nos-trum. pronunciation: \nos'-trum\. noun. Etymology: Latin, neuter of noster our, ours.
1. a medicine of secret composition recommended by its preparer but usually without scientific proof of its effectiveness.
2. a usually questionable remedy or scheme.
See here for more discussion.

Tuesday, June 15, 2010

You Like Your Health Plan: Govt Says 34-80% Can't Keep It

Health and Human Services regulations for HCR were issued.  The figure quoted above for those plans that will lose their exemption by 2013 is from the HHS regulation itself.

“Change is coming for a lot of people, whether they want it or not,” said Sen. Chuck Grassley (R-Iowa), ranking member of the Senate Finance Committee.
I'm having deja vu--I've been warning of this for over a year.  According to Politico (June 15), insurers will be
"stripped of their “grandfathered” status and be subject to implementing a series of requirements listed in the reform law. Insurers or employers would lose grandfathered status if they eliminate benefits for a particular condition or disease, increase co-insurance rates — such as a typical fee of 20 percent of a hospital bill, increase deductibles or co-payments by a significant amount or significantly decrease employer contributions to a plan, among other restrictions."

[the "series of requirelments" in the law are required coverages that HHS decides you need to have.  Gender change operations?  Botox?  these are already benefits in some states who have a "series of requirements."]

Imagine yourself a business owner (analogous to an insurer).  The government tells you that you can't change the product you sell, or how much you sell it for, forever--or you can't be in business.  Say your product needs to change to work better, or be more competitive, or you're not making enough money to cover costs.  Well, you're SOL.

Despite allegations of greedy insurers, the net profit margin in the Health Insurance Plans industry is about 4%.  You can look it up in the Yahoo Financials.  By contrast, profit margins in the alcoholic beverage and cigarette industries are in the double digits.

I once heard the Senate Majority Leader say that health insurance profits have risen by 400% since 2000.  A good example of misleading numbers:  you all are smart enough to figure out that under his way of presenting it (a percent), an insurer could have made $1 in 2000, which increased to 4$.  Beware of this kind of misuse of data.

So, I'm not interested in demonizing the industry.  Those who do it are bearing false witness.  Yes, there are some overpaid executives, but take all that away and you get chump change, or budget dust.  It won't help costs.
"So what! Democrats retort. If plans do lose their grandfather status, the changes involved will help people, not hurt them, by giving them new consumer protections," as reported by CQ HealthBeat.
Well, maybe more protections and benefits (I'm fine with protecting myself), but at much higher cost.  There are two articles today on the Massachusetts universal care program that reinforce what I've been posting for the last two years:  HCR doesn't slow down spiraling health care costs, and probably will make them worse.  The lesson from MA, according to CNN Money (JUne 15) is
"The battle in Massachusetts may foreshadow the results of the new federal law. It threatens to mirror precisely the cycle we're witnessing in the Bay State: Spiraling costs that make coverage unaffordable for both patients and businesses, followed by price controls that drive private providers from the market "
And lastly, a report from PricewaterhouseCoopers says that medical inflation will increase by 9 percent next year (NPR, June 15).

In the face of a 9% increase how likely is it that the plan you like will be able to stay afloat if it can't make any changes?
Doc D

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