What impact has the Patient Protection and Affordable Care Act had on the cost of health care and the federal budget?
Several deadlines mandated under the legislation have been missed, including rule-making requirements, and programs meant to help small businesses cope with the law’s financial and regulatory burdens.
One portion of the law, the tax on medical devices, was so unpalatable that Congress has voted to repeal it.
A recent Investors Daily report noted that some of the legislation’s staunchest backers-including big labor and some Democrat senator-have been dismayed over the practical application of the measure. Response nationwide has been so bad that there has been a $332 billion raid on the public coffers to pay for public relations for its provisions.
The cost of the measure, originally estimated to be about $940 billion, has more than doubled, and even greater hikes are expected. In a worrisome analysis, the Government Accountability Office found that Obamacare will increase the long-term deficit in excess of $6 trillion.
The Congressional Budget Office found in 2012 that the current gross cost of ACA provisions grew in one year by $50 billion.
Last month, HHS Secretary Kathleen Sebelius admitted that health insurance premiums could rise. The statement came as insurers prepared to roll out 2014 rates that reveal increases.
An ABC news report notes that younger people seeking coverage will almost definitely pay higher premium costs, although seniors may pay less. Ironically, less affluent younger citizens may avoid having insurance altogether, eventually increasing the number of uninsured.
It’s not a free ride for the seniors. Advocates for seniors are deeply concerned that the legislation’s Independent Payment Advisory Board will increasingly turn down the type of costly treatments many older Americans need. Further, cuts in Medicare are being used to fund Obamacare. Nick Tate, author of the Obamacare Survival Guide, notes that there are concerns about the ability to develop a network of healthcare providers who can meet the needs of seniors.
In April, the Washington Post reports, cancer clinics across the nation began turning away thousands of Medicare patients , blaming the sequester cuts.
He also reports that the Kaiser Family Foundation found that in the year following passage of Obamacare, «health insurance premiums rose 9% for families…to a level that now exceeds $15,000 on average per year.»
The Wall Street Journal believes the reason is that «The Congressional Democrats who crafted the legislation ignored virtually every actuarial principle governing rational insurance pricing. Premiums will soon reflect that disregard-indeed, premiums are already reflecting it.» The Journal reports that «Health insurers are privately warning brokers that premiums for many individuals and small businesses could increase sharply next year because of [Obamacare] with the nation’s biggest firm projecting that rates could more than double for some consumers buying their own plans.»
Bloomberg news reports that premiums «may as much as double» for some small businesses and individual buyers.» Aetna Insurance warns that those insured will face a serious case of «sticker shock.» (Forbes magazine quotes Aetna chair Mark Brtolini’s prediction that som insurance markets are poised to incrase as much as 100% when Obamacare reaches full implementation in 2014, with the average increases between 25 to 50%.
A study from the Society of Actuaries, cited by the Associated Press warns that insurance companies will pay out an average of 32% more under Obamacare. According to the AP, «while some states will see medical claims per person decline…the overwhelming majority will see double-digit increases in their individual health insurance market…The differences are big. By 2017, the estimated increase would be 65% for California, about 80% for Ohio, more than 20% for Florida and 67% for Maryland.»
Small businesses will be particularly hard hit now, due to a year delay in a provision that was supposed to provide some relief for their additional costs due to Obamacare. In an interview with the New York Times, Sen. Mary Landrieu (D-La) worried that this delay will «prolong and exacerbate health care costs that are crippling 29 million small businesses.»
The detrimental effects will include more than health insurance. The ADP Research Institutenotes that many employers in low-wage fields will reduce their staff’ hours to under 30 hours per week to evade being subject to Obamacare.
Excluded from the law were market-oriented concepts which would have had an immediate effect on health care costs.
These include:
- Tort reform, which would have lowered the dramatic cost of malpractice insurance for medical practitioners, leading to lower patient costs;
- Allowing insurers to compete on a nationwide basis, rather than being confined to a one state at a time basis;
- Allowing nurse-practitioners greater latitude nationwide to provide certain less complicated medical services, such as prescribing antibiotics for common earaches, sore throats, etc.;
- Addressing excessive and unjustified hospital billing practices.
BY: FRANK VERNUCCIO
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