Buried lede: ProPublica admits Obamacare the culprit driving insurance costs sky-high

ProPublica, the pro-Obama left-wing investigative reporting website funded in part by George Soros's buddies, seems to have slipped up.

One of its reporters, a real good one named Marshall Allen, has written a bang-up, worth-reading-every-word, satisfying exposé about why health insurance costs are so high and why so many patients get ugly surprises when it's time to pay the bill.  Buried within, in what should have been the lede, is an indictment of not the insurance industry, but of the perverse incentives embedded within Obamacare – that are driving insurance costs through the roof.

It's the biggest unintentional argument for getting rid of the nightmare of Obamacare I've seen in ages, because the report is real good.

NPR, probably thinking it was running a establishmenty left-wing piece due to its headline indicting insurance companies, actually ran it.  The article itself says its reporters participated in it as well.

Here's the money quote, which ran more than halfway down the long, well written piece (emphasis mine):

The Affordable Care Act kept profit margins in check by requiring companies to use at least 80 percent of the premiums for medical care. That's good in theory, but it actually contributes to rising health care costs. If the insurance company has accurately built high costs into the premium, it can make more money. Here's how: Let's say administrative expenses eat up about 17 percent of each premium dollar and around 3 percent is profit. Making a 3 percent profit is better if the company spends more.

It's as if a mom told her son he could have 3 percent of a bowl of ice cream. A clever child would say, "Make it a bigger bowl."

Wonks call this a "perverse incentive."

"These insurers and providers have a symbiotic relationship," said Wendell Potter, who left a career as a public relations executive in the insurance industry to become an author and patient advocate. "There's not a great deal of incentive on the part of any players to bring the costs down."

If the writer wanted to get franker about it, he could have said, "The Affordable Care Act sold itself to the public through political claims it kept profit margins in check," because that was what was done when the battle to approve the Obamacare nightmare went on, and that was how it was sold to the public.

The reality was different: insurance companies simply bulk up their costs by paying larded up fees to hospitals for treatment instead of dickering them down as they should do if they operated in a normal, competitive market.  Then, acting on the perverse incentives, they collect a bigger chunk from their customers. 

It would seem natural for them to want costs to be lower, the ProPublica piece argues, but here is the reality:

Turns out, insurers don't have to decrease spending to make money.  They just have to accurately predict how much the people they insure will cost.  That way they can set premiums to cover those costs – adding about 20 percent for their administration and profit.

They have every incentive to "make the bowl bigger," which is why hospitals charge such big bills often with fake or unnecessary services, just as the patient they cited found, given that they have a captive audience.

The backdrop, not mentioned, is that they lose money anyway with the Obamacare nightmare, and the downward spiral continues.

If this isn't an argument to get rid of Obamacare once and for all, and install a true free marketplace of health care and insurance, what is?  Insurance costs are slated to keep rising.  From this investigation, it's pretty obvious why.  And when you have lefty reporting outfits such as ProPublica admitting as much, then Obamacare has passed its shelf life, and it's time to throw it out.

ProPublica, the pro-Obama left-wing investigative reporting website funded in part by George Soros's buddies, seems to have slipped up.

One of its reporters, a real good one named Marshall Allen, has written a bang-up, worth-reading-every-word, satisfying exposé about why health insurance costs are so high and why so many patients get ugly surprises when it's time to pay the bill.  Buried within, in what should have been the lede, is an indictment of not the insurance industry, but of the perverse incentives embedded within Obamacare – that are driving insurance costs through the roof.

It's the biggest unintentional argument for getting rid of the nightmare of Obamacare I've seen in ages, because the report is real good.

NPR, probably thinking it was running a establishmenty left-wing piece due to its headline indicting insurance companies, actually ran it.  The article itself says its reporters participated in it as well.

Here's the money quote, which ran more than halfway down the long, well written piece (emphasis mine):

The Affordable Care Act kept profit margins in check by requiring companies to use at least 80 percent of the premiums for medical care. That's good in theory, but it actually contributes to rising health care costs. If the insurance company has accurately built high costs into the premium, it can make more money. Here's how: Let's say administrative expenses eat up about 17 percent of each premium dollar and around 3 percent is profit. Making a 3 percent profit is better if the company spends more.

It's as if a mom told her son he could have 3 percent of a bowl of ice cream. A clever child would say, "Make it a bigger bowl."

Wonks call this a "perverse incentive."

"These insurers and providers have a symbiotic relationship," said Wendell Potter, who left a career as a public relations executive in the insurance industry to become an author and patient advocate. "There's not a great deal of incentive on the part of any players to bring the costs down."

If the writer wanted to get franker about it, he could have said, "The Affordable Care Act sold itself to the public through political claims it kept profit margins in check," because that was what was done when the battle to approve the Obamacare nightmare went on, and that was how it was sold to the public.

The reality was different: insurance companies simply bulk up their costs by paying larded up fees to hospitals for treatment instead of dickering them down as they should do if they operated in a normal, competitive market.  Then, acting on the perverse incentives, they collect a bigger chunk from their customers. 

It would seem natural for them to want costs to be lower, the ProPublica piece argues, but here is the reality:

Turns out, insurers don't have to decrease spending to make money.  They just have to accurately predict how much the people they insure will cost.  That way they can set premiums to cover those costs – adding about 20 percent for their administration and profit.

They have every incentive to "make the bowl bigger," which is why hospitals charge such big bills often with fake or unnecessary services, just as the patient they cited found, given that they have a captive audience.

The backdrop, not mentioned, is that they lose money anyway with the Obamacare nightmare, and the downward spiral continues.

If this isn't an argument to get rid of Obamacare once and for all, and install a true free marketplace of health care and insurance, what is?  Insurance costs are slated to keep rising.  From this investigation, it's pretty obvious why.  And when you have lefty reporting outfits such as ProPublica admitting as much, then Obamacare has passed its shelf life, and it's time to throw it out.