Brace Yourself... Health Reform, Rising Insurance Costs and the PPACA-yderm in the Room

The New York Times breaks down the legal challenges facing PPACA, the Des Moines Register warns of looming rate increases, the Buffalo News thinks PPACA can still do a lot of good while the Washington Times says its doing more harm than good, and the Heritage Foundation suggests there's a PPACAyderm in the country's economic woes room.
As mentioned in a previous article, the Department of Health and Human Services and the Treasury Department continue issuing guidelines and handing out establishment grants for the Patient Protection and Affordable Care Act ("PPACA") health insurance exchanges even as the constitutionality of PPACA's individual mandate requiring U.S. residents to purchase health insurance seems to be on the fast track to the Supreme Court.

The "core fight is whether Congress... can require people to buy private health insurance."
A New York Times editorial breaks down the current legal challenges facing PPACA and its individual mandate, asking: Will Health Care Reform Survive the Courts?
The legal battle over the constitutionality of the health care reform law will determine how far government can go in helping to improve people’s lives. Ultimately, the Supreme Court will have to decide this question. Until then, the pileup of lower federal court rulings — responding to some of the more than two dozen lawsuits filed against the law — is confusing and sharply divided, especially on the requirement that individuals buy or obtain health insurance or pay a penalty.
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The core fight is whether Congress, under its powers to regulate interstate commerce, can require people to buy private health insurance if they don’t want to. Although the law has many elements, the mandate is an important tool for reaching the goal of near-universal coverage — and needed to make health insurance reforms work.
The editorial ends by calling for judicial restraint, urging the Supreme Court to "let political leaders determine what health care reform should be."


Bad luck? Within two months of Congress passing PPACA, "the trend in job growth dropped sharply."
With respect to the country’s current economic woes, James Sherk of the Heritage Foundation points out what may be the elephant in the room – an elephant President Obama has named “Bad Luck” but Sherk calls PPACA – asserting that private-sector job creation stopped improving almost as soon as Congress passed the health reform legislation last year.
In May private sector job growth dropped sharply to less than 50,000 net jobs. Thereafter, monthly improvement in private job growth averaged just 6,500 jobs.

What else happened in the spring of 2010? Despite obstacles that many believed would kill the bill, Congress passed the Affordable Care Act. Within two months, the trend in job growth dropped sharply. Monthly job creation had been on pace to top out in the hundreds of thousands. Post-Affordable Care Act, it has barely kept pace with population growth.

Correlations do not - of course - prove causation. The fact that job growth slowed after Congress passed the Affordable Care Act does not prove that the legislation is at fault. There are, however, good reasons to believe that the law applied the brakes to hiring.


LTC insurers request premium rate increases of up to 30% in Iowa.
On a related note, the Des Moines Register’s editorial warns Iowans to brace themselves for rate increases, stating that insurance companies have asked the State of Iowa for permission to increase premium rates as much as 30% this year, primarily with respect to long-term care insurance. While the editorial notes that long-term care policies are relatively new, it blames insurance companies for failing to accurately predict future costs and expenses.
Now that people are living longer and filing claims for care, insurance companies are increasing premiums on others to pay those expenses.
The editorial asks why insurers are seeking rate increases for as much as twice what Iowa state regulators have determined are necessary. Apparently without any research or analysis to try to answer that question, the editorial concludes that insurers “cannot justify raising rates as much as they want” based on a quote from an Iowa state regulator.

Ominously, the editorial concludes:
In Iowa, state regulators are the only thing standing between Iowans and huge rate increases. Yet the increases the state approved can still add up to a lot of money for Iowans. If premiums become unaffordable, they may have to drop their coverage and walk away from a large investment in premiums.
Watch out for that elephant, too, Iowans.


Despite its drawbacks, PPACA "has done and can do a lot of good."
In his column for the Buffalo News, Douglas Turner suggests that PPACA can still do a lot of good.
While so-called Obamacare is a disappointment, the administration and many states like New York are working to squeeze what good they can out of it as the nation waits to see how the U. S. Supreme Court will rule on the sweeping law.
Turner suggests that the Supreme Court will, more likely than not, disallow PPACA’s health insurance individual mandate, but the rest of the law will survive. He goes on to explain his opinion that PPACA will help consumers even without the mandate.
Despite its drawbacks, the Affordable Care Act has done and can do a lot of good. Medicare clients can get wellness exams without co-pays. Americans now have freedom from worry about lifetime limits on coverage. The law has funded state programs to keep customers from being ripped off. No child can be denied coverage because of a pre-existing condition, a provision that will be extended to all in 2014.


A "rationally devised formula developed and administered by government bureaucrats will not reduce costs and improve efficiency."
Tracy Miller at the Washington Times disagrees, positing that policy pressures and government subsidies will result in a pricey government-run program that is Doing More Harm than Good.
Insurance could become affordable for most of the uninsured via the subsidies included in the PPACA, but the amount spent on subsidies likely would far exceed the government’s cost projections, adding considerably to government deficits. Many healthy people will choose not to buy health insurance.
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Thus, those who buy insurance will be sicker than average, and many will wait until they get sick to purchase insurance. Premiums will rise to reflect the higher health care costs of those who purchase insurance, making insurance too costly for young, healthy people who do not qualify for government subsidies.

The problem with the PPACA is that a rationally devised formula developed and administered by government bureaucrats will not reduce costs and improve efficiency. Rather, demand and the costs of meeting health care needs would be controlled more effectively with decentralized decision-making in a market economy.

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