Happy Fourth - ObamaCare Premiums Set To Soar

Here is the NY Times headline for one of the slowest news days of the year:

Health Insurance Companies Seek Big Rate Increases for 2016

And how big was it?

WASHINGTON — Health insurance companies around the country are seeking rate increases of 20 percent to 40 percent or more, saying their new customers under the Affordable Care Actturned out to be sicker than expected. Federal officials say they are determined to see that the requests are scaled back.

Blue Cross and Blue Shield plans — market leaders in many states — are seeking rate increases that average 23 percent in Illinois, 25 percent in North Carolina, 31 percent in Oklahoma, 36 percent in Tennessee and 54 percent in Minnesota, according to documents posted online by the federal government and state insurance commissioners and interviews with insurance executives.

The Oregon insurance commissioner, Laura N. Cali, has just approved 2016 rate increases for companies that cover more than 220,000 people. Moda Health Plan, which has the largest enrollment in the state, received a 25 percent increase, and the second-largest plan, LifeWise, received a 33 percent increase.

Why? Let's bottom-line this:

Federal officials have often highlighted a provision of the Affordable Care Act that caps insurers’ profits and requires them to spend at least 80 percent of premiums on medical care and related activities. “Because of the Affordable Care Act,” Mr. Obama told supporters in 2013, “insurance companies have to spend at least 80 percent of every dollar that you pay in premiums on your health care — not on overhead, not on profits, but on you.”

In financial statements filed with the government in the last two months, some insurers said that their claims payments totaled not just 80 percent, but more than 100 percent of premiums. And that, they said, is unsustainable.

At Blue Cross and Blue Shield of Minnesota, for example, the ratio of claims paid to premium revenues was more than 115 percent, and the company said it lost more than $135 million on its individual insurance business in 2014. “Based on first-quarter results,” it said, “the year-end deficit for 2015 individual business is expected to be significantly higher.”

But this is a post of hope and I've got some good news, listen: if you are talking to your family about ObamaCare this weekend, remind that not to worry about the premiums - they are probably spending other people's money!

Sylvia Mathews Burwell, the secretary of health and human services, said that federal subsidies would soften the impact of any rate increases. Of the 10.2 million people who obtained coverage through federal and state marketplaces this year, 85 percent receive subsidies in the form of tax credits to help pay premiums.

Hillary can explain all this next summer.

TO WHICH I MIGHT ADD: Federal subsidies of a product can bring down total cost if (IF!) the subsidies carry the producer past the problems of achieving economies of scale and progress on the learning curve. Of course, the manufacturers often absorb that - the first new model car, or Boeing jet, or solar panel to roll off the production line costs a lot more than the thousandth.

But is that happening in health care, or higher education? Doubtful. In which case, the subsidies merely transfer costs, rather than reduce them. And, in the case of health care, raising demand for services without increasing the supply (e.g., relaxed licensing requirements or expanded professional scope for Registered Nurses) ought to lead to price increases.

Or, if you favor pith and humor, try Cafe Hayek.

Comments

[henry]

Yes, the ACA was all about cost control and saving insurance markets, the SC told me so.

At least I can blow things up today.

[Lazybusy]

Have a great Fourth all!

[James D.]

If we still have a functioning United States in twenty years, John Roberts will be looked back on as a traitor in the same league as Benedict Arnold.

[Steve]

In Congress - July 4th, 1776.

http://commoncts.blogspot.com/2015/07/in-congress-july-4-1776.html

[Miss Marple]

It strikes me that Obamacare is operating on the same sort of theory as student loans-college tuition.

Captive customer base paying increased amounts for something of little value. Escalating costs passed on to borrower or customer.

[Old Lurker]

Wrong, James. We think of Arnold because we were taught history and respect for what our forefathers accomplished against all odds. Future inhabitants of this place will know just what the state wants them to know.

[Old Lurker]

Two great headlines at Drudge:

Greeks prepare to raid bank deposits.

Greek villages prepare to grow their own food.

[Miss Marple]

The Greek Eurozone crisis, as explained on Japanese television:

[Miss Marple]

Useful if you live in Greece:

http://www.dailymail.co.uk/femail/article-3149224/Beat-heat-budget-DIY-expert-reveals-create-homemade-solar-powered-air-conditioner-just-FIVE-MINUTES-using-bucket-fan.html

[Miss Marple]

This is an interesting article, full of charts and statistics and maybe a little too pedantic for a holiday, so bookmark it to read later:

https://jaymans.wordpress.com/2015/07/04/demography-is-destiny/

[Jamesb bkk]

It's a tax off the books of gov. What's not to like?

[jimmyk]

their new customers under the Affordable Care Act turned out to be sicker than expected administration propagandists had pretended would happen in order to be able to claim that the ACA would lower costs.

Fixed.

Shocking that this hasn't gone as "expected." All the mandates (contraception, kids up to age 26, etc.) also make the insurance more expensive.

[peter]

Happy Fourth everyone. JIB, two ships in the night. We are driving to Amagansett.

[Cispigmented Heteronormative Microagressive Ignatz]

Kerry and Barry invite and will honor at the WH the head of the Vietnamese communist party.

He holds no government position. Guess they just wanted to celebrate the 40th anniversary of Viet Nam's victory over us with a good friend and kindred spirit. A comrade in arms, so to speak.

If it wasn't for that damned 22nd amendment the two creeps could invite over the heads of IS and the Taliban in a few years to celebrate the victories over us that Barry and Kerry engineered.

[jaed]

Of the 10.2 million people who obtained coverage through federal and state marketplaces this year, 85 percent receive subsidies

Which is fine and dandy for those who are eligible for subsidies, but not for those whose income is a little too high. Or whose income isn't completely predictable a year in advance, because accepting subsidies is too dangerous since they can be clawed back.

[Miss Marple]

http://awdnews.com/political/prince-talal-of-saudi-arabia-my-visit-to-israel-shall-mark-the-new-age-of-peace-and-fraternity

[Apb]

Economies of scale? ECONOMIES OF SCALE!?! Ridiculous - healthcare ins't the manufacture of widgets that can be optimized through a better, more productive machine! It's constrained by the number of health-care professionals willing to go through the education and intern process,,,

Oh, wait. Are we going to import low-cost healthcare labor through TPP to slow the rate of increase? Maybe that way the rate of increase can be slowed to 2x or 3x the rate of inflation.

[boatbuilder]

I'm looking for suggestions for a good movie to watch for the 4th. My wife has suggested "Independence Day" with Will Smith, which neither of us has seen.

The 4th of July theme is not particularly important; anything that's good will do. Wife is not a big fan of excessive violence (neither am I) but we both loved the "Homeland" series because it is intelligent and well-done. We don't watch a whole lot of movies so anything good of recent vintage that's out there we probably haven't seen.

[DrJ]

boatbuilder,

"Independence Day" is a guilty pleasure. It is not high art, but it sure is fun.

[boatbuilder]

Thanks, Dr. J.

Since we both loved "Buckaroo Banzai" and "3rd Rock from the Sun", are any of the aliens played by John Lithgow?

[John Fembup]

"Federal officials say they are determined to see that the requests are scaled back"

Yeah. That would be King Canute.

[narciso]

115%, Houston we have a problem,

[DrJ]

bb, no Lithgow. It does have Goldblum, who even as an earthling is just odd.

[Cecil Turner]

At least I can blow things up today.

And that's always good.

[DebinNC]

TCM is showing two good ones this afternoon - The Devil's Disciple and 1776.

[Cispigmented Heteronormative Microagressive Ignatz]

--...so anything good of recent vintage...--

I detect a problem.

[Cispigmented Heteronormative Microagressive Ignatz]

MM's 8:34 link is a good one.
Written by a very liberal atheist of black Jamaican and other assorted ancestries and yet makes a Charles Murray Bell Curve argument including as it applies to immigration.
Doesn't expect assimilation either.

Well worth reading as is other stuff at his blog.
I think he places too much emphasis on genes and not enough on environment but still interesting.

[Cispigmented Heteronormative Microagressive Ignatz]

His penultimate line may earn him a place in PC jail in the not too distant future;

All these facts should makes clear how key demography is to societal outcomes. The people make the society. If you want a better society, you must (in one way or another)get better people. This has obvious consequences for immigration and for many other matters as well. Only time will tell if these facts come to be appreciated for what they are.

[Captain Hate on the iPad]

Weren't Buckaroo Banzai and Repo Man two of the first examples of movies that bombed initially at the theaters and then became insanely popular on cable?

[Cispigmented Heteronormative Microagressive Ignatz]

Michael Lind letting his inner bigot out.
Does any argument he makes not apply even more so to blacks? Would he have the courage to say that?

[narciso]

yes, they were, I couldn't get into repoman, but Banzai does have it's odd charm,

[Cecil Turner]

I think he places too much emphasis on genes. . .

Laugh while you can, monkey boy! (I tried to resist, but . . .)

[pagar]

Think any conservative is safe?

.ijreview.com/2015/7/359940-young-black-conservative-famous-for-asking-if-obama-loved-america-is-harassed-into-big-announcement-2/

My guess is no conservative is safe.

[Cecil Turner]

And did anyone besides me get infuriated by the government Democrat propaganda we all paid for? (With talking points no less?) Grrrrrr.

Add in the signs for ARRA, the outright marketing for Obamacare (before and after passage), and I'm thinking the DNC owes for some in-kind contributions.

[Skip]

One look at the comments to the NYT article tells one everything we need to know about public thinking. Blame the insurance companies, institute "single-payer".

[narciso]

no, just the Eloi contingent, but single payer is the goal, by default,

[danoso]

Anyone know if Obama plans to give a eulogy at the Kathryn Steinle funeral?

[radioone]

The majority of residents of Minnesota think "losing 115%" is just what those "evil" companies deserve.

[Janet]

Ya figure Kerry & Obama will bring up Communism's history of slaughter? I realize it isn't the Crusades, but still...

[narciso]

a quick rejoinder:

https://twitter.com/Uncle_Jimbo/status/617344393729675264

[Tom Maguire]

Re the Michael Lind Politico piece, and purely as an aside - he mentions Houston and Dallas as emerging "tolerant meccas for transplants".

Is Mecca really known for tolerance, or is that a massive metaphor fail? This is from Wikipedia:

"The Kingdom of Saudi Arabia is an Islamic theocratic monarchy in which Sunni Islam is the official state religion and non-Muslims are not allowed to hold Saudi citizenship.[1] Children born to Muslim fathers are by law deemed Muslim, and conversion from Islam to another religion is considered apostasy and punishable by death. Blasphemy against Sunni Islam is also punishable by death, but the more common penalty is a long prison sentence. There have been no confirmed reports of executions for either apostasy or blasphemy in recent years.[2]

I vote "Fail".

[Cispigmented Heteronormative Microagressive Ignatz]

--Ya figure Kerry & Obama will bring up Communism's history of slaughter? I realize it isn't the Crusades, but still...--

Nah. The arc of history bends toward killing running dog lackeys.
Muslims blocking and killing Christian pilgrims and attempting to conquer and subjugate Byzantium and Western Europe, not so much.

[jimmyk]

I think he places too much emphasis on genes and not enough on environment but still interesting.

Thomas Sowell did a lot of work on this topic back in the 70s and 80s. His point wasn't so much genetic as cultural, that immigrants bring with them their habits and skills from the old world and it has a big impact on what they do in the new.

[rich@gmu]

boatbuilder-

Guardians of the Galaxy. Lots of fun.

If you were going to brave the theater, Jurassic World was pretty good. Yeah one of the bad guys gets eaten by a raptor ... satisfyingly, like when the lawyer in the original gets eaten.

[Miss Marple]

I love this country.

Here is a bunny in a parade, dressed in camo and riding in a miniature tank with an American flag:

https://instagram.com/p/4t8MI_m-sA/

[rich@gmu]

TM made the top of memorandum ... should dig up cathyf's comments from way back going through the various economic problems of Ocare.

>>>It strikes me that Obamacare is operating on the same sort of theory as student loans-college tuition.<<<

sort of. one way to avoid college costs though is to not go to college and don't give our political class the idea to pass a tax (fine, penalty, &c) for not attending and being in good standing.

not getting qualified insurance gets you a penalty (ultimately trivial compared to the cost of carrying an Ocare policy but it can still be hefty for someone already broke).

[unlingua]

You realize this is all BEFORE expiration of the risk corridors, which terminate after 2016. That means, a year from now, all these insurance companies will be announcing 50-70% premium increases on the eve of the Presidential election. The Grandmother of Obamacare is toast.

[jimmyk]

That means, a year from now, all these insurance companies will be announcing 50-70% premium increases on the eve of the Presidential election.

Any bets on HHS figuring out some way to delay/extend this so the announcements don't come until 2017? That's been the pattern. Especially now that SCOTUS has ruled that the law means anything that the administration says it means.

[rich@gmu]

Posted by: narciso | July 04, 2015 at 10:54 AM

someone ought to have mentioned that to the Dread Pirate.

"Congress passed the Affordable Care Act to improve health insurance markets, not to destroy them."

[Miss Marple]

His wife works for a presidential candidate. Anthony Weiner, Super-Genius.

[Captain Hate]

Anyone know if Obama plans to give a eulogy at the Kathryn Steinle funeral?

Will he ever publicly state that it happened? Will the court jester MFM ever query him on it? Will the SF dipshits ever admit that having a sanctuary city is complicit in the death? Will Gavin Newsome open his ignorant pie hole about it?

#UnpeoplesLivesMatter

[pagar]

ttp://www.familysecuritymatters.org/publications/detail/is-obama-presidentially-incapacitated-by-narcissistic-rage

No words!

[maryrose]

Captain
Someone in Earnests press conference needs to ask the question
How many more murders will it take to deport or jail these illegal aliens
Enforce the law
Change it so ICE can put these criminals on ice

[dan obrien]

There is no such thing as private insurance. It's all ObamaCare even if not directly purchased through healthcare.gov.

http://musingsofthemadandliterate.blogspot.com/2015/06/aint-no-such-thing-as-private-insurance.html