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Massachusetts firms canceling health coverage due to rising costs

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From the Boston Globe. (H/T ECM)

Excerpt:

The relentlessly rising cost of health insurance is prompting some small Massachusetts companies to drop coverage for their workers and encourage them to sign up for state-subsidized care instead, a trend that, some analysts say, could eventually weigh heavily on the state’s already-stressed budget.

Since April 1, the date many insurance contracts are renewed for small businesses, the owners of about 90 small companies terminated their insurance plans with Braintree-based broker Jeff Rich and indicated in a follow-up survey that they were relying on publicly-funded insurance for their employees.

In Sandwich, business consultant Bill Fields said he has been hired by small businesses to enroll about 400 workers in state-subsidized care since April, because the company owners said they could no longer afford to provide coverage. Fields said that is by far the largest number he has handled in such a short time.

“They are giving up out of frustration,’’ Fields said of the employers. “Most of them are very compassionate but they simply can’t afford health insurance any more.’’

[…]The Massachusetts Division of Health Care Finance and Policy annually surveys employers and found no significant drop in coverage as of the end of 2009, when more than three-quarters of companies offered health insurance.

But insurance brokers say the pace of terminations has picked up considerably since then among small companies, of which there are thousands in Massachusetts. Many of these companies — restaurants, day-care centers, hair salons, and retail shops — typically pay such low wages that their workers qualify for state-subsidized health insurance when their employers drop their plans.

“Those employers are trying to keep their doors open, and to the extent they can cut expenses, they will cut health insurance because they know their people can go to Commonwealth Care,’’ said Mark Gaunya, president of the Massachusetts Association of Health Underwriters, a trade group representing more than 1,000 brokers and other insurance professionals.

Remember, Obamacare is patterned after these state-run health care plans from Massachusetts and Tennessee. These plans try to cover more people, which increases demand. But supply is the same. What results is a shortage. Prices rise. And when prices price, employers can no longer afford to pay for health care coverage for their employees. You can’t keep your health care plan when the state takes over health care. They are going to have to cut costs and you are going to have your coverage limited.

Here’s what the ultra-left-wing New York Times has to say about the move by companies to reduce health care choices and cut costs.

Excerpt:

As the Obama administration begins to enact the new national health care law, the country’s biggest insurers are promoting affordable plans with reduced premiums that require participants to use a narrower selection of doctors or hospitals.

The plans, being tested in places like San Diego, New York and Chicago, are likely to appeal especially to small businesses that already provide insurance to their employees, but are concerned about the ever-spiraling cost of coverage.

But large employers, as well, are starting to show some interest, and insurers and consultants expect that, over time, businesses of all sizes will gravitate toward these plans in an effort to cut costs.

The tradeoff, they say, is that more Americans will be asked to pay higher prices for the privilege of choosing or keeping their own doctors if they are outside the new networks. That could come as a surprise to many who remember the repeated assurances from President Obama and other officials that consumers would retain a variety of health-care choices.

[…]But choice — or at least choice that will not cost you — is likely to be increasingly scarce as health insurers and employers scramble to find ways of keep premiums from becoming unaffordable. Aetna, Cigna, the UnitedHealth Group and WellPoint are all trying out plans with limited networks.

The size of these networks is typically much smaller than traditional plans. In New York, for example, Aetna offers a narrow-network plan that has about half the doctors and two-thirds of the hospitals the insurer typically offers. People enrolled in this plan are covered only if they go to a doctor or hospital within the network, but insurers are also experimenting with plans that allow a patient to see someone outside the network but pay much more than they would in a traditional plan offering out-of-network benefits.

It’s happening, folks. The only choice that liberals want you to have is the choice to kill unborn babies and to marry anyone or anything you want. They don’t want you to have a choice to keep the money you earn, or to spend the money you earn on whatever you want. You can’t buy health care products and services unless they allow you to buy health care products and services. They believe that the economy works better when you spread the wealth around.

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MUST-READ: New York Times critiques socialized medicine

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Ed Morrissey links to this New York Times article from Hot Air.

Excerpt:

New York’s insurance system has been a working laboratory for the core provision of the new federal health care law — insurance even for those who are already sick and facing huge medical bills — and an expensive lesson in unplanned consequences.

[…]The problem stems in part from the state’s high medical costs and in part from its stringent requirements for insurance companies in the individual and small group market. In 1993, motivated by stories of suffering AIDS patients, the state became one of the first to require insurers to extend individual or small group coverage to anyone with pre-existing illnesses.

New York also became one of the few states that require insurers within each region of the state to charge the same rates for the same benefits, regardless of whether people are old or young, male or female, smokers or nonsmokers, high risk or low risk.

Healthy people, in effect, began to subsidize people who needed more health care. The healthier customers soon discovered that the high premiums were not worth it and dropped out of the plans. The pool of insured people shrank to the point where many of them had high health care needs. Without healthier people to spread the risk, their premiums skyrocketed, a phenomenon known in the trade as the “adverse selection death spiral.”

Obama plans to get around the problem of healthy young people opting out of paying for other people’s health care by fining them.

The new federal health care law tries to avoid the death spiral by requiring everyone to have insurance and penalizing those who do not, as well as offering subsidies to low-income customers.

[…]Under the federal law, those who refuse coverage will have to pay an annual penalty of $695 per person, up to $2,085 per family, or 2.5 percent of their household income, whichever is greater. The penalty will be phased in from 2014 to 2016.

How does this reduce health care costs? It doesn’t. But it does explain why we have so many uninsured in this country – they don’t buy insurance because government regulations requiring mandatory coverages have made it a bad deal for them. Young men don’t need to pay for in vitro fertilization and sex changes. They don’t use it, so why should they agree to pay for other people’s problems? They have their own lives to live.

Ed Morrissey explains:

If nothing else, this proves a couple of points that critics have made all along.  The mandates are nothing more than a way to get the young to create a proxy welfare state by forcing them into a usurious insurance model.  It does nothing to reduce actual costs, and in fact makes cost increases both more likely and more amplified.

Now you understand socialized medicine. The left plays on people’s fears and insecurities in order to gain control of the economy. They promise to take care of people, so that people can stop worrying about taking responsibility for their own choices. Once the leftists are elected, they take money from the young people who don’t understand what is happening to them, and they give it away to special interests in order to buy votes.

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How Obamacare took away my liberty

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From Health Care BS. (H/T ECM)

Excerpt:

1. Don’t need or want a health insurance policy? Sorry, the individual mandate makes it a federal crime not to buy insurance.

2. Want to pay less in premiums by buying health insurance coverage with limits on coverage? Sorry, Obamacare also dictates how much coverage you must buy (including maternity coverage if you are a single male).

4. As an employer, you’d like to offer your employees high-deductible coverage or policies that don’t cover “children” as old as age 26? Sorry, that’s now illegal.

5. As a business-owner with 100 employees, you want to expand your sales and hire a few more people? Sorry, if you hire one more person, Obamacare requires you to buy insurance for all your employees.

6. You’re a physician and don’t want the government looking over your shoulder? Sorry, the HHS is now authorized to use your claims data to measure the resources you use.

Taking money from small businesses? That reduces the supply of jobs. Making doctors jump through hoops? That reduces the supply of doctors.

From Carrie Lukas at National Review. (H/T ECM)

Excerpt:

Last night, Speaker Pelosi reiterated that passing the health-care legislation means that “Being a woman will no longer be a pre-existing medical condition.” It’s true that outlawing gender ratings will effectively shift women’s health costs to men (which means young men will see their health-insurance premiums rise disproportionately). Yet the Senate bill makes being a single mom a new kind of pre-existing condition: Instead of higher insurance premiums, these women will have fewer employment opportunities. Congratulations Mrs. Speaker.

What happens when you take money away from healthy single men? They don’t marry because they can’t afford to become husbands and fathers. Government replaces men as husbands and fathers. That’s what this health care bill does.