Good news on Obamacare premiums

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We’re finally getting close to the point where people can start buying insurance policies in the Obamacare exchanges, and all of the bluster about “rate shock” is running into reality. The bottom line is that the health care plan will be affordable for many people.

The main takeaway from an exhaustive new study of premiums on the Obamacare health insurance marketplaces: They’re generally going to be lower than expected, undercutting the persistent claims of “rate shock” by conservatives.

Marketplaces premiums are coming in below initial estimates, said the nonprofit, nonpartisan Kaiser Family Foundation in a new report released Thursday.

The expected monthly premium for a 40-year-old adult purchasing a silver-level plan (the baseline, which covers 70 percent of costs) on a marketplace had been $320, according to previous projections from the Congressional Budget Office. But in 15 of the 18 regions studied by Kaiser, the average premium will be below that — thus the study’s conclusion that the prices are going to be lower than anticipated.

“While premiums will vary significantly across the country, they are generally lower than expected,” the authors wrote.

In some states like Wisconsin, Republican administrations are trying to push the notion that premium prices are rising, but the information they are putting out there excludes the subsidies available to many people.

The key for everyone is to actually go into the health care exchanges once they are open and see for yourself what is available.

Pleasant surprises in store for Obamacare?

Here’s some welcomed good news from of all places California:

Predictions of an Obamacare apocalypse seem a little less credible today, thanks to California.

On Thursday, officials in that state offered the first detailed glimpse of what consumers buying health benefits on their own can expect to pay next year. And from the looks of things, these consumers will be getting a pretty good deal.

Based on the premiums that insurers have submitted for final regulatory approval, the majority of Californians buying coverage on the state’s new insurance exchange will be paying less—in many cases, far less—than they would pay for equivalent coverage today. And while a minority will still end up writing bigger premium checks than they do now, even they won’t be paying outrageous amounts. Meanwhile, all of these consumers will have access to the kind of comprehensive benefits that are frequently unavaiable today, at any price, because of the way insurers try to avoid the old and the sick.

Guys like Paul Krugman are heralding these new numbers.

If these numbers play out in other states as well, we could see a surge of people getting more affordable health insurance coverage.

Are health care costs starting to stabilize?

Health care costs are the biggest contributor to our long term deficits, and so this issue gets a ton of attention in Washington. President Obama has argued for years that simply bending the long term cost curve on health care will result in huge savings regarding government spending helping to reduce deficits. The trend may have already started.

Health care spending growth has famously slowed over the past five years, significantly enough that the Congressional Budget Office recently revised its projections of Medicare and Medicaid spending over the coming decade downward by hundreds of billions of dollars.

Now, research papers suggests the recent slowdown doesn’t just reflect temporary economic weakness, but also structural shifts in how health care is delivered and financed — possibly attributable to the Affordable Care Act — and thus might be a harbinger of a longer-term trend.

If they’re right, and the trend continues, it means workers can expect higher wages and the country’s projected medium term deficits are significantly overstated, which in turn suggests lawmakers’ continuing obsession with the current budget deficit, and deficits over the coming decade, are misguided.

One of the keys to Obamacare is to move our health care system away from fee for service care to health care delivery that takes a holistic approach where doctors and hospitals are paid for overall care and outcomes as opposed to more tests and procedures. It makes sense that this shift has started to decrease overall costs.

Let doctors see health care costs

stacks of 100 bills

Here’s a fascinating tidbit. When doctors know the cost of tests and procedures, it affects how often they will order them.

We also know that patients will think twice when they have to pay even modest amounts for tests.

This is all just further evidence that we need to change the way we do things if we’re ever going to reform our health care system and fix our long term budget issues.

Perverse incentives for hospital profits

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If you want to know one reason why our health care system is so screwed up, please read this article. It explains how hospitals often make more money when complications arise during surgery.

Patients who suffer complications after surgery are lucrative for hospitals, which get paid more when they treat infections and other problems, according to a study published in the Journal of the American Medical Association today.

In 2010, an unnamed, nonprofit 12-hospital chain in the southern U.S. was paid an average of $49,400 per person for treating surgery patients who have complications — more than double the $18,900 paid for patients who underwent only the initial surgery, according to an analysis by researchers from Harvard Medical School and elsewhere.

Read the entire article for details on this problem. We need to alter these incentives and pay for health care that actually works. Incompetence and mistakes should not be rewarded.

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