Healthcare mandates: higher cost, less choice

From: The Daily Campus, The Independent News Source of the University of Connecticut

By Thomas Dilling
Staff Columnist

This past Saturday, as Stewart and Colbert rallied for “sanity and/or fear” in D.C., President Obama traveled to Connecticut for the third time this campaign season in an effort to rally Democrat party loyalists, who waited in line before dawn to secure their glimpse of him. Surprisingly not on the agenda was any mention that it was the seven-month mark of the President signing his health care agenda, sometimes known as “Obamacare,” into law.

With the State Insurance Commisioner currently citing “Obamacare” as the cause of up to 47 percent rate hikes in Connecticut health insurance plans, this omission was more likely meant to avoid drawing attention to the health care overhaul that one in four Democrats nationwide are running with the position of repealing.

How exactly did “Obamacare” raise these rates? A litany of new mandates on insurers was to be enacted on Sept. 23. Among these were restrictions on plans with spending caps (with the goal of prohibiting spending caps altogether), prohibitions on insurer’s rights to drop policyholders, the prohibition of pre-existing condition exclusions for children under 19, and the requirement that insurers allow children to remain on their parents’ insurance until they’re 26.

While most people may think highly of these mandates as beneficial to consumers, they often don’t realize the cost of enacting these mandates. This cost will ultimately be paid by consumers through increased premiums. Furthermore, these requirements create a decline in consumer choice when purchasing insurance.

The ratehikes were on plans that included spending caps. Plans with spending caps exist for people who cannot afford, do not want, or otherwise do not see a cost-benefit in greater coverage. They require the availability of low-cost insurance plans. When Obama mandates the elimination of plans with spending caps, the necessary outcome is that people with these plans will pay skyrocketing premium increases, making healthcare less affordable, not more affordable, as promised by “Obamacare’s” official title, “The Affordable Care Act.”

In a letter to U.S. Dept. of Health and Human Services, Thomas Sullivan, Connecticut’s state insurance commissioner, defended the increases as necessary to maintain solvency. He included one example of a plan where prescription drug benefits were capped at $500 per year. Obama’s mandates require that cap be raised to $750,000. This alone resulted in a 23 percent premium increase on policyholders of the plan, even if they do not want or do not need greater drug benefits.

Anthem Blue Cross and Blue Shield, the state’s largest insurer, is taking heat for the rate hikes. The state insurance commissioner is taking a bit of heat as well for approving the hikes, but the blame must be placed on the cause: the federal government. Anthem is being mandated with higher costs, while hospitals, such as Hartford Hospital, are demanding higher payouts. The ultimate result is a higher cost burden on consumers.

Furthermore, this comes just weeks after insurers, not only in Connecticut, but nationwide, were forced to end child-only plans because of the “Obamacare” mandate on pre-existing conditions for children. Ending child-only plans was a necessary consequence, since there is no legal requirement for children to have an insurance policy, but there is a legal requirement for insurers to provide coverage. Thus, if child-only plans were to exist, children would be able to stay uninsured, avoiding premiums, up until the point when care is needed, effectively undermining the premise of insurance.

Other downfalls of Obama’s health care plan have been expressed in the last couple months, including an unprecedented “Alternative Report” by Medicare’s chief actuary, calling the expected 30 percent decreases in doctor payouts an “unreasonable” and “implausible” attempt to bend the cost curve. Just last week, the chief actuary also wrote that Medicare Advantage patients should expect to see out-of-pocket costs increase $346 per year in 2011, peaking at $923 in 2017. Furthermore, by the year’s end, those using Health Savings Accounts will be unable to use their medical savings to buy over-the-counter medications due to “Obamacare.”‘

Still, as we head into elections tomorrow, many politicians are calling “Obamacare “a step in the right direction. But if this is the direction it is heading, antithetical to the promise of more affordable care, I strongly contend that we are on the wrong path.

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