Remember this? “Premiums will fall by as much as 3000%” Keep dreaming

This was WAY back in 2010

[youtube]http://www.youtube.com/watch?v=lUd-slJc-GY[/youtube]

“…your employer, it’s estimated, would see premiums fall by as much as 3000% which means they could give you a raise.”

Steve Gilbert had some fun with this:

Let’s say an employer pays $4,000 in health care premiums for an employee.

If his premium goes down 100% he will save $4,000 dollars. If it goes down 3,000% that is a savings of $4,000 x 30 which = $120,000.

Which means that an employer will make a $120,000 profit on each employee’s healthcare insurance once Obama-care is passed.

You can buy a lot of unicorns with $120,000.

But now reality smacks into Obamacare

Ooops.

Health insurance companies across the country are seeking and winning double-digit increases in premiums for some customers, even though one of the biggest objectives of the Obama administration’s health care law was to stem the rapid rise in insurance costs for consumers.

Particularly vulnerable to the high rates are small businesses and people who do not have employer-provided insurance and must buy it on their own.

Small businesses. The backbone of the American economy.

In California, Aetna is proposing rate increases of as much as 22 percent, Anthem Blue Cross 26 percent and Blue Shield of California 20 percent for some of those policy holders, according to the insurers’ filings with the state for 2013. These rate requests are all the more striking after a 39 percent rise sought by Anthem Blue Cross in 2010 helped give impetus to the law, known as the Affordable Care Act, which was passed the same year and will not be fully in effect until 2014.

In other states, like Florida and Ohio, insurers have been able to raise rates by at least 20 percent for some policy holders. The rate increases can amount to several hundred dollars a month.

The proposed increases compare with about 4 percent for families with employer-based policies.

Providing free check-ups and mammograms doesn’t come cheap.

The double-digit requests in some states are being made despite evidence that overall health care costs appear to have slowed in recent years, increasing in the single digits annually as many people put off treatment because of the weak economy. PriceWaterhouseCoopers estimates that costs may increase just 7.5 percent next year, well below the rate increases being sought by some insurers. But the companies counter that medical costs for some policy holders are rising much faster than the average, suggesting they are in a sicker population. Federal regulators contend that premiums would be higher still without the law, which also sets limits on profits and administrative costs and provides for rebates if insurers exceed those limits.

About those rate increase:

Although rates paid by employers are more closely tracked than rates for individuals and small businesses, policy experts say the law has probably kept at least some rates lower than they otherwise would have been.

But that wasn’t what Obama promised.

Many insurance regulators say the high rates are caused by rising health care costs. In Iowa, for example, Wellmark Blue Cross Blue Shield, a nonprofit insurer, has requested a 12 to 13 percent increase for some customers. Susan E. Voss, the state’s insurance commissioner, said there might not be any reason for regulators to deny the increase as unjustified. Last year, after looking at actuarial reviews, Ms. Voss approved a 9 percent increase requested by the same insurer.

“There’s a four-letter word called math,” Ms. Voss said, referring to the underlying medical costs that help determine what an insurer should charge in premiums. Health costs are rising, especially in Iowa, she said, where hospital mergers allow the larger systems to use their size to negotiate higher prices. “It’s justified.”

Costs are increased because of increased usage.

While employers may be able to raise deductibles or co-payments as a way of reducing the cost of premiums, the insurer typically does not have that flexibility. And because insurers now take into account someone’s health, age and sex in deciding how much to charge, and whether to offer coverage at all, people with existing medical conditions are frequently unable to shop for better policies.

In many of these cases, the costs are increasing significantly, and the rates therefore cannot be determined to be unreasonable. “When you’re allowed medical underwriting and to close blocks of business, rate review will not affect this,” said Lynn Quincy, senior health policy analyst for Consumers Union.

The practice of medical underwriting — being able to consider the health of a prospective policy holder before deciding whether to offer coverage and what rate to charge — will no longer be permitted after 2014 under the health care law.

And that’s when the fun really begins.

Some lefties swore that Obama was going to help small businesses. Of course, this was from people with absolutely no familiarity with something called “business experience.” But Yglesias was right about one thing:

And make no mistake, the health care bill is, all things considered, the largest income-redistribution program enacted in decades.

A White House spokesman said that when he said a “3000%” fall in premiums Obama meant a $3000 drop in premiums. But that’s not going to happen either:

“There’s no question premiums are still going to keep going up,” said Larry Levitt of the Kaiser Family Foundation, a research clearinghouse on the health care system. “There are pieces of reform that will hopefully keep them from going up as fast. But it would be miraculous if premiums actually went down relative to where they are today.”

Then again, Obama was never very good at math.

DrJohn

DrJohn has been a health care professional for more than 30 years. In addition to clinical practice he has done extensive research and has published widely with over 70 original articles and abstracts in the peer-reviewed literature. DrJohn is well known in his field and has lectured on every continent except for Antarctica. He has been married to the same wonderful lady for over 30 years and has three kids- two sons, both of whom are attorneys and one daughter on her way into the field of education.

DrJohn was brought up with the concept that one can do well if one is prepared to work hard but nothing in life is guaranteed.

Except for liberals being foolish.