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“Another Anti-Obamacare Headline”: Beware The Great Health Insurance Scam Of 2014

The anti-Obamacare world is atwitter over comments made last week by Aetna CEO, Mark Bertolini, who predicts that some insurance markets will “go up as much as much as 100 percent” when Obamacare takes hold in 2014—with the average increases running between 25 percent and 50 percent in the small group and individual segments of the business.

Mr. Bertolini has dubbed this phenomenon “premium shock”.

To be sure, this is a great headline for those who remain committed to defeating the Affordable Care Act with nothing better to suggest in its place. However, the facts reveal that Bertolini’s comments—while just maybe true for a very few participants buying coverage on the exchanges in the individual markets—are completely misleading with respect to the individual markets and likely completely untrue as applied to the small group market.

So, how is Mr. Bertolini arriving at his dire predictions?

Apparently, it’s all about (a) the new tax placed on health insurance company sales, (b) the community rating requirements that now prohibit older participants in a health insurance pool to be charged more than 3 times what is paid by younger members and (c) the new minimum standard of benefits that will need to be provided to those who purchase health coverage on the exchanges.

Pretty scary, yes?

The problem with Mr. Bertolini’s prediction is that it is completely and utterly at odds with not only the Congressional Budget Office (“CBO”) projections but with American Health Insurance Plans (AHIP) —the very lobbying organization that represents Aetna and was an active and hugely important supporter of Obamacare.

In 2009, the CBO projected that the Affordable Care Act will have little impact on small and large group policies. This is notable given the expectation that, by 2016, the small group market will represent 13 percent of the total insurance market while large groups will provide coverage for a full 70 percent of Americans with health insurance coverage. Do the math and you find that, according to the CBO, 83 percent of all covered Americans will experience little to no change in premium rates beyond normal increases that would occur had Obamacare never become the law of the land.

As for the individual markets, which will comprise 17 percent of the overall insurance market in 2016, premium rates are predicted to rise about 10 to 13 percent by 2016—considerably lower than the doubling Mr. Bertolini has suggested will take place in 2014.

What’s more, approximately half of those gaining coverage in the individual market will qualify for the government subsidies, thereby reducing the price of their insurance premiums below where they currently exist.

Of course, it is not uncommon for people to discount CBO projections and proclaim them to be biased when the projections fail to meet a desired political narrative.

So, let’s see what Aetna’s own trade association, AHIP, has to say.

A review of the AHIP website reveals that the sales tax imposed on the health insurance companies—and sure to be passed along to consumers—will account for a premium increase averaging 1.9 percent to 2.3 percent by 2014 and 2.8 percent to 3.7 percent by 2023.

Now, you may object to this potential increase—but it is a long way from the increases Mr. Bertolini is predicting.

On the subject of community rating—where insurance companies will now be prohibited from charging older participants in their health insurance pools as much as 10 times more than what they charge younger members even if the elder participants have no pre-existing health problems—AHIP indicates that limiting the rates for the older participants to only 3 times the rate charged the young will result in some younger insurance customers paying as much as 45 percent more in premium payments while older participants will pay 13 percent less.

No doubt, this is a large part of what Aetna’s Bertolini is relying on when trying to freak out the public.

The problem with Bertolini’s prediction is that even this large percentage increase, should it prove to be actuarially accurate, would not apply in the small and large group markets- it would apply only to a very limited number of people purchasing their health insurance on the exchanges who are (a) very young and (b) not qualified for subsidies.

The number is also misleading in its severity.

According to AHIP, the average premium paid by a 24 year old in the individual marketplace is $1200 a year. Using AHIP’s numbers, the price of making the cost of heath insurance more equitable for a 60 year old will potentially cost that 24 year old, on average, an extra $45 a month.

While I don’t mean to minimize this increase, as I recognize that every dollar counts when one is young and getting started, it is important to keep the actual price tag in perspective and weigh the equities when considering that those at the older age range have been overcharged for many years.

The reality is that the young have been paying unreasonably low premium rates for for a very long time—it being in the health insurance company’s profit interest to bring in as many young and healthy people as possible in the door by charging artificially low rates. The problem is that they make up for it by charging artificially high rates to the older people the insurance company would rather not have in the first place. What the ACA seeks to do is correct this situation so that 60 year olds are not precluded from gaining health insurance coverage by being priced out of the market.

Note that this problem could have been averted for younger Americans had we lowered the Medicare age to 55 however this was not acceptable to the Congressional GOP.

And that brings us to the topic of minimum benefits that must now be including in insurance policies offered on the health care exchanges, another area where large increases can be found in the effort to alarm the public.

According to AHIP, the additional costs attributable to health insurance companies actually having to provide a meaningful benefit ranges for as little as a tenth of a percentage point in Rhode Island to 33 percent in Maine where, apparently, health insurance policies do not provide much in the way of actual coverage. And, again, these numbers apply only to the individual marketplace on the exchange.

Thus, if you are one of the 8.5 percent of Americans who will be buying your coverage on the exchange in the state of Maine (making for a very, very tiny percentage) you may now have to pay more to actually get some health care coverage in exchange for what you pay.

So, what does all this tell us?

Gary Klaxon, Vice President of the Kaiser Family Foundation—one of the few health care think- tanks that just about everyone agrees is completely non-partisan and objective, had this to say about Mr. Bertolini’s predictions:

“That just seems silly. I can’t imagine anything going on in the small-group market that would change the average premium that much. On the individual market, there’s arguments for things changing, but those magnitudes seem high.”

Silly, indeed.

There is, of course, more to this than what the anti-Obamacare folks are choosing to report.

That would be the part where Bertolini noted in his ‘premium shock’ comments that this huge, one-time jump in premium rates to be expected in 2014 also includes increases in costs that would come even without the health care reform law.

Translation—health insurance companies have been trying to raise rates at a ridiculous pace ever since the word ‘Obamacare’ first entered the American lexicon, always seeking to blame these increases on the law even before the law became the law. So, when 2014 arrives, you can be certain that they will do everything in their power to grab as large an increase as they can get away with in order to preserve their profits.

Mr. Bertolini is merely laying the groundwork for that effort as Obamacare has provided the health insurance industry with a wonderful scapegoat, perfectly suited and even more perfectly timed to cover the inescapable truth of health insurance—it is a business model whose time has passed.

The sooner the American public realizes that private health insurance companies no longer work, the sooner we can get busy with the solutions that, while politically uncomfortable, can actually solve the nation’s health care challenges.

In the meantime, if you are a part of a large or small business health insurance group, there is no reason to expect that there should be significant—if any— increases in your premium charges in 2014. If you are an individual who will be shopping for health insurance on the exchanges, the 50 percent of you that will qualify for subsidies should experience premium costs at a lower rate than what you are currently paying, If you are in that other half, you may, indeed, see some increase in your rate—but nowhere near the ‘doubling’ the insurance industry would like you to believe is in your future.

 

By: Rick Ungar, Op-Ed Contributor, Forbes, December 20, 2012

December 21, 2012 Posted by | Health Care | , , , , , , , , | Leave a comment

“By The People, For The People”: Proof Obamacare Puts Control Of Healthcare In The Hands Of The Consumer

One of the key talking points consistently mouthed by opponents of the Affordable Care Act is their declaration that the law wrests control of healthcare out from the hands of the consumer and places it squarely under the control of the federal government.

And yet, the meme—like so many others employed by dedicated Obamacare bashers— is simply not true.

Now, we can prove it.

You have likely never heard about the section of the ACA that provides federal loans to help launch consumer owned and controlled health insurance plans. The money is available for insurance plans showing a reasonable chance for success, are owned by the membership (people like you and I) and operated by a board of directors where members comprise the majority -not passive investors looking to make a buck.

It is health insurance by the people and for the people.

Tufts Medical Center in Massachusetts—along with their physician group and a company which owns and operates two hospitals in the region—has acted on this provision of the law and received $88.5 million in federal funds to create the state’s first member owned and controlled health insurance plan. While the program is being put together by a panel of experts, once the insurance plan is qualified to do business by the state’s insurance regulators, they will begin signing up individuals and small businesses who will not only become the owners of the plan, they will ultimately end up running the company.

How’s that for putting control of our healthcare back into the hands of the consumer?

The not-for-profit plan entitled the Minuteman Health Initiative—which expects to offer health insurance coverage in Eastern and Central Massachusetts beginning in 2014—is looking to bring down the cost of premiums to its members by streamlining the billing process and allowing providers to work directly with employers.

According to Dr. Jeff Lasker, chief executive of the Tufts physician group, New England Quality Care Alliance, “Imagine working closely with an employer who can help us gather data and, with employees’ permission, to be able to share that data with their primary care providers. “

Imagine, indeed.

Physicians, hospitals and consumers working alongside one another to design coverage options that better meet the needs of all the participants in the healthcare equation in the effort to bring about a better result for everyone—and done in an environment where the consumer is in control of the board of directors rather than profit driven executives whose bonuses are determined by how much money is left in the till at the end of the quarter.

Can there be anyone who does not see the great potential in this concept?

We are a nation where our health care is, for most of our citizens, controlled by private insurance companies—not the United States government. If you don’t believe that, just ask your physician what he or she must go through to get an insurance company to approve a treatment or procedure you need and how you end up paying for all this time your doctor invests in fighting for your care.

Will the Minuteman Health Initiative work? Will it accomplish the goal of lowering costs and providing appropriate benefits to consumers while allowing for a workable compensation structure to health care providers—all under the direction of the very people who depend on the plan for their health care needs?

We’ll see.

But if you don’t try something, you never find better solutions. And should the Minuteman plan work out, we can expect to see similar programs launched in every state in the union—insurance plans designed to work for both provider and beneficiary and all under the control of the people who actually pay the premiums and depend upon the benefits for the security of their families.

I don’t care how much you think you detest Obamacare. If you aren’t rooting for success in the case of the Minuteman Health Initiative—and the law that made it possible—you simply are not paying attention.

 

By: Rick Ungar, Contributor, Forbes, September 1, 2012

September 4, 2012 Posted by | Election 2012, Health Reform | , , , , , , , | Leave a comment

When Lies Don’t Work, Try “Bait And Switch”: What Paul Ryan’s Budget Actually Does

Paul Ryan’s plan for Medicare and Paul Ryan’s plan for Medicaid rely on the same bait-and-switch: They use a reform to disguise a cut.

In Medicare’s case, the reform is privatization. The current Medicare program would be dissolved and the next generation of seniors would choose from Medicare-certified private plans on an exchange. But that wouldn’t save money. In fact, it would cost money. As the Congressional Budget Office has said (pdf), since Medicare is cheaper than private insurance, beneficiaries will see “higher premiums in the private market for a package of benefits similar to that currently provided by Medicare.”

In Medicaid’s case, the reform is block-granting. Right now, the federal government shares Medicaid costs with the states. That means their payments increase or decrease with Medicaid’s actual rate of spending. Under a block grant system, that’d stop. They’d simply give states a lump sum at the beginning of the year and that’d have to suffice. And if a recession hits and more people need Medicaid or a nasty flu descends and lots of disabled beneficiaries end up in the hospital with pneumonia? Too bad.

In both cases, what saves money is not the reform. It’s the cut. For Medicare, the cut is that the government wouldn’t cover the full cost of the private Medicare plans, and the portion they would cover is set to shrink as time goes on. In Medicaid, the block grants are set to increase more slowly than health-care costs, which is to say, the federal government will shoulder a smaller share of the costs than it currently does. The question for both plans is the same: What happens to beneficiaries?

Remember how the Affordable Care Act was really, really, really long? There was a reason for that. It was full of delivery-system reforms meant to make the health-care system cheaper and more efficient — things like bundling payments for illnesses and reducing reimbursements to hospitals with high rates of infection and creating a center tasked with seeding cost-control experiments throughout Medicare and encouraging the formation of Accountable Care Organizations. The hope is that those reforms will cut costs, which will make the rest of the bill’s cuts possible (more on that here). Republicans, notably, have been skeptical that these reforms will work, and have argued that the cuts won’t stick because beneficiaries will revolt.

To my knowledge, Ryan’s budget doesn’t attempt to reform the medical-care sector. It just has cuts. The hope is that those cuts will force consumers to be smarter shoppers and doctors to be more economical and states to be more innovative. But all that’s been tried, and it hasn’t been enough. That’s why the Affordable Care Act had to go so much further, digging deep into the delivery system, and why Republicans had at least a plausible case that some of its cuts wouldn’t stick. But now the GOP needs to apply the same skepticism to their own programs: Cuts aren’t enough, and if they somehow manage to distract people from the cuts by repeating the words “block grants” and “flexibility” and “premium support” over and over again, they’ll simply end up seeing their cuts ignored when it becomes clear that they’ll mean leaving the old and the poor without health care. What Ryan has here isn’t so much a plan to control spending as a plan to cut spending, whatever the consequences.

By: Ezra Klein, The Washington Post, April 4, 2011

April 5, 2011 Posted by | Affordable Care Act, Congress, Conservatives, Consumers, Economy, Federal Budget, GOP, Health Care Costs, Health Reform, Medicaid, Medicare, Politics, Public, Rep Paul Ryan, Republicans | , , , , , , , | Leave a comment

   

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