The ACA Increased, Rather Than Decreased, Administrative Costs Of Health Insurance

The ACA made administrative costs of private health insurance go up, not down. While insurance companies did actually reduce administrative costs in the individual market, the amount spent by the federal government to establish and operate the exchanges vastly exceeded that savings. So, the ACA ended up providing government-subsidized administrative services to health insurance companies – surely the opposite result than the ACA advocates (no friends of insurance companies) would have wanted. And the “subsidy” was inefficient: The government spent, on average, $1,539 per person enrolled in exchange coverage, and saved the insurance companies an average of $149 per enrollee by doing so. Overall, the government spent $10.32 for every dollar they saved the insurance companies. (If you average in off-exchange enrollment as well, the government expenditure comes to $628 per covered person.)

Source: The ACA Increased, Rather Than Decreased, Administrative Costs Of Health Insurance

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s