How our failure to fix Medicare and Medicaid resulted in big Obamacare premium hikes

To the editor: Medicaid underpays providers such as hospitals and physicians, creating a cost shift onto the purchasers of healthcare through Covered California, small business pools or the independent market. (“Covered California shows it’s not immune to big premium increases,” editorial, July 21)

As large companies and unions self-insure and most of the purchasers on health insurance exchanges are subsidized, the rest of us bear the burden with forced narrow networks and ever increasing premiums. The government has artificially limited growth in Medicare expenditures in spite of a graying population, worsening the scenario.

The Affordable Care Act, commonly known as Obamacare, has been the largest expansion of Medicaid since its inception, with about one-third of all Californians enrolled in Medi-Cal. The 17% and 20% premium increases from, respectively, Anthem Blue Cross and Blue Shield are directly related to the failure of our elected officials to honestly deal with how to pay for quality healthcare for seniors, disabled individuals and the working poor.

Howard C. Mandel, MD, Los Angeles

..

To the editor: All insurance policies are based on a very simple theory: the Law of Large Numbers (LLN), which is based on probability theory. The average of the results obtained from a large number of medical procedures should be close to the expected value and will become closer as more procedures are performed.

LLN is important because it projects stable, long-term results from random events such as the cost of healthcare. Unfortunately, when it comes to health insurance, LLN is predicated on the notion that there is a “true cost” to a medical procedure.

In reality, providers often inflate the value of care. They do this because they anticipate that insurers will not fully cover claims. Consequently, insurers adjust their rates up to catch up to the inflated values. And the cycle continues.

Unfortunately, this does not provide stability. As a result, Obamacare cannot fulfill its intent: to make sure all Americans are insured.

Stephen A. Bonick, Monterey

Follow the Opinion section on Twitter @latimesopinion and Facebook