ObamaCare’s impact on health costs.

“While it is too early to make a definitive connection, it appears that the regulation encourages young adults to switch from obtaining coverage on their own, where they will pay additional costs, to obtaining coverage as dependents, where parents and parents’ employers will foot the bill. The regulation hence simply shifts costs from one group of people (young adults) to another (their parents and parents’ employers). This sort of distortion contributes to increases in premiums that the Administration expects in response to the regulation.”

“Holtz-Eakin points out that this unconventional tax structure will dramatically skew the health care market in favor of non-profit providers. Insurers subject to the free will have to make up for the expense it imposes on their business somehow, either by cutting their costs or by raising their premiums. Those not subject to the fee will obviously not face this dilemma, and hence they won’t face any financial pressure to raise their premiums. However, the for-profit insurers subject to the fee will suffer the most, as their losses will be compounded by the fee’s non-deductibility. Holtz-Eakin calculates that for-profit insurers subject to the tax will have to raise their premiums by $1.54 for every $1 imposed on them by the fee just to break even.”

“But it’s not supposed to provide more coverage for the same dollars. It’s supposed to provide it for fewer dollars. Remember all the talk about how ObamaCare would ‘bend the cost curve down’? No doubt many of ObamaCare’s backers would prefer that you forget. When the cost curve remains the same or, as will almost surely happen, bends upward, they’ll be taking cues from the backers of RomneyCare in Massachusetts.”

“An annual fee to raise money for President Obama’s healthcare law will increase insurance premiums by billions of dollars on the whole, according to a new report by a conservative think tank. The American Action Forum, led by former Congressional Budget Office Director Douglas Holtz-Eakin, argued that the annual fee from insurers starting in 2014 amounts to a tax on the middle class.”

“This year the biggest looming question has been whether fledging payment revisions in Obama’s law, also mirrored by private insurance plans, are succeeding in holding costs down. The rate of growth the past three years has hovered under 4 percent, historically low. That’s coincided with a shift to paying hospitals and doctors for better quality, not just their sheer volume of tests and procedures. Obama has argued that his overhaul would begin to ‘bend the cost curve’ to more affordable levels. The analysts remained skeptical.”

“Some colleges are dropping student health-insurance plans for the coming academic year and others are telling students to expect sharp premium increases because of a provision in the federal health law requiring plans to beef up coverage. The demise of low-cost, low-benefit health plans for students is a consequence of the 2010 health-care overhaul.”

“HSAs prove that having more control over health care decisions goes a long way toward creating savings. Instead of building on this successful cost-saving model, Obamacare all but obliterates it. Many provisions of the law affect HSAs. For example, the medical loss ratio (MLR), which requires insurers to spend at least 80 percent (85 percent for group plans) of premiums on medical claims or quality improvement, weakens HSAs. Obamacare’s MLR does not take contributions to HSAs into account when determining if a plan meets the 80 percent threshold.”

“Some consumers and businesses might see a little extra cash this summer as a result of the 2010 health care law. The Kaiser Family Foundation recently reported an estimated $1.3 billion in rebates will be delivered from health insurers who spent more than the law allotted on administrative expenses and profits. What people don’t realize is that there’s a catch to this ‘free’ money. The rebates are required by an obscure regulation in the health care law, called the ‘minimum loss ratio,’ which also contains longer-term incentives for health insurers to increase costs that will be passed along to all of us. Instead of rushing to spend these extra dollars, rebate recipients are better off pocketing it to pay for higher premiums in the future.”

“President Obama promised that the brunt of any financial reckoning will fall mostly only on those making more than $250,000 annually. Under his healthcare plan, the economic agony starts at income levels that fall much lower than that.
Middle class families take note. A family of four with an aggregate income of more than $88,000 annually or an individual earning around $44,000 could find themselves badly strained by healthcare costs under the Obama plan.”

“As you may know, the Affordable Care Act raises taxes on pretty much everyone, directly or indirectly, in order to fund its expansion of coverage for the uninsured. Most of these new taxes are unwise policy. But one Obamacare tax increase stands out for sheer boneheadedness: the law’s tax on insurance premiums, a provision that will raise taxes paid by the government itself, and make insurance less affordable.”