If the Massachusetts experiment with state-run health care is any indication, the Patient Protection and Affordable Care Act (ACA) — championed by President Obama — may not produce the promised reductions in health spending that were expected. And what's worse: in the ACA's implementation, it may leave more people uninsured than before the reform.
Massachusetts' health spending will dramatically increase in 2013, according to Boston.com. The move comes after small increases in recent years, coupled with a push to reduce costs.
"Representatives from the state’s nonprofit health plans as well as national for-profit insurers doing business in Massachusetts estimated the “medical cost trend,” a key industry measure, will climb between 6 and 12 percent this year — higher than last year’s cost bump and more than double the 3.6 percent increase set as a target in a state law passed last year," asserted the report.
A combination of what doctors and hospitals bill insurers charge, along with the volume of producers and services performed, the medical cost trend has accelerated due to a variety of factors. "If trends are going up, premiums are going," said Eric Swain, vice president of sales and account management for UnitedHealthcare (NYSE: UNH) of New England.
A suddenly increasing pool of insured people brought about by an improving economy was cited by providers, who have experienced an increase in demand for care and surgeries. Other cost drivers have been attributed to this year's influenza epidemic, anticipated cuts in Medicare and Medicaid and a rise in obesity — not considered to be a pre-existing condition.
A recent factor has also been the introduction of limited and tiered network products by insurers, which have risen in popularity as of late. Although members pay less than traditional insurance plans for basic care, they pay more for access to expensive procedures and top doctors and hospitals.
But the direct effects of Obama's health care overhaul may be even more worrying. Due to the taxes and regulations from the ACA, "about 8 million people [nationwide] who would have been insured by their employers will probably lose their coverage because of tax changes," according to Congressional Budget Office projections.
Not taking into account the direct effect of ACA on employers or insurers in Massachusetts, the ACA's inclusive nature may be leave more susceptible to rate hikes than the Mitt Romney-engineered health care plan, which already makes the Bay State one of the most expensive for health care in the country.
While the Massachusetts plan grants premium support and cost sharing subsidies to families with incomes up to 300 percent of the state poverty line, the ACA ups the ante to incomes 400 percent north of the federal poverty line.
Obama's plan bans lifetime and annual caps unlike the Massachusetts system, and allows young adults to stay on their parents' insurance plans until 26 — unlike the 25-year-old cutoff in the Bay State.
These factors, coupled with the growing problem of obesity — most prevalent among the lower income persons that Obamacare benefits the most — create a pool of Americans whose behavior may prove to be even more volatile for insurers and health providers' rates.
Follow Alex Biles on Twitter @disorderorder
(c) 2013 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
The push by Conservatives to repeal Obamacare, may be wasted time and effort. From all indications, the plan has an excellent chance of crashing under it's own weight. This would be an epic FAIL, not only for the Democrat party and Liberals in general, but for the entire country, considering the enormous amount of taxpayer $$ already spent on it. And this doesn't even consider what it will cast to "unravel"!
They're already doing it with the tax on medical devices. Next it will be medication--from there, the sky's the limit. the freeloaders must be taken care of.
It’s simple:Since they were able to insert a 10% tax on tanning beds, presumably because of potential skin related health issues, when the media ushers the Democrats and über brain power Pellosi back in charge of the House in 2014,(shutter), they can apply similar taxes on anything and everything that has ever cause a health related affliction, disease, or injury. 100’s of billions of dollars will roll in, birds will sing, and the sun will shine again as the Democrats can now buy the votes of a vast majority of entitlement minded Americans who can then assure them of perpetual control of Congress and we will all be saved.
Just do as you are commanded by your Omnipotent Leader! Shut up, lie down and accept what you have elected. The USA of our origins departed this world on 11/06/12 and will never be seen again.
Our nation has become based in reality by Hollywood! The Democratic Party ceased being based in reality following RFK's assassination. And, SADLY, in the liberal constituency, black is white is black, and a TAX is not a TAX but IS a TAX...but it's really NOT! I believe regular liberal folk have a big heart, as MOST Americans do...they are just (willingly) allowing the liberal wool to be pulled over their eyes, by a FAKE!
If it's all the insurance companies fault that health care costs are rising, everyone would choose the cheaper alternative of a mutual , right ? Oh wait..... mutuals aren't any cheaper than private insurers ???
The People's Republic of Massachusetts deserves what it gets. They drank the kool aid for years by being mesmerized by the Kennedys--live with the consequences.
One measure that would dramatically reduce the current cost of health insurance would be to allow the insurance companies to conduct business across state lines, furthering true competition between them. Competition invariably lowers cost to the consumer. Another thing that would reduce costs would be to stop promoting the fallacy that health insurance is a right, it isn't, it's a privelegde merited by paying for it through honest labor for an employer who provides it as a benefit, or through self endevor. Health care may be a right, but health insurance most certainly is not.
ObamaCARE, just like any FOR PROFIT BUSINESS, may INITIALLY offer lower costs. But that's just the BAIT to draw in customers. Then the SWITCH comes SOON AFTER! Why? Simply PUT: Just like the DOD paying $1500 for a HAMMER, MONEY MEANS NOTHING to the Government! Liberal Democrat politicians, constituents, and RINO'S all think the American taxpayer is an ENDLESS font of money. And, apparently, they ARE! America is WELL on the way to being ENGLAND where the Government takes 95% of YOUR hard earned money. So while it's my consideration that the English working class are FOOLS, are the AMERICAN taxpayers going to MIRROR England! Are WE REALLY THAT foolish? It looks more and more likely that we ARE!
Wake UP! oBooboCare limits care - Before if a Healthcare Provider wanted to be a "Provider" in an Insurance Company's Package of plans they HAD to sign a contract that they would accept payment of services for ALL plans including Medicare and Medicaid. Now that is no longer in the contracts. Providers can reject you on your insurance plan and there's nothing you can legally do about it. Now in this area less than 20% of practices accept Medicaid. Over 80% say they will be forced to stop accepting new Medicare patients. We also have 5 PRIVATE hospitals that are under construction and one that's been around for years. They DO NOT accept anyone on Medicaid and even advertise that as a selling point. This is also the hospital where all the top doctors are flocking to. We'll have a two-tier system were "some" people will receive top level care when they need it and in hotel like facilities. Then we'll have "Those" that will wait till there are resources, in older inner-city clinics, with less trained staff. You voted for it... So I guess you deserve it. But I treat my 'Patients' not "Units" and I will NEVER beg a government goon for permission.
I don't want Obahma Care or any goverment help of any kind. I pay for my cell phone and pay for my own healthcare. I love my kids and unlike you libatards I chose to keep them. Abortion is Murder and we the Tax Payer's do not want to fund murder. We the people are sick of all the Taxes and high gas prices and you Left wing morons! Understand this OBAHMA CARE is a Tax it will destroy us all maybe not at the present but in due time. We the God fearing and Child loving Americans want Change in our wallets and not to what this country's Four Father's founded. God bless our TROOPS stay safe.
Just propaganda from the health care industry whose prices are exorbitant and is the only reason health care is expensive, to many at the top making millions they don't want any change because it takes away from their meal tickets..And politicians both parties have been taking money from these institutions to make sure they get what they want after all politicians don't worry about health care that's why they don't care about the rest of us. Single payer was the only way and it failed to pass because of entrenched powers with money..So don't believe what the industry passes off to you as fact. Obamacare was doomed to fail it was planed that way it was all a dog and pony show to make you think that the democrats really cared about lower income working families...You know them ..Those who are borderline they make to much for help but don't make enough to afford the premiums the average run of the mill hard working Americans we have been screwed..Obama care will fail and things will go back to normal which is nothing is better than nothing..
It's hard to trust an article written with propaganda expressions like "Obamacare" and which talks in terms of "Obama's plan" since both such expressions are not based in reality. Obama in fact was very hands-off in the creation of the The Patient Protection and Affordable Care Act, which is actually a plan created by Democratic caucus of the United States Senate with the support of two independent senators and which was subsequently adopted by the House of Representatives and the signed by Obama as the only measure that could make it out of Congress following the death of Senator Edward Kennedy and his replacement by a Republican. Obama's role was to encourage the Congress to pass some form of health coverage plan but he left the details of it to Congress to work out with him merely accepting the finished product. Basically, if this article could not or would get such basic facts right, then you have to wonder what else the writer isn't or doesn't want to get right.
This was always about revenue. Younger people that don't really see the need for health insurance are going to pay the "penalty" instead because it's much cheaper. This is why Obama put the IRS in charge of over seeing Obamacare, it's all about the tax revenue the penalties will generate. The IRS is the only organization that can attach your wages and seize your bank accounts and property without a court order. The 16,000 plus new agents are there to audit accounts and collect those revenues, any way they can.
So MA healthcare system is costing the state to much? Imagine that$$ Just think of what it will cost the American taxpayers$$ Now that's scary$ But they will soon find that out. I wonder who's fault it will be then?
No surprise here To paraphrase Karl Marx: socialism is the opiate of the masses. And ObamaCare is socialism.
@EdBinVA It's a good deal, once they get fat enough, the can move on to social security disability, get a free scooter and get even fatter. This is the new American Dream brought to you by Obama and the liberal Democrats.
@sambarber The health care plan was supposed to REDUCE costs so even if health spending has increased everywhere else the law in Mass failed. Nice try at strawman argument, Sam.
Your reasoning is spot on but the Democrats don't want to solve problems and that includes crime, class and ethnic warfare etc and in some cases that goes for the Republicans ( exclude Tea party and True Conservatives from that group) .
Can you imagine if many of the major problems were solved and health care and immigration was run with the very best options as solutions? Why would we need the Democrats and progressives? How would they their power and access to all the money?
The Democrats need problems just as Hitler needed the world wide depression, the French Revanche and the Jews as scapegots.
No Tonydockery, blaming one entity is always easier than where the blame really belongs -government, yes government as when it sticks it's head where it doesn't belong, as usual, chaos and prices rise. I said it before and I will again, let the doctors/caregivers handle the costs---believe me they will do much better than government ever could. Want proof? Here's my story--I,had to,have my gall bladder removed and was healthy up until then and I chose not to buy insurance. The doctor I went to knew I did not have insurance and said " here's my deal-pay me half the cost in 6 mos. and I will consider your bill paid in full." Silly me, I thought he was doing just me a favor, well I found out later he did this for all costly surgeries. When I went back for a check up I asked him about this and he said, " I'.m not alone as many of us got into healthcare to help folks, but when government forced itself into this area, their cohorts(insurance companies were allowed in as well, and THEY not us determined costs"--quote unquote!!! So there you have it, the TRUTH at last.
@Gatorman9 you missed some points- this is a heritage foundation plan- a right wing think tank. it was the reps that insisted on no public option which would have increased competition and did insist on the mandate. as for health INSURANCE , i agree no one has a right to it, but do think ALL have a right to health care. this is the best that could come out of congress given the insistence on a market based system. as a liberal, I am glad we have the 8 hour day, 5 day work week, health and safety rules that protect workers from unsafe conditions, sick leave, vacation, right to vote for women and minorities, right to form unions to enhance the lives of the workers who do the ACTUAL work, retirement plans, medicare, parks, etc -- all the things that have made life better for the average man and almost all of which were fought against by the right wing or business community as " sky is falling" ideas.
@Gatorman9 You do note that none of the Democrats are calling it by its official name either. Because the name "Patient Protection and Affordable Care Act" isn't "based on reality" either...
@Gatorman9 Obama takes credit for Obamacare and argues for its continued existence. You're right though, he appeared to be hands off as he is with everything. He has his lackeys like Biden, Pelosi and Reid push his agenda, while he makes campaign speeches -- the only thing that he is truly good at. Then again all con artists would be good at campaign speeches.
@Gatorman9 So he ran on the platform after he stole it from Hillary, he spent the first 8 months of his presidency arguing that he promised no individual mandate, therefore he could not put one in (finally relenting when proving infeasible), he made back room deals with several senators was on the road preaching that we absolutely needed this and on several occasions criticized the republicans for not playing ball. Shall I go on? There is a reason it's called Obamacare, it's part of his legacy... to a certain degree, it's how he sees himself as one of the best 4 presidents in history. And in the 2012 elections, he stated he liked the term that both sides have been using since the beginning. BUT, by all means, please continue with you absolute brilliance on this topic!
Oh, and it's the CBO that has come up with the warning, not the author... FYI
@JerryEspositoJr At this point, the IRS can't file liens or levy to collect unpaid penalties. I expect that to change at some point.
Yes, it is about reform -- for all the health care associated companies and people at the trough. Hospitals, drug companies, equipment manufacturers, health insurance companies, lawyers and yes too, doctors. The long suffering doctors are the largest group in the 1%. That is why our health care system cost 18% of GDP, doubled that of other first world countries.
How much is the AMA, the Koch brothers, or some other greedy group robbing the "rest of us blind" paying you for such drivil?
@ConnieDr My son lives in MA and pays astronomical health insurance premiums, premiums that he really can't afford given the cost of living in MA. But that's the name of the game, transfer of wealth to those who don't want to work for living from those who do, even if they aren't the evil rich!
@Old Tex Sorry dude but paying money to an insurance company is not government health care or socialism its capitalism..After all was it not with their help and input from the very same carriers who helped write this law that mandates that all citizens pay them for healthcare...The government doesn't get this money and the ones the government will actually subsidize will have plans that are at the very least the minimum and not worth crap...Obama care sucks but it is not socialism its the good ol boy network looking out for number 1.
Well, then, can I have your Social Security retirement when you decide to take it?
Can I have your Medicare too?
Of course not. Folks like you never turn down a benefit that is fair and needed.
Actually, that was regarding religion, not Socialism. Also, I'm fairly confident that Socialism was part of Karl Marx's philosophy.
Anyhow, people, especially those in communist nations, have used it to make it sound like he didn't support religion, which I believe was more propaganda and misrepresentation by atheists who didn't want the masses to know what Karl Marx really said because if you read his actual statement, it sounds far more likely that he was saying, in a creative way, that religion gives people hope in a world that gives none, and it gives them relaxation in a world where one toils all the days of his life until he dies.
HOW DARE YOU YOU SAY "The Democrats need problems just as Hitler needed the world wide depression, the French Revanche and the Jews as scapegots"
I lost 98% of my family due to WWII, are you suggesting that the Democrates will do the same?
@SharonTomalavage < Exactly! I had the same experience when I recently had Cataract surgery! The Doctor quoted me a price, IF I had insurance, of $5300. When I told him I had none he told me he would do it for $3500 cash! Maybe the Doctors are "getting rich" - but it looks to me like insurance companies getting a cut of the action is a major factor in the cost of going to a doctor! Not to mention most "affordable insurance policies" insist we spend several thousand of OUR dollars before the services we pay THEM for will kick in! I call that a ripoff - and with Obamacare forcing one to HAVE insurance, a Government MANDATED ripoff at that!!! Talk about getting rich; ever see the home offices of some of these insurers??? I'd rather pay a "wealthy" Doctor who is happy in his work, than an insurance Co. that's getting rich for telling me what is and isn't covered! I can just imagine the boondogle of "single Payer" with Government collecting our premiums and regulating the care!
@cbreezeBig business is now a shill for the Liberals or the face investigations from every agency in the government with forged documentation if necessary.
@FEDUPINTX When you've lived as long as I have, you're going to find that Liberals have a hard time calling anything by its actual name--interferes with the delusions of Utopia.
@DougRiemer1 The "AMA" did NOTHING to reform or improve healthcare!
@DougRiemer1 Thinking like yours is why the problem will never be addressed. Obamacare didn't reform anything but the amount of government control. History shows that the bigger government has gotten and the more it tries to control every aspect of our lives, the worse off we all become. All of us except those that have decided to make a career out of government handouts.
@tonydockery Yes, paying money to insurance companies for what they offer IS Capitalism: BUT< being FORCED to buy insurance IS Socialism and is dictatorial! Capitalism is about free choice - Socialism is about doing as the Government orders! Unfortunately too many Americans have graduated from the schools being fully indoctrinated in the belief that government mandates controlling our personal lives is OK
You obviously don't understand either Obamacare or socialism. Anytime government takes the money and redistributes it "for the greater good and equality of all" that's socialism. Obamacare is indeed socialism.
When government takes ownership of a company or controls the company via regulatory and/or financial means, that's also a form of socialism. Yes, Obamacare is indeed socialism.
If you went to work you would pay for and be able to collect social security. Also there is a monthly fee for medicare. If you are on welfare I think you are getting something for doing nothing.
@Crask You could not possibly be more wrong, about Marx and religion. He wrote books about it , not just one statement.
He believed just what he said Religion is the opiate of the masses, ie, it is silly superstition that he believes blinds the uneducated and cajoles them into going along with the capitalist conspiracy of the bourgeois elites.
Men toil all of their lives no matter what. Some toil for themselves and others, some toil to hand it all over to chairmen of committees who they believe to be smarter and more compassionate than themselves. All this intelligence and compassion ALWAYS leads them invariably to breadlines, gulags, and dead people.
@Eye No kidding---I was a young kid when it started and a Conservative Democrat ! I am no longer either--have gone Independent.
Unfortunately, you don't know that the Democrats have transformed into the Communist party of America, look it up on the internet. They don't try and hide who they are. They just keep the Dem name to keep people thinking they are the old party.
@A real American I think the trend in the White House is very much like the trend in prior dictatorships, we are ignoring our constitution and running the country via executive fiat. Anyone who objects is labeled a radical and the Democrats just keep on drinking the kool aid! Hitler victimized the Jewish citizens and Obama is attempting to marginalize the conservative Americans. Let's see where it ends this time.
@ToddBurks Go back to the Russian Revolution and how the universities and secular institutions that were infiltrated by the Bolsheviks and you can't help but see the similarities.
When you look at the number of jacketed hollow-point bullets ordered by domestic agencies over the last couple of years I would say nothing is impossible. I have 21 years in the military (combined active and reserve) and have hunted big game since I was old enough to do it. Nobody practices with hollow points on a gun range, whether you are law enforcement or not. Practicing with normal jacketed bullets with same grain of bullet and powder charge is much cheaper and the firearm doesn't react any differently. So the story of the government buying HP for target practice is bs. Pure and simple.
@A real American One of my best friends lost half of her family in Russia during the war. My own family became prisoners in East Germany after the war. Listen to the rhetoric--there should be something familiar in it.
A friend tried private practice in a poor area of the country. He lost on every Medicaid pt and broke even on Medicare pt. this was 20+ years ago. Some MD are putting in their own money to stay afloat. Others are flocking to hospital groups to make it. Medicaid pt are going to have a hard time finding a MD