ObamaCare’s impact on health costs.

“Individuals seeking maternity coverage in the non-group insurance market are discovering fewer options are available as insurers seek to cut costs to meet the regulatory demands of President Obama’s health care law. Blue Cross Blue Shield of South Carolina dropped the coverage to save costs and keep premiums competitive, and insurers in other states have followed suit.”

“What they found calls into question the assumptions that health policy wonks have been making for years: While Medicare indeed spends almost twice as much more per patient in McAllen than in El Paso, Blue Cross spends about the same in both places. In fact, Blue Cross’s per-patient spending was actually slightly lower in El Paso. These findings persisted for overall spending, as well as for spending on specific types of services and several specific diseases.”

“The recently enacted Patient Protection and Affordable Care Act aims to transform regulation of private health insurance. It would put in place a new federal regulatory regime that prescribes various mandates for covered benefits, imposes tighter restrictions on insurance premiums, sets limits on how premium dollars are spent, and exerts much greater political and bureaucratic control over health insurance.”

ObamaCare created an unworkable cost-control method when it proposed Accountable Care Organizations to manage care in Medicare. Medicare’s payment board is predicting that they will have negative consequences and is calling for them to be pared back. 

ObamaCare is premised on the assumption that government-run systems lower costs better than patient-centered health care. “Private insurance plans might be better at controlling healthcare costs than Medicare, according to a Health Affairs study released Tuesday morning.”

“Incentives count, it turns out. People will do what they are paid to do. Doctors paid to implant stents will implant stents.
Doctors paid to think long and hard about whether a stent is necessary may be less eager surgeons. This story will not be the last in this genre as incentives settle into place under government-run health care.”

In light of evidence that cost controls in Medicare result in wide disparities between different regions, a study was conducted to see how private insurance fared on that measure. It turns out that medical providers respond differently to pressures in a private, competitive market and private health plans are better able to control costs than government-run plans.

“If ACOs become the only possibility for organizing, financing and delivering care, physicians and patients alike will find themselves in a treatment straightjacket. Thus, government should not give ACOs a competitive edge. If the ACO is such a good idea, let it develop in an open pluralistic market with no subsidy or other government advantage.”

“Liberal consumer groups are aghast to learn that the Obama health team are really monopolists at heart, bent on handing hospitals a cartel in their local markets. Sunday’s New York Times report on this horror confirms what I wrote about in these pages weeks ago… I warned that the creation of ‘accountable care organizations,’ which put hospitals in control of all the doctors in their outlying areas, would lead to concentrated power over the provision of medical care–turning physicians into salaried employees and reducing consumer choices.”

ObamaCare mandates that plans allow children to stay on their parents’ plans until age 26. This raises premium costs, driving many plans to drop coverage for dependents altogether. “One of the largest union-administered health-insurance funds in New York is dropping coverage for the children of more than 30,000 low-wage home attendants, union officials said.”