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March 14, 2011 / Political Fluency

Silly Kathy, Healthcare Reform is for Kids

“Just 12 months after the Patient Protection and Affordable Care Act became law, the American people are enjoying new protections, greater freedoms and lower costs.”

And so begins an Editorial by Health and Human Services Secretary Kathleen Sebelius. Secretary Sebelius’ main job is very different from prior HHS Secretaries who were responsible for broad health policy. Under the new Obamacare law, Sebelius essentially became the “czar” of massive government regulation of the American health care system.

As a consultant in the health care industry, I can say with certainty that the only part of the present-tense sentence above that could even be remotely argued to be true are the “new protections.” The law provides no greater freedom – like most laws it demands compulsory action from citizens. This goes beyond the individual mandate that will force all Americans to purchase health insurance coverage and is the most unpopular aspect of the law. This curtailing of freedom applies to employers who provide medical insurance to their workers and to health insurers who now must cover procedures and patients that may not have been covered before.

As for lowering costs, the editor of this Op-Ed must have taken out the “LOL” that followed that claim. Just this past year, all health insurance policies that renew after September 23, 2010 were mandated to cover dependent children up to their 26th birthday. Most employers covered dependent children to age 19 or age 23 if the child was in school. Health insurance carriers charged their client companies anywhere from 1-3% in addition to the annual renewal increase that has historically been triple the rate of CPI for over a decade. It’s one thing to claim Obamacare will lower costs in the long run, but it has irrefutably increased costs in the short-term.

Increasing the age of coverage to 25 for all dependent children is obviously an expansion of coverage. And this is the second major problem America has with the law, but it’s a more intuitive one.

The new health care reform law promised to lower health care costs nationwide while expanding coverage. That doesn’t make sense to anyone with even a rudimentary understanding of social policy. If coverage is expanded to 25 year-old dependents who were not covered last year, then those 25 year-olds are no longer priced out because they are covered this year. This increases the Demand for health care while the Supply of doctors and facilities remains the same. This leads to a price increase as the Supply is strained under the weight of increased Demand.

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