There are two lines of headlines feeding off each other in an attempt to add new positive spin to Obamacare. The first is the myriad of declarations that “HEALTH CARE COSTS PER CAPITA ARE SLOWING,” or some such variation. The second is recent reports that “OBAMACARE IS COSTING BILLIONS LESS THAN ANTICIPATED.” Wow. Desperation. If you’re buying into the “good” news, I’ve got to tell you you’re nuts (of course in my opinion).
Drive yourself nuts with statistics but DO NOT FORGET how insurance works. Insurance works by taking in more than it pays out. The extent of profit is determined by how much more is taken in (via premiums) than is paid out (in claims).
Insurance costs can ALWAYS be reduced by paying out less which will preserve acceptable profit margins for insurance companies so that they don’t have to charge more in premiums (or more realistically so that premium increases will slow.)
Back to the headlines, beginning with the second one first attributing the reduced cost of Obamacare (the cost to the Federal government) as less than anticipated because of, “…law’s Medicaid expansion and the subsidies for private insurance plans proving less costly than initially anticipated,” (Tom Kludt explains for, “TPM,” December 3, 2013)
Go through reality. Why would Medicaid expansion in Obamacare, which widened the groups of individuals eligible for Medicaid in the 50 states IF the state took advantage of the Medicaid expansion. If the state took advantage of the Medicaid expansion, the Federal government, at least in the first couple of years would PAY ALMOST THE ENTIRE COST TO COVER INDIVIDUALS IN THE STATES WHO WERE BROUGHT INTO MEDICAID UNDER THE EXPANSION. This is a COST.
However, as of November 6, 2013, 25 states and Washington, DC have chosen to expand Medicaid. Half the states. Likely, this is where the savings are coming from. But why? Remember, Obamacare wanted to make Medicaid expansion mandatory, which was the reason the federal government provided for paying for those newly covered individuals under the expansion. Originally, ALL Medicaid funding was dependent on states expanding Medicaid. Until the Supreme Court said, “No,” and made expansion optional.
Therefore, by losing their case to make Medicaid expansion mandatory for all Federal dollars for Medicaid, rendering the expansion optional, AND because only 50% of the states opted in, the Federal government will pay out less for Medicaid expansion coverage to the states.
Well, the Federal government is saving money BUT all those individuals who would have been eligible for Medicaid as a catch-net, including in many places single adult heads of households who didn’t compound their economic situation by having children to support with their reduced means, are screwed, no Medicaid.
Is this a good thing? Hardly. It’s an obvious thing…By paying for fewer people, Medicaid expansion doesn’t cost as much money. Hardly genius and hardly a success since the fewer people are because the Administration lost its Supreme Court bid to have the original mandatory Medicaid expansion declared legal, which would have meant 50 states instead of 25 would have been costing the Federal government money. But you know how Democrats love a good twist…Two failures, one to get the mandatory expansion declared legal and the other to get all the states to opt-in, are suddenly a victory in the headlines, “Obamacare costing less!”
Now as for the “SLOWING” of per capita spending on health costs. There’s going to be a lot more bickering here, but there is a reality that ultimately, as everything else we’ve asserted here will become apparent. People’s costs for needed medical care have NOT gone down, in fact they’ve risen. What you’re being charged for medical services is up.
So how has per capita spending gone down? First, people are not going to the doctor as often. Also, health insurance companies are paying LESS for each person’s care due to evolving standards of what will be covered (which will also be less if we continue the way we’re going) which means individuals pay more.
While it’s a bold assertion to declare any kind of success for our country and its citizens based on these headlines, somehow Democrats are boldly pulling it off with Republicans once again silently sitting in a delirious and oblivious stupor mumbling, “Repeal.” This is why we have this mess, one sided misrepresentation of facts designed to sway public opinion and silence or idiotic rhetoric from the other side.
