September 3, 2017
As is the case with doctor, hospital and lab bills, the presence of a third-party payer results in higher prices for prescription drugs than would otherwise be the case if a pharmacy dealt directly with the patient. That’s because the third-party payer system severs the direct link between the consumer and the producer of goods and services that allows market forces to work. Doctors, hospitals, labs and pharmacies negotiate with a deeper-pocketed third party, not the consumer, to arrive at a price.
A March 2017 Consumer Reports interview with University of Minnesota professor of pharmacoeconomics Stephen Schondelmeyer summarizes the problem. Pharmacy retail chains are more concerned about what third parties such as insurers will pay, rather than what customers themselves can afford. They focus on setting high list prices to ensure that insurers don’t cut into their bottom line.
Source: Free Birth Control from the Third-Party Trap – Morning Consult
August 22, 2017
Thousands of North Carolina residents have been exempt from the Affordable Care Act and got to keep their old health insurance, paying significantly less for their coverage than those insured under the ACA.
But that’s about to come to an end for 50,000 customers of Blue Cross and Blue Shield of North Carolina. In 2018, they will have to switch to ACA plans, in some cases paying twice as much or more for health insurance.
Source: Blue Cross to end “grandfathered” health insurance in NC | News & Observer
August 18, 2017
The unsurprising part is CBO’s expectation that if CSR subsidies are withdrawn, sponsors of silver plans will hike premiums substantially.
The surprising part is that CBO found that not only would this generally not hurt low-income participants, it would on balance benefit them – especially older Americans below 400 percent of the poverty line. The primary losers, under CBO’s analysis, would be federal taxpayers. Add it all up, and terminating the CSR subsidies would paradoxically lead to a substantial increase in progressive income redistribution.
Source: Cutting Obamacare Subsidies Would Benefit Poor, Says CBO | Economics21
August 9, 2017
The National Business Group on Health said Tuesday the percentage increase large companies will see next year is similar to 5% cost increases employers have experienced for five years. In its annual survey of large employers, NBGH says per employee costs are projected to increase 5% to $14,156 in 2018 compared to $13,482 per employee this year . Since employers generally cover about 70% of worker costs, employees’ 30% share next year will be nearly $4,400, which includes premium and out-of-pocket expenses
Source: Employers Will Escape Obamacare-Sized Rate Hikes In 2018
July 26, 2017
In other words, under the ACA, healthcare cost growth has not slowed as much as economic growth has – while the ACA itself has been found to be one of the reasons economic growth has slowed. Considering all these factors together, the ACA has likely made health care spending less affordable relative to our economic resources, rather than more so.
Source: Obamacare Is Not Making Healthcare More Affordable | Economics21
June 16, 2017
Despite its name and despite some of the more grandiose claims by its supporters, the Affordable Care Act (ACA) is failing to make healthcare costs more affordable. Indeed, it’s possible that the ACA has achieved less than nothing with respect to health cost affordability — meaning less even than a hypothetical scenario in which it had never been enacted.
Source: ObamaCare Watch | Obamacare Is Not Making Healthcare More Affordable – ObamaCare Watch
March 22, 2017
Precisely because the CBO relied on research while the liberal critics of the CBO relied on managed care folklore, the CBO’s predictions of how the managed care fads in the ACA would perform were far more accurate than those of Obama, Baucus, Nancy Pelosi, Barbara Boxer, Peter Orszag, et al. The CBO’s December 2008 report estimated ACOs would cut Medicare’s costs by a tenth of a percent (see my discussion of this report in this THCB post ). That was remarkably accurate. Today (almost a decade later) we know CMS’s Pioneer ACOs have cut Medicare’s costs by a magnificent one-tenth to seven-tenths of a percent over their first four years (that’s not counting the costs the ACOs incurred) while the much larger MSSP ACO program has raised Medicare’s costs by about two-tenths of a percent (again, not counting the costs the ACOs incurred) over the same period.
Source: Democrats Paid a Steep Price For Ignoring the CBO. Republicans Will Too. | THCB