Can one thing be the root cause of so much destruction? From destroying employer plans to killing new jobs, Obamacare gets a lot of credit. (For your edification, a few of my favorite naysayers: On Main St., Obamacare hurts hiring: Staffing CEO – CNBC, Obamacare killing traditional employer insurance – Forbes)
Yet the pathway from cause to effect is not nearly as clear and simple. It’s not like pushing one domino and watching the rest fall. Even the relatively straightforward argument that
Obamacare is increasing everyone’s health insurance costs – even this argument has flaws.
Before 2014 and health reform, health insurance rate increases have come from:
- More demand for high-technology treatments
- Blockbuster drugs
- Increasing costs for hospital care
- More services used per person covered
- More people covered
- Rising prices for specialists’ care
And myriad other factors. All of these factors are, to some extent, still in play in 2013 and 2014.
Health reform does deserve some credit for boosting health insurance costs. Indeed, some states are having sticker shock. Oklahoma’s insurance commissioner reported recently that his state will have rate increases of 100 percent.
This is in part because their plans before Obamacare were so lean – meaning, they covered few services, had higher deductibles, etc. – that coming up to health reform’s Essential Health Benefits standard is a dizzying trip. (See the Department of Health and Human Services Issue Brief Health Insurance Marketplace Premiums 2014 for a thorough discussion of this apples-and-oranges issue.) Yes, health insurance prices are skyrocketing for these states in the same way that transportation costs become outrageous when you go from pedaling a bicycle to fueling a car.
In some states, insurers will for the first time accept all comers, pay for their current health problems, and set premiums based upon age and not health status. These are all significant steps and represent costs. Some states have more steps to take to reach health reform’s minimums.
Add to this a stream of previously uninsured people entering the market, employers adjusting their plans, and a new insurance exchange system being born. Could any of these factors also be contributing to 2014’s rates?
In health policy as in life, one thing (event, change, law) will have many different impacts on another (rates, enrollment, hospital prices). These impacts may be good, bad, or indifferent, but saying that Thing A caused all of Things B, C, D, E is foolish at best. If the line from cause to effect were that bright and obvious in all things, imagine the illness we could avoid – cancers, even the common head cold!
Yes, health insurance rates are going up next year as they have virtually every year since the beginning of health insurance. This year, there are some new factors in the mix but health reform deserves less credit or blame than it is getting.