2013
Before you read the following excerpt from a NYT article I want you to go to each of your doctors and ask him or her if they are now being paid by your insurance using a valued-based system. Ask them if they participate in an Accountable Care Organization and if that has changed the way they practice medicine. Ask them if their fees from insurance companies are less than they were in 2010.
The point is that some economists, including the one below, claim Obamacare is already having the effect of slowing the growth of health care for employers. I say that is pure nonsense. First, the health care system does not change that rapidly, if it’s going to change at all. Second, it is likely that modest gains if there were any at this point, are offset by the new mandates and fees on employers and insurance companies, the expanded benefits and the greatly increased administrative expense that does not show up in premiums.
Next please focus on the text below I placed in bold. Think about your health benefits at work. Has your deductible increased in recent years, are your out-of-pocket costs higher? Has your choice of providers been limited? Have you been offered that great deal known as a health savings account (HSA)? Has your employer repeatedly told you that health care costs are a problem? Do you think your employer is providing you overly generous health benefits just to be nice? I’m betting the answers are , YES, YES, YES, YES, YES and absolutely NO!
So, do you think a new Cadillac tax on expensive health plans come 2018 is reducing spending growth? Oh, I meant for you. By the way, did you know that unions were able to have many of their jobs exempt from the limits of the new tax … to preserve generous and costly benefits.
Economists may be united, but do they have a clue what has been going on in the real world for the last decade, long before the Affordable Care Act was a factor in anything? Employers didn’t need Obamacare to show them how to reduce their costs.
How the Affordable Care Act will affect employer spending on health care.
The fundamental question about the Affordable Care Act is thus what it will do to employer spending on health insurance. The act has a number of provisions designed to reduce spending growth. These include the “Cadillac tax” on expensive health insurance plans and a transition of medical care payments away from fee-for-service payment into value-based payments. Economists are virtually united in asserting that a combination of these demand and supply-side levers are the way to get a handle on a wasteful system.
Already, these payment transitions seem to be having an effect. Health care cost increases are at the lowest level in the last half-century, and employer premium growth has slowed markedly. My own work with Nikhil Sahni shows that the Affordable Care Act is one factor in this slowdown.
August 7, 2013, 11:00 am
The Economics of the Affordable Care Act
By DAVID M. CUTLER
David Cutler is Otto Eckstein Professor of Applied Economics at Harvard University. He served as senior health care adviser to the Obama presidential campaign in 2008.
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One more thing for you to consider; the experts forget to tell you that when benefits are cut to avoid paying that Cadillac tax, you lose! In addition, many economists believe that when your benefits are cut, your employer will make up at least part of the difference by giving you a raise. Good luck with that.
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