What's behind the huge premium increases on the Obamacare exchanges?
Supporters and opponents offer wildly different explanations and theories. They all pore over the data and get into the details of who is signing up, what the risk pools look like and other things actuaries find exciting.
However, the reason for the big price hikes in 2015 will not be found in such data. The timing has nothing to do with health care, patients or consumers, and everything to do with politics and crony capitalism.
It all stems from the fact that the giant health care companies have been the biggest winners from the passage of Obamacare. That's why they joined with the Obama administration to defend the law in a recent Supreme Court case. When the law was upheld, health care stocks soared. And why not? The law is worth billions of dollars to health care giants.
More recently, the Los Angeles Times reported that "a gusher of Obamacare money is fueling a merger frenzy in U.S. health care." That came a day before "Aetna Announces $37 Billion Merger with Health Insurance Rival Humana." This is crony capitalism at its worst — big government and big business working together against the rest of us. Health care reform was needed, but real reform would have focused more on empowering consumers and reducing costs rather than padding the profits of insurance companies.
For a corporate executive without scruples, Obamacare is a dream come true. Other titans of industry must be jealous that the insurance companies got the government to force every American to buy their product. More precisely, the government forced tens of millions of Americans to buy more insurance than they need or want.
That's great for the insurance companies, but not for anybody else. Consider, for example, workers who have insurance provided by their employers. As companies are forced to pay higher premiums to pay for all the newly mandated coverage, they reduce the amount of cash paid directly to their employees. In effect, the paycheck of American workers has been trimmed to improve the profits of America's health care giants.
One simple reform to fix this would let working Americans decide for themselves how much insurance they want to buy. Those who want more insurance would opt for less take-home pay, while those who prefer a bigger paycheck could opt out of some coverage they don't need. That would be a major blow to the insurance companies because millions of workers would take bigger paychecks and cost the insurance companies billions.
With so much at stake, the health care giants have a vested interest in opposing any changes to Obamacare. They want to do all they can to avoid making it an issue during the 2016 election.
That's why it makes sense to get the big premium hikes out of the way in 2015. Sure, they'll get some bad press in the short term. But it's better now than during the height of the presidential campaign season.
In fact, I'd expect to see much smaller premium hikes announced next year along with a chorus of activists hailing those results as proof the law is working just fine.
The problem is that it's working fine for the insurance companies and not for the rest of us.
To find out more about Scott Rasmussen and to read features by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate Web page at www.creators.com.
