported a $4.75 billion profit in the last quarter of 2009”.

  19. Just went to eHealthInsurance, was quoted a rate of $323/month for $2500 deductible for a family of 4 with parents in their 40’s, in the zip 90210…by Anthem. In fact, Anthem had all the best rates. Now, I don’t know if CA allows underwriting, or if Anthem does it (I have BCBS in TX and they don’t underwrite)…but this seems quite reasonable pricing to me. In fact, its less than I pay here.

    1. Pete,
      A) They have delayed the rate hike
      B) They plan to raise rates several time during the year instead of the traditional 6 months to a year.
      C) 90210 is a an expensive zip code. Why don’t you try 90008.

  20. Itll never happen. The people that actually make the decisions have been bought and paid for.

    Jes
    http://www.anonymous-tools.se.tc

  21. I always find it funny to see so many libertarians be so casually dismissive of someone making Chad’s arguments. It’s all of the ‘you don’t know about economics!’ or ‘you must be some sockpuppet’ ot such. This kind of thing is said with a straight face even though 1. the number of actual libertarian economists are probably a minority of that field and 2. Chad’s viewpoint is one that regularly wins elections while that of the dismissers are lucky to brak 1%. Is this a political movement? You should try PERSUADING people since you are an ineffectual minority right now. Everything else is just petting your own back and congratulating yourselves on your purity…

    1. Chad is immune to persuasion; he must be mock-stroyed.

    2. 2. Chad’s viewpoint is one that regularly wins elections while that of the dismissers are lucky to brak 1%.

      Are you making the bandwagon argument?

    3. What gets me is that despite the fact that laissez faire economics, trickle down and deregulation have been the law of the land for 3 decades and we have seen clearly whether it works or it doesn’t.

      Insurance agents add zero value to medical care and spending 10s of billions for administrative costs is unconscionable.

      1. Ah, let me finish the first thought….despite the fact that these economic theories have thoroughly put to the test, and the results would indicate failure, the same theories continue to be bandied about by people who should know better. However, it appears that that like any religious sect, these people cannot be pried from their dogma despite an avalanche of evidence to the contrary.

      2. Insurance agents add zero value to medical care and spending 10s of billions for administrative costs is unconscionable.

        Does it work the same way regarding auto, fire, life, and disability insurance?

        1. No, it’s apples and oranges. The primary purpose of insurance companies are insurance, whether car or home, therefore they add value. The primary purpose of medical care is the medical care of humans in which insurance agents play no role other than as middle men and representatives of a beauracracy that is not necessary to the practice of medicine.

          1. The point of medical insurance was originally to cover catastrophic healthcare costs. But somewhere down the line it got corrupted into paying for everything. People absolutely should be paying out of pocket for routine healthcare expenses.

            1. The question is why do they have to pay to support a huge private bureaucracy? Why not pay the doctor directly so that all payment goes to care with a fraction for administration? The health care industry is a drain on resources.

              1. You’ve gotta be one of those people who think the US shouldn’t have a military, or public schools or FDIC or the interstate highway system. Is that it? That would at least be consistent.

                1. The question is why do they have to pay to support a huge private bureaucracy? Why not pay the doctor directly so that all payment goes to care with a fraction for administration?

                  I’m not sure what you’re arguing against. Nobody has to buy insurance, and plenty of doctors allow you to pay out of pocket.

                  You’ve gotta be one of those people who think the US shouldn’t have a military, or public schools or FDIC or the interstate highway system. Is that it? That would at least be consistent.

                  We should have a military and a justice system; nothing else. The government exists only to secure individual liberty. Perfectly consistent.

                  1. I’m arguing against the necessity for an entity to act as a middle man between doctor and patient. I’m also arguing for single payer, the single most efficient way of delivering health care at large.

                    And the military should be unregulated right? Otherwise you might end up with a book full of regulations. Just cut the military a check and tell them not spend it all in one place. So following your advice, we’d have no interstate highway system and no internet.

                    You’re entire arguement that the govt’s only role is a cop out. You don’t even believe it for a second, and when you offer that as an explanation, it’s just a cheap way to end a debate.

                    1. I’m arguing against the necessity for an entity to act as a middle man between doctor and patient. I’m also arguing for single payer, the single most efficient way of delivering health care at large.

                      You can’t simultaneously be arguing both. If you’re arguing for single-payer, then not only are you arguing for a middleman, you’re arguing that nobody else should be allowed to choose the middleman (or to have no middleman at all).

                      And the military should be unregulated right? Otherwise you might end up with a book full of regulations.

                      Sure, you’ll end up with regulations governing the military. When did I ever say I oppose such regulations?

                      So following your advice, we’d have no interstate highway system and no internet.

                      The internet grew out of military research. You might recall my mentioning that national defense is a legitimate province of government. But even if it hadn’t, private industry was already experimenting with similar technologies at the time. There’s nothing preventing private actors from providing interstate highways either. Lets just say that roads are one of the least objectionable government activities though; if we were only arguing over roads we’d already be in libertopia.

                      You’re entire arguement that the govt’s only role is a cop out. You don’t even believe it for a second, and when you offer that as an explanation, it’s just a cheap way to end a debate.

                      Okay, Miss Cleo.

                    2. And without an agency to collect taxes Opie, how do you exactly pay for this military?

                    3. More clearly: I’m arguing against the necessity for a FOR PROFIT entity to act as a middle man between doctor and patient. I’m also arguing for single payer, the single most efficient way of delivering health care at large.

                    4. What about the doctors and nurses and staff? Are they evil making a profit over their basic needs?

                      Or is it only administrators and owners who are evil?

          2. No, it’s apples and oranges. The primary purpose of insurance companies are insurance, whether car or home, therefore they add value. The primary purpose of medical care is the medical care of humans in which insurance agents play no role other than as middle men and representatives of a beauracracy that is not necessary to the practice of medicine.

            How does insurance add value?

      3. What gets me is that despite the fact that laissez faire economics, trickle down and deregulation have been the law of the land for 3 decades and we have seen clearly whether it works or it doesn’t.

        In other words, you have no clue what you’re talking about. Why don’t you take a look at the size of the Federal Register?

        1. In other words you have no clue what your talking about otherwise you’d be more specific about what your talking about instead of pointing me to a large tome to peruse without any idea of what I’m supposed to be looking for. Oh you mean the Federal Register is big? That’s right I forget that as long one regulation exists you geniuses think there’s too much regulation. Weak sauce.

          1. Don’t get cute. 80,000+ pages of regulations pretty nicely disproves your theory that we’ve been living in some laissez faire dreamland. Words have meanings.

          2. Also, just yelling “Deregulation!” doesn’t make it so. Here’s a look at the massive expansion of government regulations since the Johnson Administration.

            1. Really, you think private firms don’t have reams and reams of their own rules and regs? Give me a break. Any entity consisting of more than a few dozen individuals will eventually have many rules. In a nation this large with as much economic activity and as many people as we have, there’s going to be reams of this stuff. But thanks for the link, it’s a clear indicator of what hypocrites conservatives are and that they only accuse others of what they themselves are guilty of.

              1. Let’s take a look at the Libertarian Party platform shall we?
                ‘We support a clean and healthy environment and sensible use of our natural resources. Private landowners and conservation groups have a vested interest in maintaining natural resources. Pollution and misuse of resources cause damage to our ecosystem. Governments, unlike private businesses, are unaccountable for such damage done to our environment and have a terrible track record when it comes to environmental protection. Protecting the environment requires a clear definition and enforcement of individual rights in resources like land, water, air, and wildlife. Free markets and property rights stimulate the technological innovations and behavioral changes required to protect our environment and ecosystems. We realize that our planet’s climate is constantly changing, but environmental advocates and social pressure are the most effective means of changing public behavior.’
                POOF! Through magic, the Libertarian Party is in power and has both houses. How does the Libertarian Party implement this policy? Do you have to….gulp….start writing things down? OH NO! That’s a rule or regulation! The platform says ‘the environment’ needs a clear definition? What is that definition? Will it be…..gulp….written down? THE SKY IS FALLING! Will whatever’s been written down have to be kept and stored? Go ahead, go through your party’s platform and tell me how any of it is implemented without rules and regulations being formed.

              2. I don’t care what rules or regulations private firms have because I can choose which private firms to interact with. That’s not true of government.

            2. My God, I’ve been spending some time with the Libertarian platform. Really, the position of the Libertarian party is to revert to the 19th century? It’s completely unworkable, what’s worse, each line in the platform requires legal definitions and policies to implement. If you think this platform wouldn’t necessitate vast regulations and reams of definitions and addendums you’re smoking the good shit. You want a military, but want no taxes raised to pay for it, or at least you want no agency with the power to collect those taxes and no penalty for not paying them. Which means you don’t think we should have a military. Which is fine I guess, you should be more honest though, if not with me, at least with yourself.

              It’s become apparent from reading the platform that it’s sole reason for existence, as it is unworkable in the real modern world, is as an easy cop out that allows Libertarians to bow out of debate gracefully.

              1. Let me make this easy for you, so you don’t waste any more time: the Libertarian Party does not represent me and has never gotten a vote from me.

                1. No, you’re clearly a Republican. Not a compliment.

                  1. Your mind-reading abilities are astounding. What’s Jordan thinking about right now?

              2. Max, that’s one of the funniest things about libertarianism to me. Their logic, upon which EVERYTHING they believe is based, is the non-initiation of force. Yet they argue that the government should provide military, courts, etc, which clearly require funding, which requires….duh duh duh…force to collect the revenues.

                Libertarianism leads to either anarchy or contradiction. Either way is insanity.

                1. Yeah, because holding contradictory ideas is a sign of weakness… like thinking we could make cars both more quickly and for less money today than we did 20 years ago…

                  Seriously man, you’re grasp on logic is severely lacking as has been pointed out to you on a number of occasions… yet you still seem oddly confident of your supremacy… each to their own I suppose, but delusion usually leads to insanity.

                  But to your contradiction – there is no contradiction is stating that no one should use force against another, except to prevent someone else from using force against themselves or others – & then conclude that a government, by representation of the people, could be used to provide the means in which to prevent or punish those who use coercion against others or those countries which might transgress against our interests.

                  What you’re basically saying is that since libertarians are against the use of coercion, they must be against all government.

                  & You are wrong… as usual.

  22. underpricing to gain market share did not make sense

    No kidding?

  23. laissez faire economics, trickle down and deregulation have been the law of the land for 3 decades

    Of course they have; and cannibalism, too.

    1. Poor response. Trickle down is the de facto economic policy of the US and has been. Your curt and pointless response indicates you understand this but due to your devotion to this religion, cannot admit it.

      1. Great response. Cannibalism is just as present as “laissez faire” in terms of gov’t policy – there is none. None. “Deregulation”? Precious little, and only in specific cases – overall, much more regulation of more things from local, state and fed govt’s now than 30 years ago.

        Now, the black market, on the other hand…not so much cannibalism that I’m aware, but a thriving market. Of course, not totally laissez faire, what with the impact on costs of evading the federales and so on, but much closer than the one overseen by them to “laissez faire”.

        1. Poor response. That Commodities and Futures Modernization Act of 2000, and act of deregulation worked out real fucking well didn’t it?

          1. Max, it is their standard response to pointing out any flaw in the market.

            Libertarian Prime Maxim: If it looks like the market completely FUBAR’d something, blame the nearest government program.

            1. Max, it is their standard response to pointing out any flaw in the market.

              Chad, do you think that the market is supposed to guarantee profits?

            2. Yeah, because ignoring government regulation when talking about the market is just soooooo valuable.

              You’re funny

  24. Competition between hospitals is not a solution. We have dozens of hospitals within 40 miles of where I live. The problem is that they start buying expensive diagnostic equipment to differentiate themselves from the hospital down the road. Once they buy the equipment, they have to use it. The hospital down the road will buy it too, so they can compete once again. Pretty soon, all the hospitals have a $10 million machine that they have to use to make it worth what they paid and everyone is getting $10,000 diagnostic tests.

    Hospitals don’t want to compete to see who can be the CHEAPEST. They want to compete to see who can be the BEST. Better hospitals get more donations.

    1. You’re right – hospitals don’t wish to compete. Just like oil companies, the NFL, and grocery stores.

      It’s what adults make them do because they know not just the positive effects of competition, but also the dangerous effects of no competition.

      Seriously – are you honestly arguing that competition is not needed in order to make things better?

      Because almost every product you buy today proves otherwise (health care being an exception due to regulations).

  25. It’s been a long time that I am looking for the post the same as what you have right now. I want this because it gives all the information that i need to know and it is complete. Can you recommend any source about it?

  26. Don’t gore my ox! Don’t gore my ox!
    So much BS about Obamacare. Truth is, the feds will manage healthcare as well as they manage the post office and the budget. Add to that the neo-Nazi fascist attitude of Pelosi and Obama, and we have a lot more to worry about than Obama’s dictatorial power over our health care coverage. He’s turning democracy into “dictatorship by 51%”.

  27. Rather than control health insurance costs and overall spending, … As commentator Larry Elder would say, the ObamaCare fit is already
    http://destinationsoftwareinc.com

Please to post comments

Comments are closed.