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Choice and Competition Death Watch

On the campaign trail and all through the first year of his administration, President Obama touted the benefits of his health care plan. One of the often repeated phrases that his legislation sought to increase choice and competition in the health market. Across the right it was widely predicted that the kind of legislation that the President was seeking would provide for just the opposite effect. We would in fact see a decrease in choice and competition.

We were right.

One doesn’t have to look much farther than a few key events of the past two weeks to see that the President’s pet legislation is having disastrous effects in the health care market.

It was just two weeks ago that many of the nation’s largest health insurer announced (albeit quitely) that they would no longer be issuing child only policies. This was a direct response to the portion of the legislation that required insurance companies to make all child policies guaranteed issue (meaning that coverage cannot be denied for preexisting conditions).

Last week, McDonald’s requested a waiver from the federal government from a provision of the new law that requires a certain percentage of premiums that must be spent on benefits. Many companies like McDonald’s only offer “mini-med” coverage which has capped annual benefits. Without the waiver, McDonald’s and many other businesses will no longer be able to offer affordable health benefits to all of their employees.

On Thursday, the Association of American Medical Colleges released estimates that the current legislation will increase the shortage of physicians in 2015. Their figures say that the shortage will be 50% worse than it was before this legislation. This owes to the fact that while increasing health insurance coverage for millions of Americans was the primary goal of this legislation, little was done to address the supply issues that come with that dramatic of an increase in demand.

Finally, just yesterday the Wall Street Journal reported that 3M would be making changes to it’s retiree health plan options as a result of the legislation. Instead of offering a company sponsored health plan, retirees will now receive a reimbursement to purchase health insurance on their own. Anyone who has ever purchased health care in the individual market will tell you that there is definitely going to be a huge amount of sticker shock as the reimbursement will likely never be as generous as the subsidy the company was paying for their health plan.

What should be clear by now is that this is just the beginning of the highly anticipated (for those of us who were paying attention and knew how the health insurance market worked) and probably hoped for repercussions of the new legislation (because what better way to get a bigger piece of the pie for the government than to make the government the only player in major parts of the market).

Choice and Competition Death Watch will be a semi-regular feature.

COMMENTS

  • BA Cyclone

    Principal is a huge employer in Iowa and announced late last week they’d be leaving the market altogether…offering “new policy quotes” to their customers via UHC.

    In interviews the company reps said over and over it was not tied to the new laws. So yes I’m sure it’s a total coincidence that they don’t want to invest “new capital” into the business as all the “new demand” Obama is supposedly creating. Meanwhile insurance choices go down, and lots of solid jobs in Iowa are destroyed. The company said impacted employees would likely be absorbed, reductions would mostly come through attrition…but the net is still needless job destruction and decreased competition.

    Central planning at its best.

    • Brian Simpson

      I knew I was forgetting one. Thanks.

  • Deskpilot

    City, County, and some State HC benefits managers have been carefully reading the tea leaves as to how they will impact their respective COSTS, giving no regard t benefits. That’s not what they are paid to monitor.
    So as the COST to provide the same level benfit goes up, one of three things have to happen:
    1) Reduce the number of beneficiaries that they have to cover = Layoffs or accelerated attrition;
    2) Demand that employees pay a greater share out of their income.
    3) Raise taxes to astoninshing levels and face the ire of EVERY citizen on an hourly basis.
    The union members only see themselves in (1) and (2) and never even give consideration to their membership in (3). When govt’s have reduce benefits as a direct result of managing cost, the employess with their UNION hats on, will scream bloddy murder, on the clock, at the capitals.
    If gov’t is forced by the gov’t unions to pay for everything, they will be forecd to scream at the capitals on their own time with their TAXPAYER hat on.

    Union members just can;t see the destruction that this Obamacare pan has wrought.

  • Finrod

    .

  • avgamerican

    Your analysis is right on. Some how the left convinced enough people to focus on the 40 million or so without healthcare and then persuaded them to believe it as a crisis. What was left out was that we have the best healthcare system in the world and that the ususal suspects were determined to destroy it. There is no such thing as a guarantee accept that socialism leads to economic collapse and mass poverty. But as I said, enough voters were convinced otherwise which is why we have President Barack Obama.

  • Brian Simpson

    Fixed it now. Thanks.

  • http://www.libertytreehugger.com reverelth

    and he’d be half right, since this is what the free market does when the rug is yanked out from underneath them…by government.

    The chattering class seems to be careening between denying this is really happening and finding blame with someone other than the architects of this abomination.

  • Michael Dugas

    The governments fingers have been artificially manipulating the market for awhile now. Hence the mortgage crisis which was ENTIRELY brought on by the governments interference in the housing and mortgage and banking industry’s. The governments total subservience to leftwing groups like ACORN and La Raza and allowing them to overly influence policy has left us wounded and
    broke. The outcome of all Socialist policy.

  • joehnewyork

    If you like it you can’t keep it. That’s what Barack Hussein should have said.

    Please Check out song called teapartiers I can?t hear you at
    http://www.youtube.com/watch?v=cJfboOindCo

    Here?s a verse

    Baucus is threatening insurance companies Obama the CBO
    Medicare Advantage and free speech is about to go
    He?d rather see people in our forts , planes and La liberty building die
    then to see a muslim terrorist get water in his eye
    All the insane and pervert czars and the communist ones too
    are surprised how easily they took us without even a coup

    Hey guys if you fought at the Khe San
    when they stop giving your wife her meds and her last breath comes over her face
    you?ll find comfort knowing some illegal or Gitmo detainee will gladly take her place.

  • BA Cyclone

    …in the mess that already existed in the market for medical care. So the only way to fix the mess: more government of course!

    Examples are too numerous to link that prove time and again that costs are exhorbitant in large part because the government keeps sticking its nose in between the patient and the providers.

    The less the patient sees the price of the service, regardless of what that service or product does – what else can happen to the price but for it to become exhorbitant? There is almost no pricing mechanism in the market for medical care, unless you happen to be a cash consumer. Most people have no reason to seek value, especially those who tend to use care the most (elderly) because they are on the “government” plan. Medical care is already treated as an entitlement for many, if not most.

    Pacific Research Institute had a great study about a year ago that tracked costs of private care vs. public care since the inception of Medicare in 1965. You can guess which is cheaper per person today.