Monday, April 19, 2010

The Future of Health Care Cost Control

In spite of all the fanfare about lowering the cost of health insurance, Obamacare does just the opposite.

Premiums will rise and do so in dramatic fashion.

Even worse, it does nothing to lower the cost of health care which is the driving force behind 85% of premiums.

Well, there was the scheduled 21% reduction in payments to Medicare providers but that was quickly wiped out when Obama signed the recent extension of unemployment benefits. That bill restored the cut that went into effect on April 1 which means the cost of Medicare will continue to rise and payouts will exceed Medicare tax collections.

Romneycare is the model for Obamacare. So how well is Romneycare working?

Not so well.

The folks at have been a great source of how Romneycare is really working, and Prof. Stern likes to make sure I don't miss the latest news.

So how is Massachusetts going to make Romneycare more affordable?

By making sure policyholders don't use the higher priced hospitals . . .

Health insurers are starting to sell policies that largely bar consumers from receiving medical care at popular but expensive hospitals such as Massachusetts General and Brigham and Women’s — a once radical idea that is gaining traction as a way to control soaring health care costs.

Governor Deval Patrick and Senate President Therese Murray have included such restricted provider networks in their recent legislative proposals to control rising insurance rates. And the state this month began offering limited-network plans to 300,000 state employees, retirees, and their families, promising 20 percent discounts on premiums if they are willing to give up access to some of the Boston area’s most renowned hospitals.

The federal government seeks to control the cost of health care by paying medical providers less than a market rate.

The keepers of the Romneycare flame lower the cost of health care by limiting your choice of providers.

Kind of makes you wonder if the folks in Washington think this is a good idea and will incorporate it into Obamacare.

Smaller cars, fewer health care choices, Poppa Washington.
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