The health care legislation passed back in March was monumental for a variety of reasons. For example, it was a long time in the making and was finally pushed through against the will of an entire political party; its breadth and cost are unprecedented; and after five months, the legislation is perhaps more unpopular than when it passed.   Apparently for good measure.

As the OC Register writes:

Obamacare was conceived around three goals: 1) providing health insurance coverage for all Americans, 2) reducing insurance costs for individuals, businesses and government, and 3) increasing the quality of health care and the value received for each dollar of health care spending…Just over 100 days after the law was signed, the evidence shows it is failing on each and every one of those goals.

The legislation does approach the first goal by expanding health coverage to millions more Americans, but this coverage is due primarily to the expansion of government subsidies and Medicaid.  Increases in private coverage will be shaky at best, and approximately 20 million Americans are still expected to be uninsured in 2019.

Things are even more daunting in terms of controlling costs and increasing the quality and value of our health care.  According to the OC Register, “The administration’s own chief health care actuary reports that the law will actually increase U.S. health care spending.”  ObamaCare is conservatively estimated to increase costs by $2.7 trillion over its first ten years, a scary number given our country’s already overextended deficits.  And these costs will be passed down to consumers, with average price increases for individual insurance plans estimated to rise between 13 and 17 percent.

On top of that, many Americans won’t be able to keep their insurance plans at all.  Thousands of businesses may drop their insurance plans and instead pay fines expected to be significantly less than the cost of insuring workers.

Do the math, and it just doesn’t add up.  Increasing the number of insured Americans is a good thing, but at what cost?  This expansive legislation favors draconian government intervention that kills consumer choice.  And ultimately, consumer choice, more than government-imposed mandates, keeps quality up and costs down.

The health care legislation passed earlier this year will have a variety of effects, some starting this year and others rolling out through 2014.  One of the most noteworthy elements under the ObamaCare umbrella is the requirement that health insurance companies meet a specific “medical loss ratio.” This rule mandates that health insurance plans split the dollars they receive from insurance premiums into two categories.  According to the Wall Street Journal:

Depending on the type of insurance coverage, 80% to 85% of premiums must be spent on either medical services or “activities that improve health care quality.” This bucket includes everything from doctor visits, hospital stays and surgery to prescription drugs and medical equipment. It also includes programs to help patients cope with chronic diseases and reminders to take prescribed medications. The remaining 15% to 20% of premiums falls into a smaller bucket of “administrative” expenses like overhead, marketing, profits, compensation and agent commissions.

The ability of the government to dictate which activities fall into which category is an indirect way to cap insurer’s profits, but more than this misuse of government power, it has frightening implications for patients as well.  In order to meet federal requirements, health insurance companies will be forced to cut back on “administrative” tasks like working with doctors to reduce certain unnecessary tests, of which too many can be dangerous, and preventing fraud, which protects patients’ private information.

If crucial services like these are considered to be administrative expenses by regulators, even though they significantly improve quality of health care and lower costs, then health plans will lose their incentives to invest in and engage in these essential programs. As a result, costs will continue to rise, and the quality of health care will fall as health insurers struggle to stay afloat.

The article closes by noting: “Bureaucrats now have the power to force private health plans to make business decisions based on regulations rather than on what is best for company or customer health. This kind of governmental micromanaging of health care—seen nowhere else in our business sector—is anathema to the free market.  More importantly, it endangers the lives and well-being of millions of Americans.”