Why Insurance Premiums Are Really Going Up


c50f1b_b09a1cfecc6443e9a96d4041fb91451cAndy Lazris, author of Curing Medicare, has just written this excellent article in Real Clear Health.

Increasing ACA Premiums: The Real Drivers of Cost Aren’t Being Addressed

With political candidates sparring about the 25 percent increased premiums for Affordable Care Act (ACA) insurance plans, the questions of why has this occurred and how we can ameliorate it are bouncing around the media. As a primary care doctor, the answers to these questions reveal themselves every day in my office. While it is convenient to demonize the ACA, insurance companies, and even Big Pharma, the actual cause is related to flawed assumptions and rules within our health care delivery system. One just has to see where insurance pays its money to understand how to fix the problem.

More than 50 percent of Medicare’s non-HMO funding is sent to hospitals and specialist doctors, often for procedures and interventions shown to have little value at high cost. For CareFirst in Maryland, 23 percent of funding is for specialist care and 40 percent for hospital/facility cost, much of this incurred by elective procedures.  Only 5 percent of cost goes to primary care. Such excessive spending for aggressive procedure-based medical care is a salient reason that insurance companies are raising premiums. Is such spending beneficial?


A Shameful Aspect of Obamacare

On May 27th, the New York Times ran a story in the Business Section highlighting a truly shameful aspect of the ACA, aka Obama Care.  Employers are now trying to avoid the so-called Cadillac Tax on what are considered to be high-end benefits, but which are really union negotiated benefits that everyone should have (and which all enjoy in countries with national health plans). Author Reed Adelson focused on a woman named Abbey Bruce who works as a nursing assistant and who, to make ends meet, has a second job as a cleaner.  Casey, Abbey’s husband, has cystic fibrosis.  He obviously wasn’t a responsible reproductive consumer and didn’t choose his parents well.  Before the new law, Abbey and her husband had an annual limit of $3000 to pay out of pocket on their medical expenses and $2000 on their pharmaceutical bills.  Now, thanks to Obamacare, they will have to pay $6,600 out of pocket annually.  Continue reading