'Obamacare' saves consumers nearly $1.5 billion

[Playinghardball]

WASHINGTON — Consumers saved nearly $1.5 billion in 2011 as a result of rules in President Obama's healthcare law that limit what insurance companies can spend on expenses unrelated to medical care, including profit, a new analysis shows.

Much of those savings — an estimated $1.1 billion — came in rebates to consumers required because insurers had exceeded the required limits.

The study by the New York-based Commonwealth Fund also suggests that the Affordable Care Act forced insurers to become more efficient by limiting their administrative expenses, a key goal of the 2010 law.

In some cases, insurers passed savings on to consumers in the form of lower premiums and higher spending on medical care, the researchers found. This was primarily true in the individual market, where consumers buy health insurance on their own.

http://www.latimes.com/health/la-na-insurance-savings-20121205,0,3226241.story

[NoOneMan]

1. So did per capita health costs go down?

OECD numbers are not out yet for 2011, but the Office of the Actuary (Centers for Medicare and Medicaid Services) projected in mid-year to increase by $300.

So, consumers probably haven't saved a penny. Costs are just being pushed around in a shell game.

[bluestate10]

7. I saved real money. My copay went from $15 in 2011 to $5. It went to zero this year. Multiple that

by hundreds of millions of americans having two doctor visits per year. My HMO is leading edge, it went head over heels into preventative medicine more than four years ago. My visits for care dropped from ~4 per year to 2 this year (physical and an inflammation flareup).

[NoOneMan]

8. But if per capita costs went up, it means it didn't save the American people anything

Perhaps you aren't paying it, but someone else in your risk pool is (or government subsidies are, which are paid for by the American people).

The real key is per capita health costs. All this fancy, complex regulation is just changing the manner these costs are being paid, but not reducing the costs (and maybe not even the growth in the costs). We will see when the official numbers are published.

Whatever you aren't paying, someone else is. Its still a social cost. An economic cost. Anyone living in the system will be impacted by those costs in some way.

[democrattotheend]

2. The medical loss provision is important

I would have preferred a public option, but when I learned more about the law I felt better learning about the medical loss ratio provision, which forces insurers to spend 80% of what they take in in premiums on medical care.

[Dark n Stormy Knight]

11. I'll take this opportunity to kick this thread by complimenting your 2nd term graphic/link.

[wilt the stilt]

3. no wonder the repubs are mad

this could have been money for executives.

[Mnemosyne]

4. K&R

[underpants]

5. I saw this today and was hoping to post it

The MLR is clearly already having an enormously positive impact

[BlueStreak]

6. Here's an email I sent to my right-wing associates today

Some of the key cost control measures, such as the insurance exchanges, lie ahead in 2014. But one of the immediate benefits of the law dealt with the fact that the industry was systematically ripping off consumers by loading up huge administrative costs, outrageous profits and unfathomable executive salaries. For example, each of the last two CEOs for United Health Care have been paid over $1 billion dollars each. How can that possibly make any sense?

The ACA law has a simple, but effective provision. It says that if you are a health insurance company, and you don't use at least 80% of the premiums for actual health care services (85% for group policies), then you have to rebate that excess amount to your customers. Simple. You can have 20% in administration, marketing, executive compensation, and profits. That is enough. If a company can't be happy with that kind of profit margin, they they should look for another business to be in.

The simple solutions are often the best solutions. It worked. Starting about 6 months ago, people all over the country began receiving rebate checks because they had been overcharged and under-served.

For those who didn't vote for President Obama, I hope you can at least muster a "thank you". And for those who have bitched about this law without actually knowing what was in it, your apology will be generously received.

You're welcome.

[NoOneMan]

9. If this "works", shouldn't per capita costs go down?

Almost immediately....

[former-republican]

10. Maybe some members don't understand the definition

per capita adj. Latin for "by head," meaning to be determined by the number of people. To find the per capita cost, the total number of persons are added up and the bill, tax or benefits are divided equally among those persons.

[BlueStreak]

12. No. It addresses only the skimming and profiteering in the insurance sector

It does not address the abuses and waste in the delivery portion of our system.

I don't really understand what point you are trying to make. Surely you are not suggesting it is a bad thing to attack the profiteering in the insurance companies. Of course there are other problems that deserve attention as well, but you seem to be saying that if we don't cure all of the world's evils completely and instantaneously, then nothing is worth doing.

I disagree.

[NoOneMan]

13. Eliminating the "skimming and profiteering" produces no significant costs savings in itself?

That would lead me to conclude either:

1) That there was no significant "skimming and profiteering", thereby rendering this portion of the bill rather insignificant.

Or, more likely:

2) That it really doesn't eliminate anything, but rather just changes the nature of the "skimming and profiteering" (perhaps by standardizing and subsidizing it centrally).

[BlueStreak]

14. What part of $1.5 billion is hard to understand?

This is real money either rebated to consumers or realized through LOWER premiums. Yes, there is some game playing in shifting numbers to make overheads appear as if they were real medical services, but that is certainly not all of the $1,5 billion.

What is your point? Are you denying that insurance companies rebated any money to customers, as required under ACA?

It isn't as if they could pass the 80% number along to other customers. That 80% (85%) threshold applies to their entire base of customers. That is, after all, how insurance works. It is a pool of risk. If they charged too much, then the law made them give some of that back.

No, that will not necessarily result in lower per capita expenditures because pharmaceuticals are out of control, new devices are out of control, redundant tests are out of control. But to argue that it is a bad thing to make an improvement in one of the major areas seems pig-headed to me, especially when that one area contributes absolutely nothing to the actual process of health care. It is just paper pushing. We can tighten up on the abuses in the insurance industry without any risk of harming actual quality of care.

[NoOneMan]

15. What part of per capita health care costs don't you understand

If you take money from people and give it back, that isn't savings--it's a shell game.

If per capita health care costs continue to increase, any premium reductions or rebates will be offset by tax dollar spending in the form of subsidies that ultimately comes from the consumers anyway. Otherwise, you are using magic math that doesn't add up.

What is your point? Are you denying that insurance companies rebated any money to customers, as required under ACA

I am denying that the MLR actually reduces health care costs, and therefore, it doesn't save consumers any money (so the headline is deceptive). I actually do not fully know until the numbers are published but mid-year projections seem to confirm this. MLR merely standardizes the amount of "skimming" and provides a market incentive for insurers to increase payment schedules with providers (since their "cut" is fixed, the larger the payments, the more money they skim).

But to argue that it is a bad thing to make an improvement in one of the major areas seems pig-headed to...

Hang on there! No need for a strawman. Im not arguing that it is "bad" (other than the aforementioned market pressure to increase provider costs), but rather that its misunderstood and not really as "good" as it sounds.

Frankly, if it doesn't result in a shred of savings and institutionalizes for-profit paper-pushing, maybe its not the bad-ass holy grail the rebate-check waving masses are proclaiming it to be. Maybe its rather a clever shell game that makes these check wielding people happy to be getting screwed out of 20% of their health care purchasing power.

We can argue about its "goodness" and "badness" all day. Thankfully, we have the per capita health care costs statistics to tell everyone up front precisely what is happening to the system devoid of hubris and bias.

[BlueStreak]

16. Do you understand that insurance companies and hopspitals are two different things?

The ACA mostly dealt with the insurance problem.

I have already stipulated that there are cost control problems in all the other areas, so I see no point in any further debate on the subject.

I would prefer a single payer system, but we don't have that. I appreciate the improvements that the law is making to the insurance industry. We need to mobilize to address similar abuses in the pharmaceutical industry. We need to get reforms that deal with the escalating cost of medical devices and the wastes throughout our delivery system.

[NoOneMan]

17. I understand that

The ACA mostly dealt with the insurance problem.

I also understand that you have no finite cost metric to determine that the insurance problem was "taken care" of in terms of cost. Suggesting that it was in the face of contradictory evidence is purely dogmatic at this point.