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There is basically no real cost control in the bill, with the logical consequence being that insurance companies will do what they can get away with to raise pr
by kobeya 10y ago
There is basically no real cost control in the bill, with the logical consequence being that insurance companies will do what they can get away with to raise premiums so that the new premium rate minus subsidies equals the old premium rate. The extra requirements of the ACA, and the lack of universal roll-out basically ensures that there are plenty of excuses for doing so.
- nradov 10y agoFalse. The ACA imposed a minimum 80-85% medical loss ratio on insurance companies. This is a cost control. https://www.cms.gov/CCIIO/Programs-and-Initiatives/Health-Insurance-Market-Reforms/Medical-Loss-Ratio.html https://www.cms.gov/CCIIO/Programs-and-Initiatives/Health-In... But there aren't any real cost controls on providers, drug companies, medical device companies, and other suppliers.
- kobeya 10y ago> But there aren't any real cost controls on providers, drug companies, medical device companies, and other suppliers. That's what I said.
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- koolba 10y ago> False. The ACA imposed a minimum 80-85% medical loss ratio on insurance companies. This is a cost control. That's not a cost control. That's a price inflater! If the only way for them to make more money is to have the price of things go up, what do you expect they're going to be in favor of? In a perfect world (from the perspective of the insurance company), everything from premiums to procedures goes up X% so that their profits go up X%. That's a seriously messed up system and may be the most egregious part of the entire ACA.
- neaden 10y agoBut total medical spending growth slowed, which seems to indicate that this price inflation didn't happen.
- kobeya 10y agoDid it? As an industry, hospital and lab management companies outperformed the general stock market (which itself was doing very, very well) for 2010-2015. Compare VHT vs VTI, for example.
- nradov 10y agoInsurers have to compete against other insurers on price. Otherwise they lose market share. All of them negotiate hard with providers to drive down prices.
- kmkemp 10y agoThe creation of exchanges was so that insurance companies would have to compete in a market where customers had an apples to apples comparison tool. Theoretically, that should drive down rates in places where there are enough insurance companies for market forces to take over.