Monday, 07 March 2011

Premiums and 'Obamacare'

Reason writes:

As the one year anniversary of the Patient Protection and Affordable Care Act nears, The New York Times notices that health insurance premiums still haven't gone down. Just the opposite, in fact:


We know, for example, that benefit mandates drive up the cost of insurance. This ought to be self-evident to anyone who's ever purchased, say, car insurance: A bigger benefit package means more expensive premiums. The same is true in the health insurance market.

(my emphasis)

Now, is there anything in that NYT article that Reason left out?

Well... yes.

Some insurance industry lobbyists say the new federal health care law is driving up premiums. But Vincent Capozzi, senior vice president for sales and customer service at Harvard Pilgrim, said that only one percentage point of the increases here was attributable to the federal law, mainly its requirement for free coverage of preventive services.

Another percentage point results from new state laws requiring coverage of hearing aids and certain treatments for autism, Mr. Capozzi said. Most of the remainder, he said, reflects increases in the use and cost of medical care by small-group customers, with adjustments for demographic characteristics like age.

This in a story that's talking about increases this year of 20-40 percentage points! Perhaps mandates are not, in fact, the main driver of costs, hmm, Reason?

posted at: 20:01 Mon 07/Mar/2011 | /politics | permalink | 0 comments | trackback

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