February 19, 2012

HOW DEMOCRATS LEARNED TO LOVE MARKET FORCES:

Why Obamacare is good for America (Dede de Percin, 2/19/12, Denver Post)

People without public or private insurance coverage are costly to all of us. In a familiar mechanism called "cost-shifting," hospitals charge higher rates for services to those with insurance in order to offset the losses from uncompensated emergency department care. Insurers raise rates to cover the cost of inflated bills, and the uninsured and underinsured are sent to collection agencies and/or forced into bankruptcy. Companies respond by scaling back on or eliminating health care benefits for their employees, and more Coloradans fall from the insured universe.

Indeed, small businesses have struggled for years with the double whammy of escalating health care premium costs and the inability to secure the better rates that large companies are able to negotiate. Now business owners with fewer than 25 workers may qualify for tax credits to help pay for employee health care benefits, thanks to Obamacare. These tax credits inspired some business owners to start offering health care coverage benefits for the first time and allowed other struggling entrepreneurs to continue offering benefits in a challenging economy.

Obamacare is starting to hold insurance companies accountable, controlling the runaway costs that prevent Coloradans from access to health care. For example, insurers must now justify premium rate hikes. Just last month, the Department of Health and Human Services found that a Pennsylvania insurance company's proposed rate increase of 12 percent was unjustified in relation to the benefits provided, and urged the insurer to rescind the rate, issue refunds or publicly explain their refusal to do so. While some states, including Colorado, were already regulating rate increases, before Obamacare there were no national limits on what insurers could charge as administrative costs. Now at least 80 cents of every dollar must be spent on actual medical care. [...]

A major cost-containment initiative of Obamacare is the exchange. In 2014, Coloradans will be able to purchase affordable insurance in the Colorado Health Benefits Exchange, a statewide nonprofit organization. Intended to be a competitive, online marketplace similar to Travelocity, Coloradans will be able to easily compare insurance plans. Subsidies to purchase a product will be available on a sliding scale based on income (an estimated 590,000 individuals in Colorado will be eligible), meaning many currently uninsured will be able to afford coverage.

While most Coloradans will continue to receive their coverage through work, small businesses and individuals finding it difficult to find affordable health coverage will be able to do so on the exchange, governed by a politically balanced board of directors.

Even members of Congress will receive their health care coverage through the exchange, ensuring that even our elected leaders will have some skin in the game.


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Posted by at February 19, 2012 9:34 AM
  

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