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0 pointskobeya9y ago0 comments

There is basically no real cost control in the bill, with the logical consequence being that insurance companies will do what they can get away with to raise premiums so that the new premium rate minus subsidies equals the old premium rate. The extra requirements of the ACA, and the lack of universal roll-out basically ensures that there are plenty of excuses for doing so.

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6 comments · 2 top-level

nradov9y ago· 4 in thread

False. The ACA imposed a minimum 80-85% medical loss ratio on insurance companies. This is a cost control.

https://www.cms.gov/CCIIO/Programs-and-Initiatives/Health-In...

But there aren't any real cost controls on providers, drug companies, medical device companies, and other suppliers.

koolba9y ago

> False. The ACA imposed a minimum 80-85% medical loss ratio on insurance companies. This is a cost control.

That's not a cost control. That's a price inflater!

If the only way for them to make more money is to have the price of things go up, what do you expect they're going to be in favor of? In a perfect world (from the perspective of the insurance company), everything from premiums to procedures goes up X% so that their profits go up X%.

That's a seriously messed up system and may be the most egregious part of the entire ACA.

nradov9y ago

Insurers have to compete against other insurers on price. Otherwise they lose market share. All of them negotiate hard with providers to drive down prices.

neaden9y ago

But total medical spending growth slowed, which seems to indicate that this price inflation didn't happen.

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kobeyaOP9y ago

> But there aren't any real cost controls on providers, drug companies, medical device companies, and other suppliers.

That's what I said.

kmkemp9y ago

The creation of exchanges was so that insurance companies would have to compete in a market where customers had an apples to apples comparison tool. Theoretically, that should drive down rates in places where there are enough insurance companies for market forces to take over.

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