Health care trade-offs – big increases in premiums, costs, for 2011

Really simple actually. If the federal government mandates additional coverage – like coverage for 26 year old “kids” and no lifetime or yearly limits – the cost to provide that coverage will go up. We know that is exactly what Democrats in Congress want. Ask your employer. Ask small business owners. Health care costs are going up … way up.

The left’s answer is always the same … they are going to demand that everyone jump into the water and chip in by paying premiums to the insurance companies. This magical solution will somehow stabilize – if not actually lower – the cost of health care while ensuring everyone has coverage and can feel good about themselves.

Well, I guess the president should have stated – just like Cap and Tax – the additional regulation in health care will cause costs to “necessarily skyrocket.”

I’ve spoken in detail to two small business owners about health care insurance premiums during the last 30 days or so. During the proposal process for the next year, both were told the cost to keep their current level of coverage, plus the soon mandated federal requirements, would result 15 to 20 percent increases in premiums. (Don’t even bother arguing most of that goes to insurance company profits.)

For larger employers, the Wall Street Journal has some additional information.

For the first time, those with employer-sponsored health insurance through large companies will be able to keep their adult children on their plans until age 26 regardless of their kids’ educational status, and workers generally won’t have to worry about lifetime or annual limits on coverage when enrollment opens for 2011 benefits.

Totally awesome! But…

But they may face higher out-of-pocket costs as medical inflation continues its unrelenting climb and as the healthcare-overhaul law’s provisions start to take effect.

“May” face higher out-of-pocket costs? Hah! Only if those large businesses are willing to cut elsewhere (i.e. hiring) or increase prices for products and services. My emphasis in bold.

Large employers are budgeting for an average 9% jump in health-care costs next year compared with an average 7% increase this year, the NBGH survey found. The figures reflect costs after employers have made plan-design changes.

Changes related to the health-overhaul law account for about 1% of next year’s additional cost increase, while higher prices from health-care providers account for the other 1%, Darling said.

Read that second paragraph again. I’m not sure how they figured the 1 percent figure, but remember the mandates are just starting with additional changes through something like 2014. Fifty percent of the increases are tied to federal mandates, while the other 50 percent are due to increases paid to health care providers and hospitals. Has the legislation slowed the rate of increases from health care providers? Guess not, and on top of that the mandates increased costs another 1 percent for large businesses.

As a reminder … necessarily skyrocket.

Why do this? Well, just ask Rep. Barney Frank (D-Mass.). This is part of the master plan, which of course will result in liberal leaders claiming they need to remove the “middle man” to fix the problem because small businesses – the engine of the United States economy – are getting totally squeezed and put out of business due to high health care insurance premiums.

Yeah! Get rid of the evil insurance companies making a profit. Just like, oh, let me think for a nano-second, the student loan industrial complex who have been screwing students by providing 10 year education loans at less than 2 percent interest rate. (Real number, that is what we are paying on my wife’s student loans.)

No doubt about it … single payer is the end-game.

24 replies
  1. winnie888
    winnie888 says:

    And the scary thing?  Now that insurance premiums are going waaaaaay up, even if obamacare is repealed, those costs will never go down…never, ever, ever.

  2. Odonna
    Odonna says:

    They would if we had health insurance competition across state lines.  We would if we got rid of mandatory coverages and had flexibility and consumer-driven health care again.  They would if we actually had a free market… and got rid of government-created inflation.

  3. Dimsdale
    Dimsdale says:

    Welcome to Massachusetts!  Our Øbamacare mini me program is careening out of control and costs are skyrocketing.  Even the NYTimes agrees: http://www.nytimes.com/2009/03/16/health/policy/1
     

    Here is the money sentence from the above article: "But government and industry officials agree that the plan will not be sustainable over the next 5 to 10 years if they do not take significant steps to arrest the growth of health spending."  "Death panels" anyone?  You can only arrest the growth of health care spending by spending less.  Do the math.

     

    Another: "Alan Sager, a professor of health policy at <a title="More articles about Boston University" href="http://topics.nytimes.com/top/reference/timestopics/organizations/b/boston_university/index.html?inline=nyt-org&quot; rel="nofollow">Boston University, has calculated that health spending per person in Massachusetts increased faster than the national average in seven of the last eight years. Furthermore, he said, the gap has grown exponentially, with Massachusetts now spending about a third more per person, up from 23 percent in 1980."

     

    Coming to a state near you.  As Jim sagely says, "coverage does not equal care".

  4. sammy22
    sammy22 says:

    It goes w/o saying that w/o Obamacare, the health insurance premiums would be going down. Have the Obamacare "mandates" taken effect yet? Maybe this is a preemptive strike by the sainted insurance companies.

    • Steve McGough
      Steve McGough says:

      Sweet goodness. The coverage for 26 year old kids is mandated for plans who cover dependents as of Sept. 23, 2010. Other mandates come into play within the next six to eight months. Hence when businesses are discussing with brokers and insurance companies this summer about pricing … they find out ….

      Are those evil insurance companies racist too?

      • AMD-Torr
        AMD-Torr says:

        Great point Steve.  My husband's company has already sent out the warning signal this year that EVERYTHING is going up in cost.

        However, this also makes me wonder one thing.  At what point will we as parents be mandated to cover our adult children's insurance?

        I am a stay at home mom now for 10 years and love my children dearly, but as our insurance costs rise, I am beginning to wonder if we are about to see families torn apart due to law suits brought on from children whose parents can no longer afford to have a 21-26 year old on their health care plan.

        Guess I should go put my tinfoil hat back on now.

    • Dimsdale
      Dimsdale says:

      Øbamacare was sold as the only solution to a growing problem.  Or so say the sainted politicians, who have nothing but our best welfare in mind (pun intended) .  Masscare is just giving you a preview of things to come.

    • Dimsdale
      Dimsdale says:

      Preemptive strike or honest outlook on a grim reality.  You can't increase the cost of doing business without increasing the price of your product.  Unless you like bankruptcy.  Which is something the sainted politicians may want, to realize their dream of single payer health coverage.  Win win for the pols.

  5. weregettinghosed
    weregettinghosed says:

    While the costs of heath care may not go down immediately once we have repealed the bill, if the insurance companies are given some competition by allowing consumers to go across state lines in order to get health insurance, you will see a sudden dip in prices. Capitalism always weeds out over priced companies. The government has not allowed for competition in the health insurance industry mainly due to successful lobbyists. I say the biggest lobbyists – We the People need to be recognized that we are to be reckoned with.

    All examples of controlled health care shows us no matter how little government control there is, so long as the government is in control, it will not, does not work!

    Uncle Sam get your nose out of my …… and quit using the Constitution as toilet paper ……. Next time you are sitting there on the thrown, READ The Constitution …. do not, I repeat do not flush it!!

     

  6. sammy22
    sammy22 says:

    I would have bet, before Obamacare, that the health care premiums would have gone up anyway. They sure have not gone down in my memory. But what are you complaining about? That the insurance companies are raising premiums or that the employers are passing the increases to the employees? As to the children being covered up to age 26, would you rather have the children/adults by now, be covered by insurance or be subsidized by all the other payers?

    • AMD-Torr
      AMD-Torr says:

      Sammy, I have no problem with employers passing cost on to me.

      It would never occur to tell my children that they have a choice between being covered by an insurance company or subsidized by taxpayers.  it used to be in this country that you taught kids to work hard and pay for themselves.  But then again, that's if they are lucky enough to have a job.  That is FAR more important to me.

      Funny how this is even a discussion now.  I guess I was born in the wrong times.

    • Dimsdale
      Dimsdale says:

      Absolutely.  But the promise of Øbamacare was that it would reduce or stop the increase.  No such luck.  Without significant tort reform among other things, costs will continue to spiral upward.  Adding more people and mandating more coverage will have their effects as well.

       

      You left a vital factor out of the question about "the insurance companies are raising premiums or that the employers are passing the increases to the employees": the effect of mandates, cost cutting and other government manipulation.  That is what I am complaining about.  Return control of health care purchases to the consumer and out of the hands of the gov't and business, and costs will come down.  People are much more particular when it is their money (or they actually get to hold it).  Nobody ever washed a rented car.

       

      Coverage by insurance is a subsidy by all payers.  They should buy their own, or the parents can buy it directly if they choose.

      • Dimsdale
        Dimsdale says:

        Well, I will leave the blog in yours and other's hands when I have to concentrate on teaching again!

         

        Snatch the pebble from my hand, grasshopper!  😉

  7. JollyRoger
    JollyRoger says:

    Ironic Barry wants to eliminate the greedy middleman profiteers in college loans and health insurance because I believe the greedy middleman profiteer in "Big Oil" & "Big Tobacco" is "Big Government"!  At what point has government made enough money!?  And imagine the way the Democrats will try to frighten the hell out of voters if they gain a monopoly on the only source of our healthcare!  We might as well grease our arses and grab our ankles!

  8. sammy22
    sammy22 says:

    Same old story Dims. Let the people buy their own insurance: then explain why there are millions w/o health insurance and why the 22year old who can afford to buy it doesn't, and I subsidize him when he breaks a leg skiing.

    • Dimsdale
      Dimsdale says:

      Why subsidize someone that stupid?  That is the problem we have now, but that the gov't thinks it has to accommodate.  I say rubbish!  Garnish his/her wages, fine them, whatever.  Make it personal and they will smarten up.  Let the gov't take care of the minority that truly can't afford/get health care.  The point I am trying to make is that when people don't see the costs, i.e. think it is a freebie, they don't care what it costs (I also think everyone, not just businesses, should write a quarterly check to the gov't instead of automatic withdrawals.  Watch the fun then!).  They should see that vid of Wayne Rogers explaining how it takes $70K or so to pay an employee making a salary in the $30K's.

    • Bellringer
      Bellringer says:

      "why the 22year old who can afford to buy it doesn’t"–Excellent question–Why! Up until the passage of the monstrous 'health care reform' bill, individual citizens HAD that freedom.  Inch by inch, incrementally BOTH parties have chipped away at liberty with mind-boggling thousand page legislation, after legislation locally, at a state level, at a federal level, it never ends!!

      Insurance is defined as the transfer of risk, based on the laws of large numbers.  This legislation has thrown a monkey-wrench into the acturarial tables, with government attempting to re-write the laws of large numbers–but the truth has a funny way of 'unexpected consequences'-at least the 'experts' seemed regularly 'surprised' by actual results that prove their social engineering schemes failures, time and time again.

      • Dimsdale
        Dimsdale says:

        And this prediction of risk is designed to assign higher costs to those that have hazardous habits or hobbies etc.  The fact that the government is nullifying hundreds of years of insurance expertise in this area will surely drive costs up.

         

        I agree: you can have the freedom not to buy insurance.  You do not have the freedom not to pay for your health care.  Not buying insurance is betting against yourself.

      • Dimsdale
        Dimsdale says:

        And this prediction of risk is designed to assign higher costs to those that have hazardous habits or hobbies etc.  The fact that the government is nullifying hundreds of years of insurance expertise in this area will surely drive costs up.

         

        I agree: you can have the freedom not to buy insurance.  You do not have the freedom not to pay for your health care.  Not buying insurance is betting against yourself.

  9. steve418r
    steve418r says:

    I have been in business for over 30 years. There have been many times I have had to go without paying myself in order make the payroll for the workers and pay the bills. Many times the only benefit I had was the health insurance. I have worked my fingers to the bone to become successful and it is disappointing to know the administration wants to take more from me just to turn it over to tax takers. I have had to sacrifice and do without to have the things the government hands out like candy at a parade. Now that I have made some progress through hard work, I get demonized so the Democrats can gain a few more votes

  10. BEA
    BEA says:

    It's shameful really…

    My parents and all their friends left home @18 and moved from ME to CT. They got married, got jobs, and had children…very independent and self sufficient for such a young age.

    Can't say that about society today…

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