She Didn’t Purger Herself

Amid the rising cost to the consumer in terms of healthcare particularly in the increase of cost of healthcare premiums see my previous post concerning the personal real cost of the Affordable Care Act, Secretary Sibelius testified that the overall cost of healthcare is going down.  She said this before a Congressional hearing in Congressman Issa’s committee.  

This statement may or not be true depending on the source I have read several conflicting reports.  One such report that backs up the claims of the Secretary can be found here.

What is certain is the cost to the average consumer and what they will specifically notice immediately.  That of premium and deductible increases largely across the board.  We know that from 2003-2011 the total increase in insurance premiums was 62%, from 2011-2014 it is an increase on average of 65%.  In this respect, if only this respect the Secretary was just plain wrong.  The cost to the consumer has not slowed down it has in fact more than doubled, and this is directly related to the Affordable Care Act.

Other numbers that she mentioned were the reduction in costs by Medicare.  Being that the Federal Government funds medicare and decides what bills get paid and by how much this isn’t a very large accomplishment.  What should be noted is the number of Doctors who simply don’t accept Medicare anymore.  It really shouldn’t come as a surprise that the costs of Medicare are dropping, people can’t use it, a lot of people can’t use it.

As for other costs.  Well the insurance market has made overhead costs and paperwork so ridiculous many private practice physicians are getting out of the insurance market and going to concierge medicine.  This removal of the middle man and application of a more free market medicine is resulting in cost reductions. 

These things are nothing new at all..  Years ago while I was in high school I was discussing the problems of healthcare with my boss.  I had suggested that the best way to lower the cost of health care was simply to get the insurance companies out of the business all together.  The result would have been to free up and create a much more competitive medical industry.  I acknowledged at the time that a great many, hundreds of thousands if not millions of people would suffer, doctors would not be able to pay off all their student loans and many patients would die because they wouldn’t initially be able to get coverage for catastrophic events because they simply could not pay for it.  This horrible draw back aside, our medical industry would eventually stabilize and costs would be affordable for everyone over what I assumed would  be a ten year period.  

It was a horrible idea, I was a child and I thought like a child.

This current approach however of some doctors here and there removing services and medical insurance acceptance is a gradual one that is correcting with a controlled effort the costs to the consumers.  It is a good movement and it is efforts like these that are lowering the cost to the consumer.  I’m not arguing for no insurance, as a grown adult I’ve come to see the value of it more and more.  As an indestructible youth I clearly didn’t value it, I already had my health I just had to take care of it.  

The point is that the overall cost of care is going down as a collective because of the competition created in the market not because of the Affordable Care Act.  More to the point, the Affordable Care Act is mandating everybody has insurance.  If you have insurance and are going to somebody who doesn’t accept insurance you are paying twice.  If you don’t have insurance you are still paying the Federal Government because that insurance is mandated and there is a tax if you don’t get coverage, so again you are paying twice.  

If however you are going to see a practitioner who accepts insurance you are paying once, but with increased premiums and deductibles while it might cost the insurance company less money to provide your care it almost assuredly is not costing the consumer less money.  In essence what the affordable care act is doing is providing some padding to insurance companies.  

Of course as I pointed out in my last two posts: A Bailout for insurance companies, and The Poorly Named Affordable Care Act, this padding is hardly an assurance the insurance companies will make a profit.  To the contrary the very people who need to sign up are not, meaning the insurance plans are not sustainable and will need to either fold or eventually be bailed out to work.  At best roughly half a million American’s have signed up for health care under the new law’s requirement.  This is from October 1st to December 10th 2013.  To reach the goal of sustainability an estimated 80,000 per work day with 49 work days between October 1 and today that should have yielded a total number of sign ups at 3,920,000 signups.  With less than 13% of their goal registered, not even paid for yet this is a very tough sale to accept.

So, as I pointed out earlier.  The Secretary is telling the truth, it is just that out of context it means something completely different than the reality for most Americans.  The overall cost is going down.  For the majority of Americans that trend however, will not be noticed.  The flow isn’t going into the pockets of households it is being eaten up by bureaucracy and frittered away in the nonsense this law created.