The health care law will drive costs and not lower them

By Kevin Price

The health care laws that were passed earlier this year by some of the most questionable techniques in US public policy history have begun to go into effect. They come under the name "Affordable Care Act," but promise to be anything but affordable or caring. They promise to drive prices up at a pace we have never witnessed before. Insurance companies are scrambling to comply with the first effects of the bill. And as it is implemented over the next several years, you will find the accessibility of private insurance shrinking. Liberals in Congress wanted to force the public option (government health care only) from day one, instead they are getting it by destroying the private system through higher costs and forcing people into the government's program.

The New York Times is reporting that "Insurers said they are reducing administrative staff to lower overhead, investing in technology and training employees to field an anticipated increase in customer inquiries."

UPI reports that the following provisions went into effect in September:

— "Parents may keep children on their plans until age 26 if the child isn't offered coverage through an employer." Insurance companies are also referred to ask "risk management companies." The higher the risk, the higher the costs. One does not have to be an economist to see that if a company is going to be responsible for children up to the age of 26, the company's risks go up also. That will have a bearing on the costs

— "Insurers no longer may deny coverage to children because of a pre-existing condition." This will cause an exponential increase in health care costs for insurance companies and to the individuals that use them. It will dramatically increase the unknown risks that insurance companies will face in insuring a client.

— "Lifetime limits on essential benefits are abolished." This type of provision will bring down many of the smaller insurance companies, reduce competition, and raise prices for everyone. The provision alone will have that effect without the impact of reduced competition. In states without limits on doctor's liability, the cost of insurance for neurologists is often as much as $100,000 a year. Like everything else, this cost is transferred to consumers. This legislation will likely have the same effect and be a significant cost driver.

— "Insurers must pay for services such as immunizations, mammograms and colonoscopies, without charging deductibles, co-pays or co-insurance fees." One of the most important innovations in health care over the last two decades for containing costs was the rise in "consumer driven health." Simply put, the more responsibility of the cost placed on the individual, the more responsible he or she will be in the way it is used. This government provision will be a bonanza to any hypercondriac, at least until that person can no longer afford the insurance. What the politicians do not seem to understand is they cannot force these businesses (insurance companies) to give these services away. The costs will be paid and because of the impact provisions like this will have on behavior, it will be in the most expensive ways one can imagine.

These provisions are only the beginning and mark the end of private health care as we know it. Instead of prohibiting private insurance, the federal government is simply going to make it completely impractical except for the very rich.

© Kevin Price