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Tuesday, October 25, 2016

Ouch, health care insurers are increasing premiums on
ObamaCare exchanges by double digits. I guess that would mean the smaller single digit increases weren’t as bad as Republicans said they were.

As I been saying here for years, insurers would eventually
find a way to game the marketplaces and poison reform. Paul Ryan knew this when he said ObamaCare would collapse.

In the bad old days before the ACA, premiums increase every year between 20 and 50%. Oh, surprised? A short recap:

In August 2008, about six months before debate began in
Washington on what would become the Affordable Care Act, 82 percent of
Americans were so dissatisfied with the U.S. health care system they wanted it
overhauled.The main reason so many of us were uninsured in 2010 was
that health insurance had simply become a budget-buster for many American
families. The cost of employer-sponsored family coverage reached $13,375 in
2009, an increase of 131 percent in ten years, according to the Kaiser Family
Foundation.

And almost 18 percent of our GDP is consumed by health care
expenses, compared to 11.7 percent in France and 11.3 percent in Germany.

Under Bush, the average family premiums (including both what
employers and employees pay) went up $4,677 in his last six years in office,
from 2002 to 2008, an increase of 58 percent. Bush’s first six years that
increase was 72 percent.

Note: think what would happen in a GOP free market system replaced the ACA, with no plan requirements and no marketplace to compare prices. Do you think prices
would increase dramatically even with supposed “affordable,” “buy what you can afford” junk
policies? God would they.

Insurance companies want more Money....and are in a full court press to pressure
the government to give them more money to boost profits. It worked before, with
Medicare Advantage, why not ObamaCare. Briefly, let’s go back 16 years, with former insurance exec. Wendell Potter:

HISTORY (OF HEALTH CARRIER GREED) REPEATS ITSELF-Profit-Minded

Health Insurers Will Likely Return to Obamacare Fold in 2017: 16 years and five
months ago, after the close of trading at the New York Stock Exchange, my staff
and I at Cigna disseminated a press release we knew would lead to a lot of
angst in Washington, on Wall Street and around the country. Cigna to Curb
Medicare-HMO Risk; This was the headline in the company’s hometown newspaper, the Philadelphia
Inquirer: Cigna to Exit 13 Medicare Markets … 104,000 of Cigna’s senior-citizen
subscribers were being dumped because the company wasn’t happy with how much
the government was paying it to provide access to medical care for those folks.

Insurers had been unhappy with their pay from Uncle Sam
since the passage of the Balanced Budget Act of 1997, when Republicans were in
charge of both the House and Senate. The GOP wanted to rein in spending on
“entitlement” programs ... It reduced Medicare spending by more than $100 billion
between 1998 and 2002 … capped annual reimbursement increases 2 percent on average...(but) medical inflation was averaging 8 percent annually. The
companies clearly were not managing medical costs nearly as much as they had
told lawmakers and their customers they would be able to do. So Cigna, at
least, had decided to cut bait.Fast forward to August 15, 2016 and the era of Obamacare.
That was the day Bloomberg ran this angst-producing headline: Aetna to Quit Most Obamacare Markets, Joining
Major Insurers. Why? Because, once again, the big insurers were not only not
making the profit margins they felt they should be making, they were losing
money on this particular book of business. So, just like they did a decade and a half ago, they decided to cut those
enrollees loose.And they were spectacularly successful back in the early
2000s. In short order, there was a reversal in fortune — in the insurers’
favor. So if the past is prologue, we can expect the insurance industry’s
lobbyists to be hard at work to make sure history repeats itself. Keep in mind
that the insurers’ Medicare + Choice losses were an unintended consequence of
the Balanced Budget Act of 1997. Republicans in particular were alarmed when
the insurers began abandoning the Medicare HMO market because it has long been
a tenet of faith among many of them that private insurers could operate more
efficiently than the traditional Medicare (TM) program, and consequently reduce
overall spending on Medicare.

As you can see, this isn't an easy industry scam to explain. Here's more....

Congress Showed Health Carriers the Money: So halfway into the George W. Bush administration, with Republicans still in charge of both the House and Senate, the Medicare Prescription Drug, Improvement and Modernization Act of 2003 became law. The insurance industry’s lobbyists scored two big victories ... the prescription drug benefit (known as Part D) made it necessary for Medicare beneficiaries to buy their drug coverage through private insurers. And second, the Medicare + Choice program was overhauled to the industry’s liking (and renamed Medicare Advantage).The government began paying private insurers more to cover the cost of sicker Medicare enrollees, so the companies that had bailed came rushing back in. There were also other provisions of the 2003 law that boosted the government’s pay to insurers. As a consequence, by the time Obamacare became law in 2010, the government was actually paying Medicare Advantage plans 14 percent more per beneficiary ($1,100 on average) than it would cost to cover those beneficiaries in traditional Medicare. Between 2004 and 2008, the overpayments totaled almost $44 billion.One of the aims of Obamacare was to reduce those overpayments, and they have been reduced, but most insurers are still finding their Medicare Advantage business to be very profitable. You certainly don’t hear about insurers threatening to jump ship now.You can also expect the insurers to lobby for more “flexibility” in designing their policies. They’d love to be able to go back to the days when they could sell junk insurance — policies with such meager benefits they rarely had to pay out much in claims.

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