Tag Archives: private health insurance

Obama Cabinet Secretary: ‘The Private Market is in a Death Spiral’; ObamaCare Is Designed To End Private Insurers

Editor’s Note – It is unfortunate that I have to gloat about such bad news, but this very writer was among the first in the country to observe and write that ObamaCare creates what is called an “Adverse Selection Spiral” (also known as an economic death spiral); meaning that the short term incentives, regulations and tax structure in the ObamaCare is designed to make the long term risk management economically unsustainable due to the long term increases in costs forced into the system.

This very writer said that ObamaCare is designed to break private insurance and make people “cry out for a public option”. Ironically some months later former Democrats Speaker of the House Nancy Pelosi said the exact same thing.

Flashback 2009-2010: Real Clear Politics Confirms IUSB Vision Analysis: Latest Health Care Bill Designed to Wreck Private Insurance & Make People Cry Out for a Public Option:

As we at IUSB Vision have stated again and again and again…. Real Clear Politics….

Speaker Pelosi used IUSB Vision Editor Chuck Norton’s exact words that ObamaCare will “make them cry out for a public option” on C-Span [Notice how all of the Democrats cackle maniacally when she says it]:

Read on HERE.

So much for the Obama promise of keeping your old health insurance and that it will be cheaper.

CNS News:

Sec. HHS Kathleen Sebelius
Sec. HHS Kathleen Sebelius

Health and Human Services Secretary Kathleen Sebelius told the House Ways and Means Committee on Tuesday that the days of private health insurance are coming to an end in the United States.

“The private market is in a death spiral,” Sebelius said, contending this would be the case whether or not President Barack Obama’s health care law had been enacted.

At the Ways and Means hearing, Rep. Peter Roskam (R-Ill.) asked Sebelius about the administration’s assurances that people who liked their current health insurance plan would be able to keep it under the new law.

“How about when the president said you can keep your health care coverage, if you like it?” Roskam said. “And yet, the reality is, according to Bloomberg (News) at least, 9 percent fewer businesses are offering medical coverage than in 2010. There the rhetoric didn’t meet the reality, did it?”

Sebelius did not contest the numbers. 

[Here comes the spin – Political Arena Editor] “Well again, congressman, what you’re seeing, it wouldn’t have mattered if we had passed the Affordable Care Act or not,” she said. “The private market is in a death spiral.”

 

It would have happened anyways is the new spin. Nice try.

Investors Business Daily:

ObamaCare Is Designed To End Private Insurers

Health and Human Services Secretary Kathleen Sebelius says that private health insurance providers are in a “death spiral.” Of course they are. Isn’t that the way the authors of ObamaCare planned it?

Testifying last Wednesday in front of the House Ways and Means Committee, Sebelius was asked by Rep. Peter Roskam, R-Ill., if the administration was being honest when President Obama promised that those who liked their health plans could keep them.

Said Sebelius: “The private market is in a death spiral.”

Sebelius tried to temper her comment by claiming the private insurance market would collapse even if the Patient Protection and Affordable Care Act had not been passed. But the truth is, the market cannot survive under the growing weight of government, and Obama-Care was to be the final heavy load that will crush it.

Don’t believe it? Look at the provisions of ObamaCare and consider them in context with the Democrats’ constant public demonization of insurers.

Start with the mandates. By now, most of the country knows that ObamaCare requires health insurers to pay for contraception and other birth-control measures. But that’s not the law’s only mandate. Among the many diktats of the Democrats’ health care overhaul is the requirement that insurers must spend at least 80 cents on medical claims for every $1 they take in from premiums in the individual and small group markets, and 85 cents from premiums in the large group market.

Insurers’ first response was to cut broker commissions. But what gets trimmed next? At what point will the industry no longer be able to pay competent people in companies because of the medical-loss ratio mandate, or to make the profits needed to stay in business?

Maybe the industry could simply increase premiums to avoid problems created by the medical-loss ratio. But the central planners thought of that, too. Under ObamaCare, the secretary of Health and Human Services has the power to decline premium increases of 10% or more in the individual and small group markets. Only those considered “reasonable” by bureaucrats’ standards will be accepted. This policy is an effective price control that’s sure to cause losses in the industry.

Romney Supporter Florida AG Pam Bondi Says Mitt Wants Romneycare In Every State

In the process she tells whopping lies about RomneyCare in Massachusetts.

Pam Bondi says that RomneyCare cuts costs and expands choice, both claims are shown to be false with just minutes of research.

As far as cutting costs, RomneyCare was not designed to cut costs and they said so when creating it. Romney’s team made it clear that they aimed for “universal coverage” first, and decided to worry about controlling costs later – LINK.

Costs continue to rise faster in Massachusetts than in the rest of the country. So much so that when one examines the details of just how much RomneyCare costs not just the Massachusetts tax payer, but the American taxpayer you will not be pleased.

Be sure to read this entire post.

You paid the high cost of RomneyCare in Massachusetts… – LINK and here is an excerpt:  

The High Price of Massachusetts Health Care Reform

http://www.beaconhill.org/BHIStudies/HCR-2011/BHIMassHealthCareReform2011-0627.pdf

We find that, under health care reform:

• State health care expenditures have risen by $414 million over the period;

• Private health insurance costs have risen by $4.311 billion over the period;

• The federal government has spent an additional $2.418 billion on Medicaid for Massachusetts.

• Over this period, Medicare expenditures increased by $1.426 billion;

• For a total cumulative cost of $8.569 billion over the period; and

• The state has been able to shift the majority of the costs to the federal government.

 

As you read on and read the related links below you will understand why many insurance companies have fled the state thus reducing choice.

Related:

Romney: Requiring people to have health insurance is “conservative” – LINK.

The Truth About RomneyCare – LINK.

 

You paid the high cost of RomneyCare in Massachusetts….

This study from the Beacon Hill (Economics) Institute at Suffolk University illuminates the disastrous results of the failed experiment known as RomneyCare and yet presidential candidate Mitt Romney continues to stand by the program.

Here are the key findings from the Beacon Hill study:

The High Price of Massachusetts Health Care Reform

http://www.beaconhill.org/BHIStudies/HCR-2011/BHIMassHealthCareReform2011-0627.pdf

We find that, under health care reform:

• State health care expenditures have risen by $414 million over the period;

• Private health insurance costs have risen by $4.311 billion over the period;

• The federal government has spent an additional $2.418 billion on Medicaid for Massachusetts.

• Over this period, Medicare expenditures increased by $1.426 billion;

• For a total cumulative cost of $8.569 billion over the period; and

• The state has been able to shift the majority of the costs to the federal government.

The federal government continues to absorb a significant cost of health care reform through enhanced Medicaid payments and the Medicare program.   Health care reform has also increased the rate for Medicare Advantage plans in Massachusetts, which has contributed to an increase in Medicare health care expenditures through prices for medical service delivery.

This is not defendable.

It gets worse. The Beacon Hill Institute did a fraud study to determine how the RomneyCare system is being “gamed”:

Massachusetts Health Care Reform Mandates: The Gaming Gamble

http://www.beaconhill.org/BHIStudies/HCR-2011/GamingMandates2011-1128.pdf

The law requires that individuals with sufficient means purchase health insurance and that businesses with more than ten employees make a “fair and reasonable” contribution toward their employees’ health insurance. Under the law, health insurance companies cannot refuse to cover individuals with preexisting conditions.  Individuals and businesses face fines if they fail to comply with the mandates.

Because the fines imposed by the law cost are often less than the cost of insurance, the law is vulnerable to the problem of moral hazard.

Individuals can game the mandate by buying insurance only upon being diagnosed as needing a non‐emergency procedure such as a hip replacement and then canceling their insurance after receiving the treatment or procedure.  Businesses can likewise game the mandate by canceling their health insurance plans and shifting their employees to newly subsidized state plans.    Massachusetts taxpayers and health insurance policyholders pick up the tab for these “jumpers and dumpers.”
The Beacon Hill Institute (BHI) has estimated the prevalence and cost of gaming the mandates.  We find that:

• In tax year 2008 (the latest data available) 26,000 individuals paid a total of $16 million in fines, while 758 businesses paid $7.1 million.

• In 2009, between 2,089 and 2,659 individuals gamed the individual mandate at an estimated cost to insurance carriers of between $29.3 million and $37.3 million.

• Between June 2006 and June 2010 enrollment in state subsidized insurance plans increased by 319,000, while the private group (employer) market was flat and the individual market increased by 83,000.

In essence, the incentives in RomneyCare, just as in ObamaCare, are backwards. They encourage people to behave in ways that maximize costs and inefficiency. This is what economists refer to as an “Adverse Selection Spiral”. Eventually the system collapses under the weight of its own costs and inefficiency.

UPDATE – Thomas Zaleski adds:

Wouldn’t it be great if you could purchase AUTO insurance AFTER you had an accident? That is PRECISELY what Romney care is. Break a leg, BUY insurance the SAME day!