McCaughey: The Truth About Premium Hikes

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Surge in Costs Start Of Obamacare Disaster


September 29, 2011


A new report claims that Obamacare is only negligibly responsible for the surge in health insurance premiums this year, but former New York Lt. Gov. and healthcare expert Betsy McCaughey says its provisions do come with a steep price and there is “no tooth fairy.”

The survey of private and public employers conducted by the Henry J. Kaiser Family Foundation disclosed that the average cost of a family policy climbed 9 percent to $15,073 in 2011, the largest increase since 2005. Premiums for single coverage rose 8 percent.

The group’s findings also showed that health insurance is consuming a bigger share of employer costs, forcing many companies to eliminate pay raises and pass on more medical costs to workers.

Drew Altman, chief executive officer of the Kaiser Family Foundation, asserted that the healthcare reform bill enacted last year accounts for just 1 to 2 percentage points of the premium increases in 2011.

But McCaughey told Newsmax: “The early provisions of the Obama health law are bending the cost curve up, the opposite direction from what the president promised. The new rules – young adults on parents’ plans, no annual caps on benefits, and no copays for preventive care – are not free. They add to the premium. There is no tooth fairy.”

McCaughey, a Newsmax contributor, served as lieutenant governor of the Empire State under Gov. George Pataki from 1995 to 1998. She is a patient advocate and founder of the Committee to Reduce Infection Deaths, and president of Defend Your Healthcare. She came to national attention in 1993 for her attack on the Clinton healthcare plan and was considered a major factor in the defeat of the bill.

She predicted that Obamacare will lead to even larger increases in insurance premiums in the near future.

“There are bigger premium hikes ahead in 2014,” she said, explaining that “1,472 employers and unions got waivers from the current coverage requirements because they couldn’t afford them. But in 2014, the waivers expire and mid- and large-size employers will be required to provide the ‘essential benefit package’ or pay a $2,000 fine – a mere pittance compared with the cost of that package.

“That’s why McKinsey & Co. found that as many as 50 percent of large employers surveyed are considering dropping coverage in 2014. If that happens, middle and high earners will be forced into the exchanges, and lower income workers will be forced onto Medicaid.”

This year’s premium hikes also result because more people have lost their jobs or part of their income and now qualify for Medicaid, “the government program that shortchanges hospitals and doctors,” McCaughey noted.

“Medicaid pays about 86 cents for every dollar of care. Doctors and hospitals make it up by charging privately insured patients more, pushing up premiums.”

She added: “The impact of Medicaid cost shifting on employer-paid premiums will be far larger in years ahead. The Obama health law will expand Medicaid enrollment by at least one third in 2014. The president promised to solve the problem of the uninsured by making health plans affordable, but in fact, at least two thirds of the currently uninsured will be put on Medicaid in 2014.

“Much of the cost of that Medicaid expansion will be shifted to private health premiums.”

Premiums are also expected to be pushed higher by the rising cost of healthcare in the United States. The average American now accounts for about $7,538 a year in medical costs, including out-of-pocket expenses, according to the Organization for Economic Cooperation and Development.

The average cost per person in industrialized countries including the U.K., Norway and Switzerland is $2,995.

McCaughey, Ph.D., is a former lieutenant governor of New York state and author of “The Obama Health Law: What it Says and How to Overturn It.”


For more information, visit Defend Your Healthcare.
Bazzo 09/29/11
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