Thursday, June 7, 2012

Obamacare Raising Premiums in Myriad Ways

This morning, the New York Times reported on a plan by NYU Medical Center to merge with Continuum Health Partners, which runs Beth Israel and several other hospitals in Manhattan.  Perhaps unsurprisingly, the article makes clear that Obamacare is the cause of the merger, and higher premiums are likely to be the effect:

It would create one of the largest health care systems in the city, one that would have immense market power under the new federal health care system, and put pressure on independent medical practices, insurance companies and even rival medical schools, which may have to find other places to train their students….By strengthening its competitive advantage, a merged hospital system could limit options for patients and charge more for services, advocates fear.  It would also have more power to negotiate higher rates with insurance companies, which might be passed on to consumers in the form of higher premiums.

As we’ve previously noted, the law has prompted numerous hospitals and medical providers to combine, in the hopes that consolidation will allow them to charge insurance companies more for medical services.  By both encouraging provider consolidation and discouraging consumer-oriented incentives, Obamacare creates the perfect ingredients for insurance premiums to rise still higher.  And not even the New York Times can deny that fact.