Obama has announced that rates are going up by an average of 25%. This is interesting considering there are a good number of states that are going up between 50% to 92% [that's the expected range]. I suspect there is some statistical magic and they used the lowest baseline. However, what really annoyed me is that Obama had the gall, the unmitigated gall, to tell us “Look…no one is going to pay all that much more…because you get credits. So, it costs more…but you get more credits, so…it’s okay. If you have an employer plan, you’re not going to have these rate increases.”
Yeah…right. One, we will have a rate increase due to taxes. Where do you think those credits come from? They come from tax dollars (or more appropriately…debt). So, when they increase the tax credits, they also must increase our taxes. It’s that simple.
Insurance companies are being forced to sell plans to people with pre-existing conditions. They are also limited in the amount they can charge for these plans. Since they have no choice but to offer these plans, the way the insurance companies make up the difference is by charging healthy people more for their plans. Do you think that they won’t charge “employer plans” more if the other option is bankruptcy?
The main driver of increasing medical costs is the third-party payer system. When you have a third-party paying, there is little incentive for patients to be price adverse. Why should they haggle on the price when they are not the one paying? Why should they question if they need this procedure more than another procedure? Third-party payer systems remove the mechanics that set a market efficient price.
The cold fact of the matter is that Obamacare has also increased the demand for medical services without increasing the supply at all. With more patients chasing the same supply, this forces the price upwards. Since medical services increased in price, the insurance must also increase in price.
Of course, the Democrats will say that the only option is to go to a single payer system. Yes, of course! Government meddling has done a fantastic job so far. Surely, more government interference is just what we need. Here’s the truth: it may feel like you are not paying for insurance, but it’s just that the costs will be hidden from you. It will come out as withholding and surtaxes and decreased defense spending and death panels and all kinds of things like this. Mark my words: don’t buy the poison.
Long Live the Constitution!