Published July 18, 2013
President Obama made a speech at the White House Thursday to talk about how a provision in his health care law is forcing insurance providers to give rebates to consumers.
But there were many issues with his most recent address to the nation, and here are my top five:
1. Rebates are savings to consumers.
President Obama claimed that consumers in states such as Maryland received a windfall as a result of refunds issued by insurance companies who failed to meet the requirements. These requirements tried to enforce insurance companies to spend at least 80 cents on every dollar towards medical care and not administrative costs. If, in fact, the Affordable Care Act was working the way the President claims, insurance companies should be staying above the 80 percent threshold, and not providing refunds. While money in the pocket may seem like a bonus for the consumer, the fact of the matter is that they have failed to receive the kind of services and care which they have paid for.
2. The new insurance pool will reduce costs.
The president claimed that in the state of New York, premiums will fall as much as 50 percent. That is a huge win at face value, but if you look behind the curtain, you realize that New York is an exception because where individuals were required to buy insurance there was no penalty. So the risk pool of individuals buying insurance was actually higher and premiums were significantly higher as well. A 50 percent reduction off an already inflated price is no different than buying something on sale where the original price was inflated.
3. People are getting more choices and better benefits.
The president said in his speech Thursday that as a result of the Affordable Care Act, individuals would, in fact, have more choices and better health benefits. How can this possibly be the case when the Affordable Care Act has forced more consolidation in the market with an increase in the number of hospitals buying up physicians’ practices, and leading to a smaller number of doctors available in any given network?
Comparing the value of benefits goes beyond mere conjecture in being able to adequately compare the economic value of a particular plan choice and how effective it is for individuals to get the right care. From day one, the Obama administration has equated access to benefits as being synonymous with care, but they are not. The toughest choice for the American consumer is trying to figure out whether they will get benefits from their employer, or purchase them from the exchanges. Many small employers have opted to either defer providing benefits, or provide the most minimal benefit to meet the requirements. This does not translate to better benefits, but, in fact, leaves the consumer in a more complicated predicament to truly understand what they need to best manage their care.
4. Health care costs have slowed drastically.
Many leading economic indicators suggest that the trend of inflation for health care costs has, in fact, slowed as compared to previous years. The reality is that it is very likely that, based on economic circumstances and the rate of unemployment, many individuals who truly require care have failed to access the system which is providing a spurious view of health care trend. This is no different than what we saw with managed care in the 80s when people thought HMOs were efficient at controlling costs, and it was only a matter of time when the market recognized that costs were low because people were being denied the care they needed.
5. 85 percent of America is seeing more value for every dollar.
The president claimed that the majority of Americans today have already enjoyed the benefits of ObamaCare by recognizing more value for every dollar they spend. How do we really know that since value is defined ultimately in health care by the best possible outcome for the lowest possible price? The recent experiment of the efficiency of coordinated care projects published a few days ago revealed that while quality did improve costs, in certain cases, it did not. While there has been a big push towards accountable care organizations and coordinated care, the reality is that we are not ready or prepared to declare victory in providing value to the American consumer, because we don’t have the means of truly measuring it. Also, the technology and systems required to truly measure the value of the health care system is completely under-funded.
So, while the President may continue to emphatically attempt to convince Americans about the successes of the Affordable Care Act, it still remains to be seen how successful what has been promised as utopia will truly materialize. There is, however, one consistent message that remains true. Since the inception of ObamaCare the numbers never add up.