Okay, so I am being a tad dramatic here, but Rush Limbaugh would be proud. I want to get your attention so you read some facts about premium increases.
According to new HHS regulations, a health insurance premium increase of 10% or more should trigger a review at the state level, if not the federal level. In addition, there needs to be more transparence about these rate increases so the public knows what is going on. Keep in mind that during the health care reform debate the main target of the Administration was insurance companies, they were chastised and criticized for discrimination, abusive practices and outrageous premium increases. The debate boiled down to making the public see insurance as the culprit for all that is wrong with our health care system from intervening between the patient and doctor, to denying coverage to high cost.
What better way to keep this myth alive and to divert attention from growing health care costs (because health reform does little or nothing to actually control costs) than to put premium increases in the spot light.
Let us consider the facts. The average trend rate for healthcare costs is about 9% give or take a percentage. This means health care costs are increasing at nine percent per year. In addition, PPACA mandates, such as accepting individuals with pre-existing conditions, increase premiums from one and one half to two and a half percent on top of trend. These additional amounts do not include cost shifting resulting from additional fees, taxes, etc. on healthcare providers and vendors. This means that an eleven percent increase or more is largely out of the insurance company’s control. Thus, it is a foregone conclusion that the majority of rate increases will be at 10 or above percent simply based on escalating healthcare costs, elimination of underwriting rules and benefit mandates.
Given these facts, why was ten percent picked by HHS as the point at which “unreasonable” kicks in? Surely, the experts at HHS know what the health care trend is and that PPACA adds costs to health care. They also know that the public is largely focused on premiums as the cost of health care because most people are insulated from the true cost. In addition, they know that insurance companies are an easy target (much like the “wealthy”}.
The penalty for seeking unreasonable premium increase is exclusion from the health insurance exchanges starting in 2014, once again diverting attention away from the real issues surrounding our health care system and in the process perhaps limiting choices.
Let’s recap, what unfortunately are “normal” premium increases may be unreasonable, asking for an “unreasonable” premium increase may get you excluded from state health insurance exchanges, which may put you out of business. The irony is that with all insurers now playing under the same federal rules, their only edge is to complete on lower premiums if they want business from the other guy. HHS must think you are going to buy insurance from the most expensive insurance company. On the other hand, HHS may be trying to find a way to explain the fact that after health care reform will not control costs and that by 2014 premiums will have continued to escalate at substantial rates.
By golly, it is a bloody plot (just kidding…I hope).
Related Articles
- “HHS wants to force health insurers to justify all rate hikes over 10%” and related posts (ifawebnews.com)
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