It seems that health insurance companies, among other healthcare providers, are going to voluntarily slow their increases 1.5% over the next 10 years in order to allow President Obama’s health care plan to grow into fruition.
From SFGate:
Hospitals, insurance companies, drug makers and doctors planned to tell Obama on Monday they’ll voluntarily slow their rate increases in coming years in a move that government economists say would create breathing room to help provide health insurance to an estimated 50 million Americans who now go without it…A reduction of 1.5 percentage points a year in the rate of increase in costs may not sound like much, but administration officials said it amounts to slowing the current 7 percent annual increase in costs by about one-fifth. That’s significant when health care spending keeps running far ahead of inflation year after year.
They estimated, for instance, that five years from now, such private cost curbs could save a family of four an average of $2,500 a year in health care costs.
Additonally, although large companies won’t see much of a difference, smaller companies and the self-employed would have another option.
[They] would be able to get coverage through a new kind of insurance purchasing pool. Called an “exchange,” the pool would offer stable rates and predictable benefits. Plans in the exchange wouldn’t be able to deny coverage to those who are sick and would have to follow other new consumer protection rules.”
The companies involved are the American Medical Association, the American Hospital Association, the Service Employees International Union, the California Hospital Association and the Greater New York Hospital Association.
Now before we fall over ourselves in gratitude for this incredibly altruistic and generous act, we should keep in mind what the true motivation is:
The industry groups are trying to get on the administration bandwagon for expanded coverage now in the hope they can steer Congress away from legislation that would restrict their profitability in future years.
Insurers, for example, want to avoid the creation of a government health plan that would directly compete with them to enroll middle-class workers and their families. Drug makers worry that in the future, new medications might have to pass a cost-benefit test before they can win approval. And hospitals and doctors are concerned the government could dictate what they get paid to care for any patient, not only the elderly and the poor.
Obama has courted industry and provider groups, inviting their representatives to the White House. There’s a sense among some of the groups that now may be the best time to act before public opinion, fueled by anger over costs, turns against them.
Well, duh.