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Everyone Has A Hidden Agenda

Posted Jan 16 2013 11:17am
 Stanley Feld M.D.,FACP,MACE

 

In my last two blogs I covered several points . I also asked readers to consider  the unanswered questions.

" Why would a business (the healthcare insurance industry) facing loss of its customers because of high premiums increase premiums even further?"

"Why, if the traditional media has published articles stating that the cost of healthcare has been decreasing would a premium increase be justified?"

"Why do consumers’ deductibles continue to increase each year?"

"How can Medicare be losing money?"

"Where is the extra money going?"

It seems obvious to me that the Obama administration wants to put healthcare insurance companies out of the business of selling private insurance.

In January 2014 Health Insurance Exchanges will be the only vehicle through which healthcare insurance can be sold.

At present less than half the states have signed up to develop State Health Insurance Exchanges.

States are not signing up because the exchanges will put a tremendous financial burden on individual states after the second year.  In the end states will have little say in developing operating rules for the exchanges.

States will also be losing their independence and freedom.

President Obama’s administration has said the federal government will run the Health Insurance Exchanges if states refuse for form their own exchanges.

It looks as if the healthcare insurance industry is in check-mate. The industry’s response was to not only pass the 3.5% tax “user fee” for every policy sold but to raise premiums by double digits.

"My question is why would an industry having problems holding on to its customers because present premiums are unaffordable raise premiums?"

I believe the healthcare industry has lost interest is selling private healthcare insurance.

At present the healthcare insurance industry sell its administrative services to the government to run Medicare, Medicaid, Tricare and Government workers Medicare.

The healthcare insurance industry will continue selling its administrative service to the government for the new government run Health Insurance Exchanges. Ultimately these exchanges will be selling National Healthcare Insurance  (“The Public Option”).

The healthcare insurance industry is raising premiums now to set a new standard for the fees it will charge the federal government in the future.

These fees are not transparent.

P resident Obama’s administration claims the government’s overhead for  Medicare is 2.5% . That statement is true. It will go up to 5% with all the new Obamacare bureaucracies.

However, the 2.5% only covers the cost for the bureaucrats that out source administrative service to the healthcare insurance industry. The processing and    adjudication of claims are the administrative services done by the healthcare insurance industry.

The fees for those services are anywhere between 30 and 50% of every healthcare dollar spent.

Some of the healthcare insurance industry’s true “overhead” and expenses are  counted as a direct medical care expense.

The law mandates that 80% of healthcare dollars are spent on direct patient care and 20% can be for healthcare insurance expenses.

The problem is direct medical care expenses include creating provider networks, administering those networks, negotiating a very complex web of allowable fees and reserving unpaid claims.

The healthcare industry’s recent response to the new “user fee” has been,

Health plans share the goal of affordable health care coverage for all Americans. Arbitrarily capping premiums without addressing underlying cost drivers will not move the country closer to that goal.”

The healthcare insurance industry claims they are for affordable care for all Americans.

Data show that premiums are increasing because of the unsustainable rise in medical costs, new benefit mandates that make coverage more expensive, and the effect of younger and healthier people forgoing insurance because of a slow economy.

My question is where is the data? The administration has told us that the costs of medical care is .4% as opposed to a 2.7% rise in the GNP. The implied claim is Obamacare is bending the cost curve

“Moreover, the health care reform law imposed new rate review requirements and a federal cap on health plan administrative costs and profits, further suggesting that rising premiums are being driven by increased spending on medical care”.

America’s Health Insurance Plans association response is lame and unbelievable. The traditional media has taken the response at face value.

“Focusing on affordability is critical as the reform law is fully carried out in 2014. That is why policy makers should address provisions that will further increase premiums, like the health insurance tax, and take steps to ensure broad participation in the system.

KAREN IGNAGNI
President and Chief Executive
America’s Health Insurance Plans
Washington, Jan. 7, 2013”

 

Karen Ignagni has a very difficult job. She is at times effective. Her current response is a nice gentle way of saying the government is to blame for the rising premiums.

 

As I see it both the government and the healthcare insurance industry are not telling the exact truth. The hope is to let the rise in premiums slip by the public notice.  

All President Obama has to do is raise taxes once more to cover the increases he did not anticipate in his takeover of the healthcare system.

The healthcare insurance industry will continue to walk away with unconscionable profits.

The victims will be consumers who feel powerless already.

The dirty little secret is consumers are not powerless. Consumers simply have to wake up.

Then loud and effective consumer protests must be organized. These organize orderly protests will get the President's and the congresses' attention.

If nothing is said the President and the Democratic congress believe consumers are happy with all the tax increases, premium increases, the deterioration in health care coverage and failures to form new bureaucracies.

It will only get worse for everyone as consumers remain silent.

The opinions expressed in the blog “Repairing The Healthcare System” are, mine and mine alone.



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