ObamaCare’s impact on health costs.
When campaigning, Massachusetts Governor Deval Patrick promised to lower health insurance costs for families. When the tightly regulated Massachusetts insurance market resulted in increased premium costs, he turned to price controls. Insurers successfully appealed to have the Administration’s rate freezes overturned, because they would lead to insurers going out of business. ObamaCare is structured with similar regulations as the Massachusetts health system, and Obama made the same promises about lowering premiums, which are proving impossible to fulfill, so federal price controls might be in our near future.
Among ObamaCare’s supposed selling-points are its insurance regulations which require companies to sell insurance to everyone at the same price, regardless of whether they’re healthy or sick. But if you can buy insurance after you get sick, there’s no reason to pay for it until you need it. Massachusetts instituted these reforms in 2006, and they’ve led to a significant increase in costs, which is exactly what will happen when ObamaCare forces these regulations on the whole country.
As the Congressional Budget Office has said, ObamaCare would raise the cost of health insurance — it would raise the average family’s annual premiums by $2,100 in the individual market — but the mainstream press and the Obama administration have responded to this condemning news with a mix of yawns and cheers.
Evidence of a significant free-rider problem in Massachusetts may be a harbinger of things to come under Obamacare.
The culture of Washington doesn’t like to admit mistakes and, if necessary, to correct them — and Obamacare is one giant mistake in need of correction via repeal.
The truly effective way to lower health-care costs — and to increase fairness at the same time — is to allow all Americans to deduct their full health-care costs (not just their insurance costs) from both their income and payroll taxes, thereby leveling the playing field between those with employer-provided insurance (whose taxes wouldn’t change) and those who purchase insurance on the open market (who would no longer be the only ones taxed on income used to purchase health care). Not only would this actually bring down health costs — while ObamaCare would raise them — without increasing the size or reach of the federal government — while ObamaCare would increase these dramatically — but it would foster adult self-reliance and self-respect, not childlike dependence encouraged by a paternalistic government.
“The president and his team understood early on that they could not pass a sweeping health care bill without promising those with good insurance that, at a minimum, their coverage wouldn’t be harmed and their costs would not go up. Despite the relentless sales pitch, there was always a lot of skepticism among voters that such a government-heavy plan would leave them alone and be cost-free. Now, of course, their skepticism is being validated. Yes, the bill has passed. But a price will be paid for muscling it through to passage based on promises that are being broken just a few months after enactment.”
“Experts say the new regulations make holding costs down even more of a Sisyphean challenge for small businesses: If they make changes in their current plans to save money, they risk losing their grandfathered status and will be forced to comply with new mandates that are expected to increase costs.”
“One of the main arguments for both RomneyCare (the health care law Massachusetts enacted in 2006) and ObamaCare (the federal law enacted in March of this year) is that once the government mandates that everyone purchase health insurance, premiums will fall due to broader pooling. A new study published by the Forum for Health Economics & Policy suggests the opposite.”