Sticker Shock' Ahead on Health Insurance

[mikesimon]

'Sticker Shock' Ahead on Health Insurance
By David Pittman, Washington Correspondent, MedPage Today
Published: February 05, 2013

WASHINGTON -- Separate surveys released this week give dramatically different outlooks for two groups of people under the Affordable Care Act (ACA): the young, healthy worker and the part-time worker.

Premiums for a healthy, nonsmoking, 27-year-old in a "bronze" -- or relatively inexpensive -- small-group or individual policy would increase on average by 169% in five markets in 2014, a survey of major health insurers by the conservative American Action Forum (AAF) found.

Meanwhile, premiums for an unhealthy, 55-year-old smoker in a more generous gold-rated policy would decrease by 22%, on average, in those same five markets in 2014.

"The results surveyed above indicate that there will be massive sticker shock to the relatively young and healthy in both the small group and individual markets," the AAF report said. Those increases essentially subsidize the ACA mandated coverage of sicker individuals and limits on variations in premiums between groups of insured such as men and women, the report noted.

ACA mandates coming in 2014 include the mandate for individuals to purchase insurance; minimal coverage requirements for insurers; coverage of pre-existing conditions for adults; limits on premium variation based on age, gender, health status, or group size; new fees and taxes; and other new rules.

The AAF sought to understand how these changes would play out in different markets. It sent a survey to an unspecified number of major insurers and asked them to forecast the ACA's impact on small-group and individual plans in six cities.

Results showed premiums would increase for young, healthy individuals by an average of 190% in Milwaukee and 157% in Phoenix -- the city with the lowest increase for the group.

To put a dollar amount on that, the average current monthly premium in Chicago, Phoenix, Atlanta, Austin, and Milwaukee is $2,047 for young, healthy workers in a small-group plan. The AAF survey found it will jump to around $5,124 in 2014 with the ACA changes.

However, premiums would drop 32% for older, less healthy individuals in Austin, Texas, the largest drop for the surveyed cities, and by 15% in Milwaukee, the smallest drop for a city.

Premiums for older, less healthy workers in a small-group plan in those same five cities would drop from $14,534 today to $10,706 next year, the AAF survey found.

Both groups of enrollees would be helped economically in some cases by federal tax credits available for those making between 100% and 400% of the federal poverty level, if they purchased insurance through a health insurance exchange.

"By eliminating or constraining these 'rating factors' that result in the variation in today's market, the ACA in 2014 increases the premium for the young and healthier and lowers the premium for the older and sicker," the AAF survey said. "The same would be true if there were a law reforming automobile insurance."

The AAF survey didn't specify which health insurers participated in its survey but did say it wouldn't have published results without at least four respondents for each city. Albany, N.Y., was the only city it asked about whose results weren't published.

A separate survey from the ADP Research Institute, also released this week, says the ACA's penalties for employers to offer coverage to employees could result in more of today's part-time workers receiving coverage.

"The shared responsibility provision of the ACA may result in employees who are currently classified as part-time being reclassified as full-time, meaning the employer must offer coverage to those employees or face a potential penalty," ADP's 2012 Study of Large Employer Health Benefits said.

In 2012, 23% of all employee positions were classified as part-time and only 15% of those were eligible for benefits, the survey found. The survey was based on roughly 300 companies with at least 1,000 employees.

The ACA mandates that any employee working at least 30 hours per week, or 130 hours per month, must be offered employer-sponsored health coverage that meets certain requirements if the business employs 50 or more full-time workers.

"The ACA will require employers to extend health coverage to more part-time employees, and employers need to carefully consider the best approach for their organization," the report stated.

On Monday -- the same morning the AAF released its survey -- Health and Human Services Secretary Kathleen Sebelius said the government must reach out to young people currently uninsured who may not know they can gain federal assistance to buy coverage through a health insurance exchange or marketplace. Young people are particularly tough to reach, she noted.

"If we're going to fulfill the full promise of the Affordable Care Act and insure millions of Americans, we need to reach these people," Sebelius said Monday.

http://www.medpagetoday.com/Washington-Watch/Reform/37205

[brice1967]

How is you saying "lack of reading skills" not an insult?

[teko]

No insults about it. You lump everyone into the same category and that is not fair, nor is it true. Your and my taxes go to pay for those on the system, not just yours. Secondly, if you read what I wrote I said we lost our employer based healthcare when the recession hit. My husband still works for that employer and I am still working in what I do because we have to. Since there are so few employees now, the employer is not obligated to carry insurance. This is where the aca will help. We will be able to purchase from the new exchanges being set up.

As far as the statement:

I believe that some of the current (and future) cost of health care is directly attached to the fact that some people are not paying for health care, whatsoever.  There are people here that go to the emergency room, get treatment and walk away from the bill.  When that happens, the cost of medical services go up.  You can take offense to that!  I certainly do.  When I go to the doctor and pay my bills, I get to pay more because some people aren't paying at all.  That is offensive....

I feel the same way you do, and is precisely why I think that single payor or universal healthcare is the ultimate answer, but in the interim, more pools being made by the mandated carry for all does not seem so unfair to me.

And if it does to you, then you would agree that the answer is universal?

[brice1967]

And insults?  Come on now....

[brice1967]

Dear teko,

You go back up and read what you wrote.  The first words out of your mouth were "brice, that is downright offensive".  It's my opinion.....  I am entitled.

I believe that some of the current (and future) cost of health care is directly attached to the fact that some people are not paying for health care, whatsoever.  There are people here that go to the emergency room, get treatment and walk away from the bill.  When that happens, the cost of medical services go up.  You can take offense to that!  I certainly do.  When I go to the doctor and pay my bills, I get to pay more because some people aren't paying at all.  That is offensive....

Love
bricey

[orphanedhawk]

I heard a good discussion on the radio about the plan. It seems like the bureaucratic costs of medicare are 3%, the bureaucratic costs of health insurance is 30%. The problem with the healthcare program is that big fat middle man, the insurance companies.
I have no idea how to fix the problem now, but thought I'd toss that tid-bit in as food for thought.

[Barb135]

"If you walk into a new job, having NO lapse-in-coverage (you were carrying private insurance, or had COBRA, right up to the point of new employment), there's a 30-day waiting period, for ALL coverage, pre-existing or not (then you're covered 100%)."  Not true --- I've never had to wait 30 days for coverage, when going from one job to another, with no lapse in coverage.

"The biggest misconception over National Health Care is this belief that the gov't interferes someone. They don't."  I think we've talked about this before; we have several members on the thyroid forum from Canada and they are refused the most basic and important of all the thyroid tests. Maybe different areas have different policies or something?

"I still see this as the "haves and have nots".  If you have money, you'll pay dearly... if you have little money.... don't sweat it.  Everyone else is paying."  Couldn't agree more, as I see this in my own family.  I and hubby pay dearly for our insurance; others who have no money, don't sweat, because we pay........