Study says companies expect health reform to raise costs

[Turin39789]

Not according to this study or common sense. Premiums are going to increase as a direct result of this law.

Exactly according to common sense. They are extending coverage to those sick who have been unable to get into the pool, but also to the larger group of people who chose to stay outside the group. The sick add x million to the money insurance pays out(the numerator), but the healthy add a greater number to the pool of people paying(the demoninator).

And for the 42nd time, the "study" you keep referring to is just a poll/survey of business/Hr people. They didn't study actuarial tables or statistics, it is a collection of opinions.

 

[nick1985]

And cost per person can go down because the number of people insured is higher and the risk is more evenly spread.

I think even Obama said premiums will go up ~15%

 

[her209]

Many are absolutely considering dropping retiree insurance benefits because of the increased costs of this law.

The government said it isn't going to foot part of the prescription drug bill (28&#37 for seniors, of which the company got to deduct 100% (even the government's part). If the companies want to be able to fully deduct what they were deducting in the past, then they should pay 100% of the bill.

 

[Fern]

And cost per person can go down because the number of people insured is higher and the risk is more evenly spread.

You seem to have two major points in your opposition to this 'study':

1. Costs, with or without HCR, were going to rise. Of course, everyone knows this. This was THE BIG selling point for HCR. HCR was promised, by Obama, to "bend the cost curve". The promise was to bend the cost curve down, however it's looking more-and-more like HCR will bend the cost curve upwards.

So it will have failed in one of it's two main objectives (controlling costs). In effect they've managed to expand coverage of even more expensive HI.

2. The new additions to the 'pool' will spread costs, and thereby, lower costs at the individual level. Much of this is predicated on requiring younger healthier people to purchase HI. Their 'overpaying' for HI will help subsidize the increased costs for those with pre-existing conditions and the elimination of caps on coverage (for all others).

However, at this point in time #2 above is purely hypothetical. It also suffers from a factual perspective. We should all recall that to pass HCR Congress front-loaded the benefits and back-loaded the penalties and mandates for acquiring coverage.

So, that magical pool of additional people cannot be expected to help offset any costs for the forseeable future. There is simply no requirement that people come into that pool right now.

Furthermore, any expectation of substantial amounts of those younger/healthier flocking to join in this "pool" down the road is specualtive at best. The penalties for failing to obtain coverage (and join this pool) are very weak and based on taxable income. Most of these young/healthy people can be expected to have lower than average incomes (as is traditionally the case, notwithstanding this economy) likely rendering the penalty ineffective as motivation for them to purchase the now even more expensive HI coverage.

Counting on this 'pool" now to subsidize HC costs is an excercise in "counting your chickens before they hatch".

I believe that companies with thousands of employees devote substantial resources, and have talented qualified people, towards salary and employee benefit costs. Those are simply too substanial not to focus on. If they think HCR will, by itself, increase HC costs I believe it likely they are correct.

Now, much has been said about the dire financial condition of our federal, state and local governments. Considering they offer some of the best HI plans around, what will be the effects of substantial HI cost increases on their already poor financial condition?

Fern

 

[Turin39789]

You seem to have two major points in your opposition to this 'study':

That was a very thoughtful post, and I don't have time to respond right now. I might get to it tonight. If I don't get a chance to get verbose, I'd just say you make some good points, and my basic responses are 1) I think it is really to early for anyone to say anything on that with certainty. My fear is we won't know how well it worked or didn't until after it has been in effect for a bit, but that is how it goes with anything sufficiently large when you want to collect accurate and relevant statistics; and 2) Yes it was front/back loaded to make it easier to swallow and that won't help in the first few years, but it is much more important to look at the actual long term program. I wouldn't limit the "foreseeable future" to less than 10 years and I believe the mandate goes into effect in 2.5 years. I disagree that in the mid/long term the larger pool won't have a substantial effect.


My real opposition to this study is that it isn't a study, and it isn't news. Someone polled the people in HR/Business who deal with insurance and asked them what they thought about costs in the future. Saying that they expect this to raise cost in the short term is akin to another "the sky is blue" piece. Spidey saw it and ran with it, as an opportunity to oversimplify and made a wonderful argument that the system is doomed to failure because of survey results. That's really the only reason I've been in this thread so much 1) It is a fluff piece and 2) Spidey posted it.