Author Archive | John Barrett

Health care reform: Four inconvenient truths

President Barack Obama promised over and over during the health care debate that “if you like your health care plan, you can keep your health care plan.”

It turns out that, for a lot of people, that isn’t true.

A Congressional Budget Office report issued this week says that 3 million to 5 million people could move from employer-based health care plans to government-based programs as the Affordable Care Act takes effect. And in the worst-case scenario, it could be as many as 20 million.

For Obama, it’s an inconvenient truth at a really inconvenient time — coming less than two weeks before the Supreme Court begins oral arguments on the law and just as the administration touts the law’s early benefits on its second anniversary.

And it’s not the only hard truth Obama and the law’s supporters are facing. No matter what they said about rising health care costs, those costs aren’t actually going to go down under health care reform. The talk about the law paying for itself is just educated guesswork. And people aren’t actually liking the law more as they learn more about it — and some polls show they are just getting more confused.

But it’s Obama’s signature promise — “If you like it, you can keep it” — that’s most likely to get thrown back in his face. Here are the four hard truths of health care reform as the law approaches its March 23 anniversary:

1) Some people won’t get to keep the coverage they like.

For Republicans, the CBO report is a giant “I told you so” moment — and they’re lining up to tell you so.

“President Obama repeatedly promised during the health care debate, ‘if you like your current plan, you will be able to keep it,’” House Energy and Commerce Committee Republicans said in a statement Friday. “Even under CBO’s ‘best estimate,’ President Obama will have broken his promise to 3 million to 5 million Americans each year, but unfortunately, that number could be much higher.”

Supporters of the law say it’s not as bad as all that. The 20 million figure is the extreme scenario, they point out — CBO says that 3 million to 5 million is more likely. And that’s out of the 161 million Americans who would have had workplace health insurance before the law was passed.

Even in that case, the number is misleading, according to Topher Spiro of the Center for American Progress, because CBO says about 3 million wouldn’t be forced out. They would leave their workplace coverage voluntarily — possibly for better coverage, with subsidies, through the law’s new health insurance exchanges.

And for the rest, Spiro said, employers will have to take the responsibility for what happens — because they’ll still have plenty of incentives to offer coverage to their workers, especially once the individual mandate requires everyone to have it. “If they decide to drop coverage, that will be their decision, and they should not blame the health care law,” Spiro said.

But try explaining all that over the 30-second Republican campaign ads that are sure to come. And it’s not what Obama promised as he pushed for the new law two years ago.

“If you like your plan and you like your doctor, you won’t have to do a thing,” Obama promised at a press briefing in June 2009. “You keep your plan; you keep your doctor. If your employer’s providing you good health insurance, terrific. We’re not going to mess with it.”

The estimate of 3 million to 5 million is also a net figure, so it masks some bigger changes in both directions.

For one thing, CBO says 11 million Americans won’t get employment-based health insurance they would have had before the law — so they will be forced out (technically by their employer, not by the president, but the context will be the changes brought about by the health law). Another 9 million would gain coverage — but everyone who loses it will see their lives disrupted, and it will be used as more evidence of broken Obama promises.

But all of that assumes CBO is right. For the law’s supporters, the dream scenario is that employment-based coverage will go up — which is what happened in Massachusetts under Mitt Romney’s health care reform law, which (as his Republican rivals have been known to point out) also has an individual mandate. According to the state’s figures, the percentage of employers that offer health coverage has increased from 70 percent to 77 percent since 2005.

2) Costs aren’t going to go down.

The video released by the Obama campaign Thursday has a graph that shows health insurance premiums climbing and climbing — way above general inflation. Giving families and businesses relief was a big part of Obama’s sales pitch for health care reform.

“Health care costs had been rising three times the rate of inflation, crushing family budgets and choking businesses. And he knew that he couldn’t fix the economy if he didn’t fix health care,” narrator Tom Hanks says in the video.

But no matter what happens with the law, the line on that graph isn’t going to go down. If the law works as the administration hopes, premiums may not rise as fast. But they’re not going to plummet.

That’s because the main drivers of rising costs — including technology, expensive new drugs, an aging population, a surge in chronic diseases, and Americans’ propensity to use a lot more health care than many other countries, even if it doesn’t make them any healthier — have nothing to do with the law.

It’s not clear whether a lot of people actually expected premiums to go down — but there’s already a perception that the law has increased the cost of insurance, which is feeding the negative attitudes. A Kaiser Family Foundation poll released this week found that 49 percent believe the law has “significantly increased the price of health insurance.”

That’s not true. An Aon Hewitt survey of health plans found that health insurance premiums on average rose 12.3 percent in 2011 — but only an average of 1.5 percent can be attributed to the health law. And health premiums had been rising for years before the law was passed.

But what is true is that what most people pay for their insurance — either through higher premiums or bigger co-pays and deductibles — aren’t rising more slowly. The law creates lots of experiments for delivering health care more efficiently, but those are just getting underway. If those don’t work, and costs keep rising, the law will get blamed for it.

3) It’s just a guess that the law can pay for itself.

The Obama administration insists that the health care law will actually reduce the deficit — which sounds like a fantasy to many people, since the law will clearly increase spending through insurance subsidies and an expansion of Medicaid.

But that’s what CBO says. And it’s because the budget office believes the law will pay for itself through cuts in Medicare payments and various new taxes, including fees that health insurers and medical device makers will pay.

Like everything else CBO does, though, those estimates are mostly educated guesses — and they assume Congress is actually going to let the Medicare cuts happen. For example, the law is supposed to save $157 billion over 10 years by increasing Medicare payments more slowly for inpatient hospital, home health and skilled nursing facility services. The law expects those providers to become more productive and more efficient. But watch for plenty of lobbying pressure on Congress to cancel those cuts.

4) “The more they know, the more they’ll like it” isn’t happening.

When the bill passed, Democrats were convinced that Americans would like the health care reform law more once they were able to see its benefits. When then-House Speaker Nancy Pelosi said Congress had to “pass the bill so you can find out what is in it” — an inartful phrase that Republicans have happily quoted ever since — her aides insisted that’s what she meant: People would find out about its benefits once the controversy died down.

Except the controversy has never died down, and people don’t like the law any more now than they did then.

The latest Kaiser Family Foundation poll found that 41 percent had favorable views of the law, while 40 percent had unfavorable views. That’s down from the 46 percent who favored the law in April 2010, right after Obama signed it.

And people actually seem to know less about what’s in the law than they did then. Only 56 percent now know that people will get subsidies to pay for health insurance, compared to the 75 percent who knew in April 2010. Just over half of Americans knew that people with pre-existing conditions will be guaranteed coverage, compared to the 64 percent who knew it in 2010.

The part the most people knew about is the individual mandate — the least popular part of the law. And once the Supreme Court starts hearing the health care reform case on March 26, they’ll hear about that part even more.

Modified from a Political.com article

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CBO: Health law could cause as many as 20M to lose coverage

As many as 20 million Americans could lose their employer-provided coverage because of President Obama’s healthcare reform law, the nonpartisan Congressional Budget Office said in a new report Thursday.

The figure represents the worst-case scenario, CBO says, and the law could just as well increase the number of people with employer-based coverage by 3 million in 2019.

The best estimate, subject to a “tremendous amount of uncertainty,” is that about 3 million to 5 million fewer people will obtain coverage through their employer each year from 2019 through 2022.

The new report adds more detail to this week’s update of the law’s coverage provisions, which CBO released Tuesday. Compared to a year ago, the law is now anticipated to cover 2 million fewer people but cost $50 billion less over 10 years, after factoring penalties paid by individuals and businesses that don’t get or provide healthcare coverage.

Republicans immediately pounced after the new numbers came out because they appear to violate Obama’s pledge that people who like their health plans will be able to keep them. Last year, CBO’s best estimate was that only 1 million people would lose employer-sponsored coverage.

“President Obama’s string of empty promises is quickly becoming a disappointing trail of broken promises,” House Budget Committee Chairman Paul Ryan (R-Wis.) said in a statement. “He promised Americans that his overhaul of the health care sector would not jeopardize the health coverage of those who liked what they had. As nonpartisan analysts made clear today, millions of Americans will soon learn the hard way that Washington’s overreach into their health care decisions will result in sharp disruptions to their coverage and their care.”

Under CBO’s best estimate, 11 million mostly low-wage workers would lose their employer coverage. About 3 million would choose to drop their coverage to go into the new subsidized health exchanges or on Medicaid, while another 9 million would gain employer-sponsored coverage, for a net total of 5 million people losing employer coverage in 2019.

CBO defended its methodology Thursday after Republicans highlighted business surveys that found a bigger number of employers threatening to drop coverage because of the law.

“Some observers have expressed surprise that CBO and [the Joint Committee on Taxation] have not expected a much larger reduction in the number of people receiving employment-based health insurance in light of the expanded availability of subsidized health insurance coverage that will result from the” health law, the report says.

“CBO and JCT’s estimates take account of that expansion, but they also recognize that the legislation leaves in place some financial incentives and also creates new financial incentives for firms to offer and for many people to obtain health insurance coverage through their employers,” the report adds.

Employer surveys, CBO said, “have uncertain value and offer conflicting findings.”

“One piece of evidence that may be relevant is the experience in Massachusetts, where employment-based health insurance coverage appears to have increased since that state’s reforms, which are similar but not identical to those in the [federal health law], were implemented,” the agency said.

Modified from The Hill.com article.

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Survey: Health Care Reform Law Driving Employers’ Group Health Costs Up

While most employers have not yet calculated the financial impact of compliance with the Patient Protection and Affordable Care Act, some estimate compliance with the law has driven their group health costs up by as much as 5 percent, according to a Willis Group Holdings P.L.C. survey released on March 8. The survey, conducted in December by Willis’ New York-based Human Capital Practice division, indicated that only 27 percent of responding employers have determined what it has cost their company to comply with the health care reform law in the two years since its implementation.

Among those employers, more than 55 percent said their total health care costs had risen at least 2 percent as a direct result of the reforms. More than 15 percent of those employers said their costs have risen in excess of 5 percent since 2010.

To offset those rising expenses, 62 percent of responding employers said they expect their peers to raise employee contributions for health care coverage. About 56 percent said they expect other employers to increase their plans’ deductibles and copayments, while 51 percent said they think employers will shift more of the cost burden for dependent care to their workers. “Now that the health care reform act has entered the implementation phase, the costs and benefits associated with the act are coming into greater focus for employers,” Jay Kirschbaum, practice leader for Willis Human Capital Practice, said in a statement released March 8. “The survey suggests employers realize that costs of providing medical benefits will increase and that they will likely have to pass those costs on to their employees.”

Among companies that had measured the cost of compliance with the health care reforms, a little more than half said the cost increases had been driven primarily by a provision of the health care reform law requiring employers to offer coverage to employees’ adult children up to age 26. Almost 37 percent said the rule eliminating annual and lifetime coverage limits for “essential health benefits” was responsible for their increases.

Despite the increased costs, 57 percent of responding employers said they plan to expand their group health plans to comply with health care reform requirements. About two-thirds said it was unlikely that they would reduce financial support for other employee benefits, such as dental, disability and life insurance, while just 27 percent said they would likely cut back on contributions to tax-qualified employee benefits like pensions and 401(k) accounts.

“Respondents also indicated the new requirements will force them to think about their benefits in a strategic manner and as part of the total rewards they use to attract, retain and motivate employees,” Kirschbaum said. More than 2,300 employers responded to the survey, with 69 percent reporting fewer than 500 full-time employees, Willis said.

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Execs say California health care reform inevitable

Health care reform will happen in California regardless of whether the federal Affordable Care Act is upheld by the U.S. Supreme Court , Sacramento-area health care leaders said Friday.

Other panelists were Pat Brady, chief executive officer of Sutter Roseville Medical Center; Garry Maisel, president and chief executive officer of Western Health Advantage;  Ann Madden Rice, chief executive officer of UC Davis Medical Center; Darryl Cardoza, chief operating officer of Hill Physicians Medical Group; and Trish Rodriguez, senior vice president and hospital chief executive officer for Kaiser Permanente in South Sacramento and Elk Grove.

Everyone is affected by the rising cost of health care, including employers, Rodriguez noted. After wages, health care benefits are the second largest operating cost at Kaiser Permanente itself, she said.

Doctors, hospitals and health plans will have to work together to go the same direction, the executives said. And it will take shared resources to get there because trends in health care — regardless of the fate of the reform law — will mean more demands on the industry and lower reimbursements, speakers agreed.

The key will be a switch from a medical rescue system that fixes problems to a health care delivery system that keeps people healthy and provides more care in less-expensive outpatient settings, Cardoza said.

Money is a growing problem: more costs are coming and reimbursement will drop.

  • While more people will have coverage when health insurance exchanges start in 2014, Medi-Cal enrollment is expected to climb. The government health care program for the poor has one of the lowest rates in the nation and reimbursement from Medicare — the government health care program for seniors — is slated for huge cuts.
  • To make ends meet while serving more patients, all parts of the health care system will have to cut costs and be more efficient.

One unknown is the health of the millions of new patients who will get coverage in two years.

  • “We do know these people; they are accessing our health care system now through ERs,” said Rodriguez of Kaiser Permanente. “We have an opportunity to do it in a more controlled environment, and I’d make sure these individuals are seen in primary care physicians’ offices.”

There will have to be more doctors to make that happen.

“If you look at Massachusetts (where universal health care is already in place), it used to take 16 to 18 days for a non-urgent internal medicine appoint,” said Rice of UC Davis Medical Center. “It’s gone one up to six weeks.”

  •  Three-quarters of the counties in California have fewer than 60 primary-care doctors, she said. The UC Davis School of Medicine — and other medical schools — can churn out more doctors, but there aren’t enough residency spots to accommodate them, Rice said.

“The individual market will look nothing like it does today; the small group market will change, too, but not as much,” Maisel said of the industry in 2014.

  • “Now it’s business to business, through brokers. It’s going to be a business-to-consumer model.
  • The buying decision will no longer be at the employer level, but at the individual level.”

Contrary to perceptions that the cost of health care will go down in 2014, Maisel thinks they’ll go up in the short-term because of demand and slow changes to the delivery system.

  • “In 2014, a lot of individuals think they’ll suddenly go out and buy affordable health care,” he said. “I think there will be sticker shock.”

This article is modified from a Sacramento Business Journal Article published March 2, 2012

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Employer-offered health insurance drops to record low

By Kathryn Mayer

The number of Americans getting health insurance from their employer continues to drop, with a record low 44.6 percent getting employer-sponsored coverage in 2011, compared to 45.8 percent in 2010, according to Gallup numbers.

This continues the downward trend Gallup and Healthways have documented for the last few years. In 2008, roughly half of Americans received health insurance from their employer.

Meanwhile, Gallup says, the percentage of Americans who are uninsured has also increased, rising to 17.1 percent this year, the highest seen since 2008.

Increased unemployment is one factor in this trend, but cost and availability are others. Either some workers can no longer afford the rising cost of health insurance the employer offers, Gallup research notes, or simply put, the employer is not offering health insurance any longer.

Additionally, the proportion of the U.S. work force that is composed of part-time workers—a group less likely to receive employer-based health insurance than full-time workers—has increased.

Employer-based health insurance declined among most major population subgroups last year, with the exception of young adults and seniors. It also is down significantly compared with 2008 across all groups.

High-income Americans are by far the most likely to say they get their health insurance from an employer, with 70.4 percent doing so in 2011. Low-income Americans are among the least likely to have employer-based health coverage, at 23.7 percent.

“If this trend continues, it is likely that the percentage of Americans who get their health insurance from their employer will continue to decline,” Gallup reports. “Whether more Americans then become uninsured or are able to gain access to coverage may be largely reliant on the fate of the health care law.”

The Gallup survey was conducted Jan. 1 to Dec. 31, 2011, with a random sample of 353,492 adults. The margin of error is plus or minus 1 percentage point.

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California health insurers to raise average rates 8% to 14%

California’s largest health insurers are raising average rates by about 8% to 14% for hundreds of thousands of consumers with individual coverage, outpacing the costs of overall medical care.

The cost of goods and services associated with medical care grew just 3.6% over the last 12 months nationally, government figures show. But insurance premiums have kept climbing at a faster pace in California.

Insurers defended their rate hikes, saying they are based on their claims experience with the customers they insure and not just the broader rate of medical inflation. They also say that healthier members dropped out of the individual market as premiums rose and the economy worsened in recent years, leaving behind a group of policyholders who have higher average costs.

“We will continue to examine the fundamental issues at the heart of rising healthcare costs, including the prevention of chronic disease, increasing the quality of care and reducing unnecessary health expenses,” said Darrel Ng, spokesman for Anthem Blue Cross, the state’s largest for-profit health insurer.

Consumer advocates and others are skeptical, however, questioning whether insurers are doing enough to hold down costs. These latest increases follow years of 20% to 30% rate hikes for families that are at the center of a looming fight between the insurance industry and its critics over a proposed ballot measure seeking tougher rate regulation.

“Consumers should be outraged that premiums continue to grow faster than underlying costs,” said Gerald Kominski, director of the UCLA Center for Health Policy Research. “There’s help on the horizon for millions of Californians from health reform, but things may get worse before they get better.”

Anthem has proposed raising premiums 9.6% to 13.8% on average, effective May 1 or July 1, for about 700,000 individual policyholders and their family members. The rate increases are under review by state officials.

Nonprofit Kaiser Permanente increased premiums 9% on average for nearly 300,000 customers last month.

Blue Shield of California, also a nonprofit, is boosting average rates by 7.9% for 265,000 members and by 8.9% for 56,000 members, both effective March 1.

Insurers in California must submit proposed rate hikes for review to determine whether they meet certain state requirements, but state officials don’t have the authority to reject rate hikes for being unreasonable. But regulators have been challenging insurers’ arithmetic in calculating rates.

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Annual PCIP Member Claims Average $28,994 – Will this be the trend after 2014?

The Pre-existing Condition Insurance Plan (PCIP) — a new health insurance program for people with health problems — ended 2011 with 48,879 enrollees. The consumers who have enrolled have turned out to be far sicker than officials had anticipated: Enrollees are averaging about $29,000 in claims per year. That’s twice the average traditional state high risk pools have experienced in recent years, officials say. Many PCIP participants need treatment for conditions such as cancer, ischemic heart disease, degenerative bone diseases or hemophilia.

People who enroll in the PCIP program are not charged a higher premium because of their medical condition. Premiums may vary only on the basis of age, geographic area and tobacco use. The Affordable Care Act of 2010 (PPACA) requires health insurers to sell subsidized coverage on a guaranteed issue, mostly community-rated basis starting in 2014.

Officials say that other program features may contribute to high per-member medical costs. “Coverage related to the care or treatment of an enrollee’s pre-existing condition begins immediately upon the plan’s effective date, unlike other types of insurance coverage currently available in the individual market, which may impose pre-existing condition limits or exclusion periods,” officials say.

  “PCIP may attract individuals who have been recently diagnosed with a severe illness or condition that requires immediate care or treatment”.  “Additionally, people who may otherwise qualify for PCIP may postpone enrolling until they have an immediate need for coverage.”

*This article is modified from a Life Health Pro article by Elizabeth Festa

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PPACA-Based Age Rating Pinch Could Leave a Million More Uninsured

Whatever states do about health insurance prices for older and younger adults, one thing remains certain: it will be unlikely to please everyone.

If a state chooses to eliminate age rating in an attempt to be kinder to consumers ages 45-64, it could decrease premiums by about 13% (to $8,300) for people in that age group who earn more than 400% of the federal poverty level, and it could decrease the total uninsurance rate in that age group to 6.6%, from 7.6%, or by about a million people, the researchers say.

But eliminating age rating would increase rates by 22% for relatively high-income consumers ages 18 to 34 and increase the uninsurance rate for those consumers from 9.9% to 10.6%. Moreover, the overall uninsurance rate for nonelderly adults might increase from 26.2% to 27.2%, the researchers say.

Frederic Blavin and his colleagues at the Urban Institute in Washington, D.C., have published data on how efforts to keep or eliminate age-based pricing differences might affect U.S. residents. The researcher published their data, in Health Affairs, an academic journal that focuses on the finance and delivery of health care. The researchers discusse the choices states will have before them should the Patient Protection and Affordable Care Act of 2010 (PPACA) be implemented as written.

Mired in controversy, legal wrangling and political argument since its signing into law in 2010, PPACA faces a multiple-front effort to get the law repealed outright in Congress, as well as to have it overturned in the Supreme Court. Oral arguments before the Supreme Court over the constitutionality of PPACA’s individual mandate begin in March.

However, if PPACA survives these efforts to undo the law, and if PPACA is fully implemented on schedule (by 2014), it will create, among other thing, a Small Business Health Options Program (SHOP) exchange system for small businesses and another exchange system for individuals. Exchanges are no-frills online venues consumers can use to buy health insurance; each state must set up its own exchange by 2014 or let the federal government provide exchange services for its residents. The exchanges are supposed to help individuals meet new PPACA health insurance ownership requirements.

Individuals with incomes under 400% of the federal poverty level will be able to use new tax subsidies to buy coverage through the exchanges, and many small businesses will qualify for a 2-year health insurance purchase subsidy.

Insurers will have to see coverage on a guaranteed-issue, mostly community-rated basis, but the researchers point out that states will have the authority to let health insurers charge the oldest consumers in the individual market a three times what they charge the youngest adults.

States also will be able to choose whether to merge their individual and small group markets, and, until 2016, they will be able to decide whether a “small group” is an employer group with 50 or fewer workers or 100 or fewer workers.

The researchers used a simulation model they have developed to predict how various decisions might affect the cost of coverage and who has what type of coverage.

The researchers found that the choice of small-group cut-off has little effect on how the health insurance market performed in their simulations. Groups with 50 to 100 lives would, for example, have little incentive to buy coverage through an exchange, the researchers say.

Merging the individual and small group markets seems likely to lower individual market rates without having much effect on small group rates, the researchers report.

Merging the markets might cut prices about 10% for individuals who buy through an exchange and about 8% for individuals who coverage outside the exchange system while leaving small group prices unchanged, the researchers say.

Because merging the markets could lower prices for some without having a significant impact on the rates that others pay, that change could increase the percentage of insured U.S. residents from 90.2% to 90.6%, the researchers say.

 

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Obamacare architect: Expect steep increase in health care premiums

Medical insurance premiums in the United States are on the rise, the chief architect of President Barack Obama’s health care overhaul has told The Daily Caller.

Massachusetts Institute of Technology economist Jonathan Gruber, who also devised former Massachusetts Gov. Mitt Romney’s statewide health care reforms, is backtracking on an analysis he provided the White House in support of the 2010 Affordable Care Act, informing officials in three states that the price of insurance premiums will dramatically increase under the reforms.

In an email to The Daily Caller, Gruber framed this new reality in terms of the same human self-interest that some conservatives had warned in 2010 would ultimately rule the marketplace.

“The market was so discriminatory,” Gruber told TheDC, “that only the healthy bought non-group insurance and the sick just stayed [uninsured].”

“It is true that even after tax credits some individuals are ‘losers,’” he conceded, “in that they pay more than before [Obama’s] reform.”

Gruber, whom the Obama administration hired to provide an independent analysis of reforms, was widely criticized for failing to disclose the conflict of interest created by $392,600 in no-bid contracts the Department of Health and Human Services awarded him while he was advising the president’s policy advisers.

Gruber also received $566,310 during 2008 and 2009 from the National Institutes of Health to conduct a study on the Medicare Part D plan. (RELATED: Full coverage of the health reform law)

In 2011, officials in Wisconsin, Minnesota and Colorado ordered reports from Gruber which offer a drastically different portrait in 2012 from the one Obama painted just 17 months ago.

“As a consequence of the Affordable Care Act,” the president said in September 2010, ”premiums are going to be lower than they would be otherwise; health care costs overall are going to be lower than they would be otherwise.”

Gruber’s new reports are in direct contrast Obama’s words — and with claims Gruber himself made in 2009. Then, the economics professor said that based on figures provided by the independent Congressional Budget Office, “[health care] reform will significantly reduce, not increase, non-group premiums.”

During his presentation to Wisconsin officials in August 2011, Gruber revealed that while about 57 percent of those who get their insurance through the individual market will benefit in one way or another from the law’s subsides, an even larger majority of the individual market will end up paying drastically more overall.

“After the application of tax subsidies, 59 percent of the individual market will experience an average premium increase of 31 percent,” Gruber reported.

The reason for this is that an estimated 40 percent of Wisconsin residents who are covered by individual market insurance don’t meet the Affordable Care Act’s minimum coverage requirements. Under the Affordable Care Act, they will be required to purchase more expensive plans.

Asked for his own explanation for the expected health-insurance rate hikes, Gruber told TheDC that his reports “reflect the high cost of folding state high risk pools into the [federal government’s] exchange — without using the money the state was already spending to subsidize those high risk pools.”

Gruber’s Wisconsin presentation, previously available on the website of Wisconsin’s Office of Free Market Health Care, disappeared from the state government’s Web servers shortly after Wisconsin Gov. Scott Walker issued a Jan. 18 executive order scrapping the agency’s mission.

Minnesotans have already seen a 15 percent average rate increase because their state government is spending approximately $100 million to subsidize those high-risk pools. Gruber said they, too, will see a premium increase — even after subsidies are factored in.

In his presentation there in November, he estimated 32 percent of Minnesotans will face premiums hike similar to those of their neighbors in the Badger State.

In his Colorado analysis, which he delivered last month, Gruber wrote that while some may benefit from new tax credits folded into Obama’s health care overhaul, “13 percent of people will still face a premium increase even after the application of tax subsidies, and seven percent will see an increase of more than ten percent.”

Sally Pipes, president of the Pacific Research Institute in San Francisco, told TheDC that the health care law’s mandates will ultimately result in far greater costs across the board.

“If [instead] we change the tax code and allow a competitive market to build, and put doctors and patients in power, then that would really solve a lot of the problem,” Pipes said.

Pipes said she believes applying the Affordable Care Act, as written, will result in care “being rationed and more expensive.

South Carolina Republican Rep. Trey Gowdy, who chairs the House Subcommittee on Health Care, told TheDC that consumers are beginning to understand that the president’s 2010 promises are out of sync with reality.

“What a shock,” Gowdy said, feigning surprise. “Obamacare doesn’t lower costs, doesn’t increase coverage, and has turned into a wildly unpopular, labyrinthine government overreach.”

“’If you like your health insurance, you can keep it’ has morphed into ‘I, President Barack Obama, will decide what you need and make others pay for it.’”

White House deputy press secretary Jamie Smith was unable to immediately respond to a request for comment.

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Researcher: Discourage Small Groups from Reinsuring

A health law specialist says states can keep small employers with younger, healthier employees from abandoning the insured plan market in 2014 by limiting the small employers’ ability to self-insure.

Mark Hall, a public health law professor at Wake Forest University, makes that argument in a commentary in the new issue of Health Affairs, an academic journal that publishes articles about the finance and delivery of health care.

The latest issue includes many articles on how the Patient Protection and Affordable Care Act of 2010 (PPACA) might affect small groups.

PPACA is supposed to start requiring health insurers to sell small group coverage on a guaranteed issue, community-rated basis starting in 2014.

If the law takes effect on schedule and works as drafters expect, some small employers will be able to use federal tax subsidies to buy coverage through a new system of health insurance distribution exchanges, and, in some cases, small employers’ employees may be able to use tax subsidies to buy individual coverage through the exchanges.

Today, many small employers hold down coverage costs by buying plans with high deductibles or limited benefits. PPACA will put limits on small employers’ ability to use benefit design to hold down costs, because PPACA will require insured plans to cover at least 60% of the actuarial value of a standardized “essential health benefits” package, Hall says.

PPACA does not provide any new subsidies for individuals paid over 400% of the federal poverty level, or about $89,000 per year, or for small employers with many highly paid employees.

PPACA requires insurers to spend 80% of small group revenue on health care and quality improvement efforts, but the law sets no limits on small group rates.

The PPACA small-group community rating rule may help small employers with sick employees get cheaper coverage, and it might reduce insurers’ administrative costs, but it gives small employers with younger, healthier employees an incentive to try to avoid subsidizing the insurance of employers with older, sicker employees, Hall says.

“Community rating, along with other [PPACA] market reforms, will founder or fail, however, if younger or healthier groups can easily avoid reforms by self-insuring,” Hall says.

“Self-insurance threatens not only the integrity of market regulations but also consumer protection,” Hall says. “For example, stop-loss coverage is not subject to any requirement of guaranteed renewability. Nor can self-insured employers use normal appeals channels for coverage denials.”

Many employers that self insure, and most small employers that self insure, use stop-loss arrangements — insurance for health plans — to limit their exposure to catastrophic losses.

Hall says states could keep small employers from leaving the insured small group market by banning stop-loss for small employers, limiting the comprehensiveness of stop-loss coverage, or applying the same rules to stop-loss coverage that they apply to the primary coverage. North Carolina already regulates small group stop-loss programs the same way it regulates ordinary small group health insurance, Hall says.

“This regulatory approach preserves small employers’ ability to select either purchased or self-funded insurance,” Hall says. “Its main effect is to ensure that the choice is not driven principally by the group’s risk profile or the employer’s desire to avoid health benefit regulation.”

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