Watch Insurance Premiums Soar

Enactment of ObamaCare will open the floodgates for new federal mandates that insurers cover expensive wellness and alternative care services and send health insurance premiums soaring. While the New England Journal of Medicine says 50% of physicians will leave medicine because of ObamaCare, it’s more likely that the number of practicing physicians will shrink by 10% to 15% over the next five years. This will force Congress to boost payments to physicians to keep them in Medicine and to get them to accept more Medicaid and Medicare benefiaries. So taxes and Medicare premiums will rise even faster. ObamaCare encourages more people and employers to drop health insurance and game the system. Therefore, we’ll see as many uninsured Americans citizens who aren’t covered by various government programs as we see now. But they may be the higher-income folks who are smart enough to game the system.

Meanwhile, the hospitals who think that they will be the biggest winners because there will be fewer uninsured and few patients whose bills won’t be covered by the government will wind up the big losers. State and federal legislators will tax the not-for-profits and cut margins for the investor-owned hospitals to the bone. Long-run, they’ll lose physicians and money. Same for drug companies. Now that politicians control health insurance companies and markets more than ever, they’ll use the insurers and various forms of price and utilization controls to make the pharmas unprofitable.

Democrats who lose their seats in November will become rich lobbyists until Republicans take power and put them out of business.

People Who Are Smart About Money Won’t Buy Health Insurance Until They Get Sick

ObamaCare will give working Americans who are smart about money strong financial incentives to become and stay uninsured until they need catastrophically expensive health care. If they recover and no longer need insurance, they’ll drop it until the next time. The number of people who can afford to buy health insurance today but don’t is about 15 million. In five years, it could be several multiples of that.

Economists are just figuring it out here and here. Even liberal bloggers are getting it.

Don Johnson blogs at The Business Word Inc. Between 1976 and 1986 he was editor of Modern Healthcare magazine. As its top editor, Don helped build Modern Healthcare, a Crain Communications Inc. publication, into the hospital industry’s leading business magazine and one of the top magazines in the country.

22 replies »

  1. “People Who Are Smart About Money Won’t Buy Health Insurance Until They Get Sick” yes, you are right. And those people understand the importance of health insurance when they lose their health.

  2. While premium may soar, a very useful outcome will be the closing of the loophole that let near seniors and very sick onto streets and lobby of SSA.
    That was an easy exit. Hopefully, Republicans will take it further and reduce cost of care, thereby reducing premiums.

  3. Even if only 10% of physicians leave the field en masse in the next 3 years, that will have an impact.
    Re Mark Spohr’s comment, you just wait until you are sick to then buy health care insurance. That is assuming you will have the income stream to afford it!
    And why is everyone ignoring the plain FACT that Obama and those involved in crafting this legislation are exempt from participating in it? The Senate was so quick to reject the admendment adding everyone to be a participant? Speaks volumes to me.
    But, hey, defenders and apologists have to spew their failed rhetoric to confuse and abuse, eh?

  4. It’s always in the footnotes to the proforma. Way too many movings parts to make this unidimensional forecast. What if physicians actually step up and lead?
    What if patients are actually empowered by health 2.0 technologies?
    What if we actually leverage best practices, proven integrated delivery system models or the quality and efficieny promise of EHRs/PHRs and connected medical communities?
    No, the label here, ‘Obamacare’ says it all.
    See: A Physician Call to Action: ‘Stop Whining & Lead’ http://2healthguru.wordpress.com/2010/04/09/a-physician-call-to-action-stop-whining-lead/

  5. Don wrote: “….the New England Journal of Medicine says 50% of physicians will leave medicine because of ObamaCare….”
    Pssst – Don – there’s this thing called the internet that allows practically anyone to check the veracity of such eye-catching assertions.
    Run your search here using, y’know, NEJM.org’s search utility. Naturally, no phrase so obtuse as “50% of physicians will leave medicine because of ObamaCare” shows up in NEJM’s archive. But try – try hard – to find any NEJM story Don could actually be referencing with this “truthy” reference. No luck? Imagine that.
    Turns out this “fact” is an hallucination propagated mainly, it appears, by that paragon of fair and unbalanced statesmanship, Minnesota Congressperson Michelle Bachmann.
    Michelle Bachmann, Don? Really? That‘s what you’ve got? Jeez, our boy Nate is more careful with his facts that you.

  6. “Human sacrifice, dogs and cats living together… mass
    hysteria! …”
    How about something with a bit more substance instead of just what is mainly a partisan rant that is almost devoid any substantial facts or comparisons. More than willing to read something at AEI or CATO if it has some numbers/reasoning behind it. This fight into the “partisan hackery” commentary bin though.

  7. “Whether 10% or 50%, I think it is excellent that physicians whose primary career motivation is money will be moving on to something that suits them better.”
    I agree. Also there will never be a lack of supply of competent physicians. Of course the features of the recent law are not going to make the administrative hassles of the physician or for the patient for that matter any better, but that might come with improvements through further legislation. Unlikely that will happen, but it could.

  8. Donald
    If you’d managed to contain your partisanship for more than three words I might have more respect for your perspective.
    My conclusion:
    Bile is better contained in the body than posted.

  9. Good points and an accurate view of the various incentives in the current legislation.
    I am 62, unemployed, and in good health. I recently looked into buying a ‘catastrophic’ insurance plan ($5000 deductible) which would cost $8000 a year for me and my wife.
    Why should I spend $8000 for insurance that I won’t use and will cost me another $5000 before it pays for anything?
    I like the new legislation. I can wait until I get sick to buy insurance. After age 65, I’ll have Medicare.
    The Republicans did me a favor by opposing universal health care. I would have been happy to pay for universal care but I like this free market approach. I only have to pay for health care and insurance if I need it.

  10. “if someone gets solid C’s in medical school they are less likely to be able to solve the puzzle of how to make a patient better. Be careful what you wish for…”
    I didn’t know docs posted their test scores with their graduation certificate. That would be nice, then maybe we could get a discount from the “C” docs. Dr. Weinstein, should we pay “C” docs less?

  11. Dr. Weinstein: Your point is well taken. Years ago I came across a doctor in another city who was already fed up and saw what was coming. He refused insurance, had a diagnostic imaging clinic, and charged 1/4 of the cost for a pelvic ultrasound as compared to our local imaging center. I went out of town for his services.
    I was trying to communicate that I don’t want a doctor who gets straight C’s, because to me that means he is in the wrong profession. And running up a $300,000 debt is the height of foolishness, and that kind of thing is at the root of the problem. Though I certainly understand that we are trained to think that is the way it must be done. I flunked the training.
    ExhaustedMD: I want to get what I pay for from whomever I am paying, and I am not at all suggesting that doctors work for free. There is much more to this system than doctors, who should be well paid. Plumbers, accountants and lawyers are no threat to my financial well-being as they provide a specific service and deliver the product I am paying for. I will not be losing everything we have worked for to them, but the medical system is the primary threat to our financial security. There is no limit to the extortion the citizenry suffers when the message is, your money or your life. And there are many more involved in delivering that message than the doctor.

  12. Don,
    You say,
    “ObamaCare encourages more people and employers to drop health insurance and game the system”
    and again
    “ObamaCare will give working Americans who are smart about money strong financial incentives to become and stay uninsured until they need catastrophically expensive health care”
    but don’t explain why or how ? Please elaborate ..

  13. Thank you Rush Limbaugh for that predictable tirade. This bill is far from perfect, but healthcare was decaying and capitalism was not fixing it. When a few corporations become too strong, such as the insurance industries, its much the same as socialism in that the common man loses out, and has zero choice in the matter with no opt out. I would be angry too if the pharma companies and insurance companies were not pocketing more and more money while claiming higher costs and increasing premiums. Even “non-profits” in healthcare often have outrageous salaries and bonuses paid to executives that are unjustified.

  14. Another example of the rationalization of the coming enslavement of physicians, and, to paraphrase the Dana Carvey skits of the 80’s of the old guys who had it so bad, “why did we do it, because WE LIKED IT!”
    And yet it is never a physician who preaches this vow of poverty, eh? Man, my mentors in med school were so on the mark: every one is a gd doctor until the stool hits the fan, and then the charalatans are out the door at breakneck speed, leaving patient and true physician to be crapped on.
    It is just incredible to read all these defenders and apologists of legislation that redefines abomination. Well, I ain’t gonna shut up and let the masses be indoctrinated with the ongoing “tell the lies enough and they will become truths”. This post is on the mark, and the thread will reveal who is paying attention, and who is just being paid off!
    Hey Yana, you get what you pay for, even in the profession of health care. You pay nothing, and you have a doctor who is either enslaved and resents it, or, he ain’t a good doctor to work for free.
    I guess your plumber, accountant, and lawyer do pro bono work for you too?

  15. I always chuckle when I read that 50% of physicians will leave medicine for any reason. Unless they are at/near retirement, what are they going to do…sell life insurance? There may be some attrition but based on conversations with those now applying to medical schools, competition to get in is as keen as ever. There is no lack of bright people who want to be MDs. So, while I agree with the major point, that the cost of insurance policies will go through the roof (which may be part of the bigger plot to get to a single payor system) there will be no empty slots in medical schools and no mass exodus of 40-55 year old physicians.
    Yana: If your practice of medicine becomes one big headache after another, with interference by insurance companies, Medicare audits, rising costs, diminishing reimbursements, and disappearing autonomy, at some point even the most well-intentioned physician gets fed up. It doesn’t mean that money was their primary motivation. It is silly to think that. And if you run up a $300,000 tab to become a doctor and then the federal government pulls the rug out from under you, vastly diminishing your ability to repay your loans, how would you feel? Lastly, if someone gets solid C’s in medical school they are less likely to be able to solve the puzzle of how to make a patient better. Be careful what you wish for…

  16. Enough already with the predictions from both sides – one side overly optimistic, the other overly pessimistic.The truth is, no one knows exactly what will happen, and there undoubtedly will be unintended consequences in both directions. So what’s the point guys – just competing to say “I told you so” in 10 years – if you’re still alive?
    So let’s just get busy with the work of improving health care delivery on our own, shall we? We’re wasting time with the predictions by the “pundits”.

  17. Whether 10% or 50%, I think it is excellent that physicians whose primary career motivation is money will be moving on to something that suits them better. I want a doctor who is fascinated by the science of medicine, and who has the instincts to be a good diagnostician. The kind of doctor I want is interested in what makes his patient tick and in solving puzzles that are of far less interest to those who chose the career based on projected earnings and their ability to get C’s in school.
    People who are smart about money do not purchase health insurance *now*, because they know what is going on and want value for the dollar.
    And I do know of a doctor who confided with her patient that she would leave her practice if health care reform were to pass. I feel very lucky that I have never personally encountered her for medical care.

  18. This posting works for me! Just wait for the rush of apologists and defenders to attack this! Because, it is not what is right for the public, it is what is right for the party.
    And what kind of party will you democrats be having in November? It’s called a wake, and the problem is, the replacements ain’t any better.
    The first tuesday in November will be known hereon as Black Tuesday, because it will be the day americans realize they really don’t have much choice who “represents” them anymore.
    It’s the Republocratic Party, and their emblem is the bird. No, not the eagle, just a hand holding up the middle finger. And, it’s pointed at you, America!