Rather, as I read this article, we learn that the Obama Administration is arguing that the rate increases are not a result of the new law, mandating that insurance providers provide additional benefits. What is wrong with people's basic economics? There are is an expression that is fundamentally true and must be understood: "There's no such thing as a free lunch." The basic concept encapsulated by this expression is that if you want something, you, or someone else, must pay for it. People seem to believe that insurance should provide increasing benefits at decreasing costs. Now, of course, some costs will go down as advanced machinery become cheaper to make and buy, but if you want more procedures to be paid for by insurance, why should it cost less?
This comes back to something that I have realized: Americans (and perhaps most others too) have no concept of how insurance works. People think that insurance is like a buffet. You pay a fee and then take as much as you want. Rather, what insurance is is a way for many people to pool their resources now and to ensure protection against losses later. If we build a new neighborhood, we all might purchase fire insurance. Most of us will never have fire damage, but we will pay for coverage every year. Then, one home burns down. That person's rates will typically increase (as they now have taken more money than they put in) and everyone will continue to pay. For every one person that gets $100,000 in payouts after paying $2,000 in coverage costs, there are many others paying $2,000 in costs for no payouts. Anyone whose house never burns down, pays in a lot of money and never gets any funds back. If more and more people were to start making claims, the costs of protection would go up for everyone to make sure that the pool remains filled. Even those who never needed that coverage would continue to pay more (though less "more" than those who used the service). We get insurance coverage not because we know we need a payout, but because the cost of paying premiums is spread out (and hence, affordable) whereas a major disaster would not be within our budget. I would rather pay a little every year and be covered should I need to rebuild half of my house later than to save that money and have to pay for the rebuilding myself.
Even if you are one of those that gets more than you initially pay, with your rate increases, you may very well pay back the funds (or at least a significant portion thereof) through your higher rate increases. You might not, but this is merely a cost-shifting feature that we all could potentially benefit from by entering into the pool. We could all be the one who needs the payout, and so we pay even if we never use it.
This same process applies to car insurance. I have never taken a penny from my insurance company, but have paid at least $5,000 in premiums (I have minimal coverage). If I want more coverage, I must pay more. But, I will always have coverage (regardless of state law), not because I want something free, but because I would rather pay a little every year and be covered if I need to pay a large payment at a future time. Because I have not needed insurance to cover my costs, I pay lower premiums, but I still pay far more than I have received. Yet, because I could potentially need a large sum in the future, I would continue to pay, regardless of state law.
Now, back to my point, if we (as a group), we will pay more. If we want less, we will pay less. We will never get more by paying less. So, when Obamacare promises more benefits for less money, it means that is a lie, or it means that you will get more for less while others will get less for more. The money has to come from somewhere, even though everyone hopes it is not them.
Finally, Cato has a great article about how our health insurance is not health insurance, but health care pre-payments. This may seem to be a rambling discussion, but the ignorance of large swaths of our population amazes me.
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