Saturday, December 21, 2013

Obamacare (continued)

A couple of weeks ago my company renewed our insurance policy with Blue Cross Blue Shield.  Part of this process was all of the employees having to sign reenrollment paperwork.  This was where I found out that not only had the company’s share of the premium increased, but I was also going to have to pay in an additional $50 a month.  The real kicker, however, was the deductible.  It went from $2000 to $4000.  So in 2014 I’ll be paying more for less coverage.

The insurance agency we use had sent in a senior person, in addition to the clerks who normally process the open enrollment.  His job was to answer the inevitable questions.  His first response when asked about why I was paying more and getting less was some airy hand waving and “Obamacare.”  When pressed a little further, he came up with “we’re required to charge the actuarial value of the policy.”

I told him I understood about actuarial value, but that did not really answer the question.  Insurance is essentially a zero sum game.  Everyone with a policy puts money into the system.  Some people pull money out of the system, and use it to pay medical bills.  If I was putting more money in, then someone was getting the benefit thereof.  I wanted to know what the specific changes were that enabled someone else to get more money out.

You see, I was operating under the assumption that Obamacare had minimal impact on the small group health insurance market.  More fool I.

So, after the insurance agency rep agreed to be more specific, and I let him out of the headlock, he shared some of the details with me.  One of the big chunks is preexisting conditions.  I had not realized that with our current company insurance, there was a one year waiting period for coverage on preexisting condition.  So if we hired someone with cancer or AIDS, they would not be covered for a year under our policy.  Obamacare requires Day 1 coverage of all medical conditions.  This is a win for people who change jobs with chronic health problems.  It is a loss for everyone else.

Another area of increased cost is pediatric dental and eye care, for people with family coverage.  The new regulations now require that coverage.  This is a win for people with children.  It is a loss for people who do not have children on their policy.

The requirement to provide birth control is another regulatory requirement that has gotten a lot of news coverage.  If you use birth control: winner.  If you don’t, well … you know what category that puts you in.  The rep for the insurance agency ‘fessed up that there was no one large cost driver in the regulations.  There were a whole series of small adders that drove up the premium cost.

One of the selling points behind Obamacare was that it would “bend the cost curve.”  Put another way, part of the rhetoric used to sell it was that it would reduce the overall cost of health care in America.  That was BS then, and it is BS now.  The baseline philosophy behind the law was that all Americans have a right to unlimited medical care.  Since a single payer system was a political nonstarter, they decided on the current, massive injection of government into the health care system, through the insurance market.  The people selling the plan would have said anything in furtherance of that goal.

What they either forgot, or just did not care about, is that in a zero sum game like insurance, there are both winners and losers.  And what they really lost sight of was that in health care, there have to be a lot of losers to make up for a relatively small group of winners.  So everyone in my company is going to lose, so that a few people can win.


This is not the kind of game I enjoy playing.

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