Friday, June 14, 2013

The Politicians Versus the Health Insurance Industry

Personally, I am sick of the adversarial relationship between politicians and the health insurance industry. Everyone is promoting their own agendas. The insurance companies keep raising rates in order to make profits, and the insurance commissioner of California continues to make ludicrous politically motivated comments about the big bad health insurance companies. Would it not make sense for a coalition of these people to sit at the same table and figure out a way to offer affordable health insurance to this country instead of creating questionable programs that may continue to drive rates higher? The people I work with and talk to want one thing, and that's for their health insurance rates to be more affordable. 
Instead of striving to reach this objective, everyone is playing a game of one-upmanship, and the consumer winds up getting shafted.  The biggest challenge for the near future is separating truth from fiction, as we are about to be bombarded with a multi million dollar advertising program from the State of California regarding the new Covered CA health insurance exchange.  Whether it's me or someone else, please consider working with a knowledgeable person who can help you sift through this new health insurance maze.

Thursday, June 6, 2013

California’s Modest Rates: Behind the Numbers

by: Bruce Shutan

June 6, 2013

Anthony Wright, executive director of the advocacy group Health Access, recently told Reuters that the premium projections represent “a revolutionary improvement to move from a broken market where people are charged by how sick they are, to a competitive market where people pay what they can afford, based on a percentage of their income, on a sliding scale.”

Not exactly, according to California Republican Assemblyman Dan Logue, who compared the rates to “a shell game” and predicted that a tax hike would be needed to fund subsidies, which would trigger higher prices at the gas pump, grocery store and other venues.

Thirteen of the more than 30 health insurers that had applied to participate in the California Health Benefit Exchange will offer coverage in the HIX. Peter Lee, the exchange’s executive director, has noted that residents can expect to pay up to 29% less than current rates for small businesses.

The public exchange rates being reported in California and some other states across the U.S. do not necessarily reflect what individuals may pay once their age, location, smoking status and income are all factored into the mix, cautions Robert Zirkelbach, a spokesman for America’s Health Insurance Plans. Another consideration is the regulatory environment that’s in place in each of these states.

“Many people are going to be required to purchase coverage that’s much more comprehensive, but also more expensive than what they’re purchasing today,” he says. A recent Milliman report estimated that premiums could climb an average of 30% next year for many of the roughly 1.3 million middle- or higher-income Californians with individual-market coverage.

Conspicuously absent from the recent announced rates in California is how they compare to what people are paying today, which Zirkelbach says could vary significantly from one individual to the next. Some young people, however, are expected pay nothing at all, depending on their earnings, while others will qualify for subsidies to help finance their coverage.

One bright spot is that market forces are already shaping the HIX model. “We’re seeing plans offer a variety of innovative benefit packages in a lot of these exchanges, including a high-value provider network, as well as programs that promote prevention and wellness, and coordinate care for patients with complex medical conditions,” Zirkelbach observes. The underlining goals are to improve care, while also making coverage more affordable, he adds.

Concern has been voiced about a lack of HIX competition in some states, such as Alabama and Alaska, where certain health insurance carriers dominate those markets. But Zirkelbach explains that “just because one health plan has large market share doesn’t mean there’s not competition in the marketplace or there are not choices for consumers.”

He points to a variety of coverage options from different health plans as well as multiple policies being available within any given carrier – information that’s easily accessible at and categorized by Zip code.

Bruce Shutan is a Los Angeles freelance writer.

Some unlikely to pay for Obamacare coverage

by Grace-Marie Turner
Galen Institute
June 6, 2013

Virtually all Americans will be required to have health insurance under the Affordable Care Act starting in 2014, and President Barack Obama especially wants young, healthy people to sign up.
About two-thirds of the uninsured are younger than 40. They use fewer health services, and their premiums are needed to help keep insurance costs down for everyone else.  Yet the incentive structures in the law work at cross-purposes with this goal and could well undermine its success. It will all come down to costs.  Four out of 5 people younger than 30 will face higher premiums than without the Affordable Care Act even with the subsidies many can receive.

The law requires young people to pay more for their health coverage so older people can pay less. A study published this year by the American Academy of Actuaries’ Contingencies magazine found that because of this provision, “premiums for younger, healthier individuals could increase by more than 40 percent.” Young men will pay even more than young women.

A former director of the Congressional Budget Office, Douglas Holtz-Eakin, conducted a survey that showed fewer than half of young people will sign up for insurance if premiums rise by 30 percent.
Young people also face a daunting approval process in applying for coverage. Applicants must divulge their income, family status and information about their employers, details on any insurance offered at work and their health habits — just to find out if they are eligible for subsidies.
Ezekiel Emanuel, a key architect of the president’s health plan, says he is worried that young people will be “bewildered,” and they may “forgo purchasing health insurance and opt to pay a penalty instead.”

That certainly will be an attractive option for many since the penalty starts at just $95 the first year.
And there is yet another disincentive for young people to enroll in coverage: They can wait to sign up for coverage until after they get sick or injured. The law requires health insurance companies to sell insurance to anyone who applies.  But if young people don’t sign up, the insurance pools are likely to be composed primarily of people who have high health costs. This could cause a “death spiral” where many more older — and sicker — people are enrolled, causing health insurance premiums to rise to cover their medical costs, thereby driving even more young people out of the market.

The White House believes that it will be able to persuade young people, who overwhelmingly supported the president, to enroll out of loyalty.  “The president connects with young people, too, so he needs to use that bond and get out there to convince them to sign up for health insurance to help this central part of his legacy,” said Emanuel, a health care expert at the University of Pennsylvania.
But young people may find that zeal may be severely tested when it comes down to paying thousands of dollars for health insurance that they may not want or need.

Consider, for example, a 27-year-old earning about $34,000 a year. He now could buy health insurance for about $200 a month. However, the new rules and more generous benefits required under the health law mean he would have to pay about $300 a month instead. He could get a subsidy of about $20 a month but, even with that, he still would be paying nearly $1,000 a year more for health insurance than without the law.

The White House is expected to mount a massive advertising campaign this summer to encourage people to enroll.  This will severely test his young supporters, who are having the hardest time finding jobs in our economy. Forcing them to also purchase health insurance — and pay more for it — may cool their enthusiasm to help the president fulfill his legacy.