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Now on to our top story you ready -- dig into your wallet.
You see it with a 50%.
Jump in your health care premiums thanks to -- -- a recent report shows that premiums will skyrocket a whopping -- 0% that's an average within five years they are already about three.
Thousand dollars higher than they were four years ago here with a prognosis.
Yeah.
-- today's money power panel doctor.
-- springs technologies Simon Rosenberg is former advisor to President Clinton and founder of the think tank new Democrat network and Doug Holtz deacon.
Is former director of the Congressional Budget Office and -- president of the American action forum welcome to all three of you back to show.
Thank you for joining us.
I this was pretty shocking.
They dug -- and said -- take a look at this and a lot of spots it's going up by more than 50%.
I've talked to folks already this year were complaining -- heard people in the elevator complaining that their paycheck authorities smaller because their health care premiums have gone up so much doctor Q let me start with deal.
Why is this happening so quickly.
Our a couple of reasons one is that insurers will be faced with this whole idea of community based rating and guaranteed issue.
So ahead of the storm they're gonna have to raise premiums in terms of making up for the lost revenue.
And that's a big component of that the second component is that.
The dynamics of Obama care have set in motion some element of consolidation.
Where insurance companies and hospitals have started to coalesce.
So that less choice.
Really means less competition.
And what that means is higher premiums in the individual market.
It really higher premiums ultimately for employers and yeah unfortunately decreased reimbursement for doctors.
-- -- mean it's easy to see that you say that everyone has to be covered we're not gonna charge more for pre existing conditions.
It it's gonna cost -- so the cost has go somewhere you can't charge the people -- using insurance you just spread across evenly to everyone.
So make sense to me that premiums would go up why are we seeing it now -- Win in theory obamacare doesn't go into effect until 2014.
Well -- I think what you're gonna see is up much bigger sticker shock in 2014.
But even now insurers are looking at they offerings are going to have for open or what periods in 2013.
They're gonna take place in 2014.
They're doing actuarial analysis.
-- trying to build reserves for the moments when suddenly they have to cover all these expensive preexisting conditions and but the reality is that given the additional benefits.
Insurance pool that's gonna have all these sick individuals and it.
There are some people just simply have to pick up the tab and are likely to be the younger and healthier who previously had pretty cheap insurance but -- -- gonna pay closer -- average.
Simon when you look across the country -- -- you -- pinpoint how it's going to impact each of us individually.
You look at states like New Jersey new York and Vermont where they already have laws in effect that are similar to obamacare and there.
You know premiums party about twice as high as the rest the country in some other states like.
Arizona Arkansas Georgia Idaho Iowa Missouri Ohio Oklahoma and and the list goes on.
They say that those rates are gonna go up somewhere between 65.
And a 100% according in this study that we were looking at.
How do you think that -- -- door.
Well I think first of all the good news and what's happened over the last few years is that we saw -- last year for example.
That health care costs overall -- went up 4% we now had three years in a -- mid single digit growth instead of the double digit growth in health care.
Expenditures that we are seeing year after year over the last generation so there's some evidence that the system is beginning to get costs under control.
Which will hopefully help keep these premiums down remember you said 50% over five years that's a 10%.
Increase over five years each year that's in line of premium increases over the last.
You know 1520 years so there's no actual significant increase what we've got to see what we don't know.
Is how the Obama reforms on the cost side.
Are gonna bring cost down as more people come into the system -- -- I disagree dug a little bit.
Is that there's going to be more unhealthy people in the system is going to be a lot more healthy people in the system bringing in more revenue -- for these insurance companies well also.
We've got to give this reform time I think and I think this report was a little bit alarmist.
And getting ahead of the actual experience.
People and businesses -- now.
We'll doctor.
As Simon said would you would you also agree immediate you seen cross -- between 65 to a 100%.
Over me.
-- five year period or even as we've seen 3000 dollars in the past four year period.
Is.
Is that sort of what we could expect under any framework whatsoever and and we should be okay without.
First of all I think to previous comments are completely false and we should stop convincing the American public about this charade that costs are actually gonna go down.
And it really irks me that we continue.
To try and convince them otherwise if in fact I don't cellular call go -- -- yeah.
-- -- -- -- -- -- -- -- -- -- OK but but -- but health care cost right now this whole idea that they've actually remained relatively flat.
Is a complete fallacy.
Let's have this conversation a year from now.
People couldn't afford in high deductible plans.
To either pay the co payment -- their fair share of what was required in order to keep their current coverage.
And so of course you're going to see medical trends flat because most people should have been accessing the system.
That didn't access the system okay yeah.
It's -- know there is no there is no.
Credible math that -- does the insurance underwriting and responded that.
On to say that I didn't say the cost has gone to hell I said that the last three years we started to see a flattening of costs for the first time in a generation.
And the second thing is we know that there are substantial.
It in innovations and incentives built into obamacare that hopefully over time are gonna work and actually continue to flatten the cost curve that's the whole intent.
Of obamacare I think it has an -- been implemented yet it's not fair to.
Criticizing yeah Italian so he doesn't get ignored here at the CEO that's.
-- that a country's third largest health insurance.
He is that that country's third largest health and -- broke the finals on December 12 when he said we are going to see some markets insurance premiums go up by a 100%.
Do you think that some it's not in his interest to see this -- -- and that's why I'm highlighting this sick do you have are used startled by this -- Now I'm not a bad start -- the map and even -- on the a couple of fronts first Simon's right that.
National health care costs have slowed their growth I'm not optimistic that'll stick it happened in the late ninety's -- away.
And when you covers many people as we're going to.
Everyone has insurance buys a third more than they did before so this will be a lot of demand.
And we're gonna see cost go up second piece is if you do the actuarial math.
You have to charge some people -- lot of money to make this go and they are as I said before often young.
Often relatively healthy and that's going to be big sticker shock for these people.
There's a third piece which is once it happens -- those premium increases stick that's about business models will -- But their -- as a going proposition you're gonna raise rates -- get we gotta go guys I am so sorry we're out of time.
