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May 18 2015

Health analysts react to ObamaCare-is-awesome study

One News Now
Hadley Heath

Not surprisingly, conservative analysts are dissecting the study.  

The study, done by the Urban Institute and Robert Wood Johnson Foundation, points to language in the Affordable Care Act that requires insurers to spend a certain percentage of premiums on medical expenses or refund the difference to consumers.

According to the study, this resulted in $5 billion in savings for consumers in 2011 and 2012, the only two years of data available.

"The $5 billion figure is way off. It's more like $300 million in actual reductions," says Ed Haislmaier, a senior fellow for the Center for Health Policy Studies at The Heritage Foundation.

He tells OneNewsNow the $5 billion figure is "a pure extrapolation of, Well, if nothing else had changed, what would premiums have been? There's no way of knowing that."

OneNewsNow also sought comment from Hadley Heath Manning, director of Health Policy at the Independent Women's Forum. She says the refund tells her about the insurance market before ObamaCare became law.

"If indeed there was a lot of room for insurance companies to cut down on overhead, to cut down on administrative costs, then it wasn't a very competitive market before we had ObamaCare," Manning observes.

On the other hand, she says, there's also the possibility that this particular provision, and the reduction in administrative expenses, is not the full story.

Manning further explains: "Typically, when money gets moved around from one part of a business to another, there may be benefits on one side, like it appears that some larger insurers and some insurers participating in ObamaCare are reducing their administrative costs. But then that makes me ask the question, Where is that money coming from?"

That makes Manning question what the downside is to this, because it does not appear that insurance companies would have this much room to reduce their overhead, unless they were protected from market competition before ObamaCare.

Meanwhile, one of the study's authors has told MarketWatch that the new spending requirements forced few if any insurers out of business.

Independent Women’s Forum’s mission is to improve the lives of Americans by increasing the number of women who value free markets and personal liberty. Sister organization of Independent Women’s Voice.
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