It is clear that contrary to the claims of its proponents, health insurance premiums are going to be higher under the regulatory and structural regime created by the health reform law. That may be due to a variety of factors, including mandated coverage of more services, removal of some cost-sharing features and restrictions on rating by likely expected use of health services. A report from the Commonwealth Fund attempts to claim that the reform law is only responsible for a small part of health insurance premium rises for 2012 and 2013, but the analysis is seriously flawed. (Commonwealth Report) The authors looked solely at rates for non-grandfathered plans starting from mid-2012 to mid 2013, and only for groups of over 150. So none of the plans being sold on the exchanges are included and the analysis only covers a time period before the act is fully implemented. Large group filings, which cover the most people, are not included, and the authors note that the analysis covers at most 5% to 10% of total individual and small group market enrollment. The reasons for the increases are self-reported, so their accuracy is questionable. Finally, only rate increases over 10% were examined, but even an increase of 5% is significantly in excess of inflation, and factors for increases over 10% and those under 10% may be different. The insurers said in their filings that the main factor for rises over 10% was medical cost trend, both utilization and unit price. In about half the filings, insures said taxes and mandated benefits stemming from the reform law were a factor, but it is hard to see how uniformly imposed taxes and benefit mandates could only effect half the filings. In the individual market, the average increase was 19% and in the small group one it was 15%. Insurers who made this limited set of reviewed filings said that medical cost increases were larger than the premium rate increase request for the individual market and that they roughly matched the rate hike in the small group market. About a fourth to a third of the medical cost increase was due to utilization and about 57% to unit prices. Although the authors attempt to minimize it, the mandate to provide certain contraceptive services and the new taxes and fees from the law do clearly have an impact on rates, in total up to 5% or more. The reality, as consumers know, is that the reform law is having a substantial negative effect on what they pay for health care coverage. The Commonwealth Fund and other apologists only undermine their credibility when they create these misleading analyses that are counter to the obvious.
Does Health Reform Cause Premium Increases
By Kevin RocheDecember 23, 2013Commentary
✅ Subscribe via Email
About this Blog
The Healthy Skeptic is a website about the health care system, and is written by Kevin Roche, who has many years of experience working in the health industry. Mr. Roche is available to assist health care companies through consulting arrangements through Roche Consulting, LLC and may be reached at [email protected].
Healthy Skeptic Podcast
This is an outstanding report on total global drug spending and trends, with projections out to 2025. It helps you understand this important area of health care, which does much...
June 1, 2021
MedPAC 2019 Report to Congress
June 18, 2019
Another example of over-priced companies trying to find some way to survive in the post-epidemic financial world. Transcarent, which does something, somehow to “access high quality, affordable care” is buying...
March 6, 2023
In an attempt to swiftly revive two floundering health care companies, a PE firm has announced the merger and recapitalization of Revive Health and SwiftMD. You know they are...
January 30, 2023
Investors have not yet learned their lesson, as Pearl Health gathers a new round of $75 million in capital for its business of supporting physicians who want to participate in...
January 30, 2023
Access ACO Care Management Chronic Disease Comparative Effectiveness Consumer Directed Health Consumers Devices Disease Management Drugs EHRs Elder Care End-of-Life Care FDA Financings Genomics Government Health Care Costs Health Care Quality Health Care Reform Health Insurance Health Insurance Exchange HIT HomeCare Hospital Hospital Readmissions Legislation M&A Malpractice Meaningful Use Medicaid Medical Care Medicare Medicare Advantage Mobile Pay For Performance Pharmaceutical Physicians Providers Regulation Repealing Reform Telehealth Telemedicine Wellness and Prevention Workplace
March 21, 2023
Minnesota’s New Energy Insanity, Part 7
Minnesota is a particularly poor place to rely on solar power, but other states aren't…
March 21, 2023
A Quick SVB Follow-up
As I suspected, the SVB saga is primarily one of regulatory malfeasance, coupled with political…
March 19, 2023
Tom Frieden Speaks in the WSJ
A public health expert writes an article for the WSJ which amply demonstrates why Americans…