More Predictions of Rate Shock Because of the New Health Law

Last week, I reported on my informal survey of health insurance companies and their estimate for how much rates will rise on account of the Affordable Care Act ("Obamacare").

Today, there are press reports quoting the CEO of Aetna with their estimate. The Aetna estimate is worse than mine.

From Bloomberg:

Health insurance premiums may as
much as double for some small businesses and individual

The Affordable Care Act: Ten Months to Launch "Obamacare"––Get Ready for Some Startling Rate Increases

What will health insurance cost in 2014?

Will the new health insurance exchanges be ready on time or will the law have to be delayed?

There Will Be Sticker Shock!
First, get ready for some startling rate increases in the individual and small group health insurance marketplace due to the changes the law dictates.

In a November 2009 report, the CBO estimated that premiums in the individual

The Feds Will Administer the Insurance Exchanges for Twice What it Costs to Administer Medicare

The Obama administration just released another set of regulations, the "Draft Notice of Benefit and Payment Parameters for 2014."

Among many other things in the 373 pages, they have announced their proposed assessments to cover the cost of running the federal exchange.

In order for the feds to administer the new insurance exchanges, they have proposed a fee of 3.5% of premium on each insurance

Will Many of the Smallest Employers Circumvent the Affordable Care Act by Using Self-Insurance?

Not surprisingly, only about 10% of firms with fewer than 200 workers take advantage of self-insurance––and almost no very small groups (fewer than 50 workers) use the product. It just isn't worth it for these small employer groups to take the risk that they will either have too many claims or very big claims from their workers––that is what insurance companies are for.

Already, 96% of workers

What Would Individual Health Insurance Cost if the Court Strikes the Mandate Down and Still Requires Insurers to Cover Everyone?

With the Supreme Court justices sounding like they might strike the mandate down, this is a question I've been getting a lot lately.I have pointed to New Jersey as a real life example of what can happen when insurance reforms take place but there is no incentive for consumers to buy it until the day they need it.In 1992, New Jersey passed health insurance reform that required insurance carriers

If the Supreme Court Overturns the Individual Mandate

First, trying to predict how the Court will rule is at best just speculation. I know what Justice Kennedy said both today and yesterday and it certainly doesn’t look good for the Obama administration and upholding at least the mandate.But I will remind everyone, based upon oral arguments, most Court watchers expected a ruling in favor of the biotech industry on a recent case involving health care

The 300 Page MLR Rules—About as Valuable as Taking Your Shoes Off at the Airport

This whole medical loss ratio (MLR) provision in the new health care law is a fool’s errand. When it comes to controlling health care costs it is about as productive as taking your shoes off at the airport is valuable at improving air travel security.Without a doubt, the new health care law does far too little toward making health care costs affordable. And, marginal health insurance carriers

The Senate Finance Insurance Reform Rules Have to Be Fixed in Spite of the Gang That Can’t Shoot Straight

Last week the health insurance trade association (AHIP) released a report it sponsored, and was authored by PricewaterhouseCoopers (PwC), that claimed the Senate Finance bill would be problematic for the insurance markets only leading to much higher costs.As I posted last week, my own analysis of the Finance bill gives me big concerns about what it would do to health insurance costs and the

What’s Next? Follow the Money

With the passage of the Senate Finance bill the health care effort now moves to a critical stage with the Senate Majority Leader and the House Speaker now clearly in charge.The more important effort will be Reid’s. Pelosi’s final product will be more predictable (very liberal) but Reid’s will have to be more practical. Every inch Reid moves away from the more moderate Baucus bill will cause

The Senate Finance “Cadillac” Health Insurance Excise Tax Collects Almost Five Times More Revenue in 2019 Than It Does in 2013

Critics of the Pricewaterhouse Coopers (PWC) report on the Senate Finance bill have been making the argument that the analysts are not giving credit for the changes in behavior the bill would create. In short, the notion that, for example, insurers would pass on billions in taxes on high cost health plans to customers is flawed because the Baucus bill would provide the incentive to lower the cost

The Senate Finance Health Bill Has No Clothes

Readers of this blog know that I have lots of concerns for the Senate Finance health bill primarily because it does not so much represent health care reform as just an expensive entitlement expansion.Readers also know the insurance lobby--AHIP--is not one of my favorite organizations.But I will tell you the report by Pricewaterhouse Coopers (PwC) commissioned by the AHIP and released this morning

The Democratic Health Care Bills Could Be A Disaster for the Insurance Pool

With Baucus gutting his fine for not having health insurance there would be no reason for people to buy it. In 2013, for example, there would be no fine for not having insurance. By 2014 the penalty would be $200 per adult and it would rise to $400 in 2015, $600 in 2016, and $750 by 2017. Coupled with the expectation middle class families would have to pay $6,000 to $10,000 a year for insurance

The Health Reform Bills Would Be Great For the Business Of Health Care

Have you noticed how none of the big health care business special interests is running any negative health care reform ads? Why should they when each is poised to gain billions of dollars from it?As President Barack Obama has said many times, any health care bill that costs about $1 trillion would be paid for, roughly half and half, with savings in the health care system and new revenues (taxes).

Will Eliminating Medical Underwriting and Merging the Small Group and Individual Market Into a New Insurance Exchange Work? Lessons From Massachusetts

Creating a universal system of health insurance is everyone’s objective. But even if we pass an expensive health care bill in 2009 we won’t achieve it. We just don’t have enough money to cover everyone. Maybe, in the most expensive proposals, we would make it possible for 90% to be covered. In others, far less.The problem is that without an absolutely seamless system there will still be people

Little Ado About Nothing—Part Deux

Last November, the insurance industry offered to do away with pre-existing conditions limitations. This week the health insurance trade associations have also offered to phase-out the practice of varying premiums based on health status in the individual market.From their letter to Congress this week:Specifically, by enacting an effective, enforceable requirement that all Americans assume

AHP Announces a Health Care Reform Initiative and Tells All of the Other Stakeholders What They Ought to Do

I'd like to propose a new health care reform rule.You can't announce health care reform proposals unless Part 1 of your plan first tells us just what it is your side is going to sacrifice for the effort.I don't know about you, but I am getting tired of one vested interest after another in the health care system telling the others what it is they have to do to fix the system. Everyone has to

Watch the Wyden-Bennett "Healthy Americans Act"--It Could Be the Place Health Care Reform Compromise Takes Place in 2009

Health care reform will be hard to do after the November election. I've even called it a long-shot.Polls clearly show the voters split evenly between the Democratic and Republican approach to health care reform. I can't tell you who will win the presidency but I am willing to make the bold statement that it will be a close election and neither very different approach to health care reform will

Haley Barbour or Hillary Clinton?

Here's a test.Who just proposed the following, Hillary Clinton or Haley Barbour:A government authorized health insurance purchasing exchange program for the purpose of marketing health insuranceRun as a not-for-profit clearing house from which consumers could purchase health insuranceTarget the uninsuredAvailable to workers in small businessesDesigned to reduce the overhead costs of small group

California Insurers Lose a Big Court Case In the Health Insurance Policy Rescission Controversy

Here's one for a Harvard Business School case study: A few months before voters in the state are going to decide the future of your industry get into a losing battle about retroactively canceling sick peoples' health insurance policies.A unanimous California Appeals Court decision has decided that California health insurers have a responsibility to check the accuracy of applications for health

The Shadegg Bill––A “Health-Insurance Solution” That Is a Waste of Time

Merrill Mathews, writing on yesterday’s Wall Street Journal op-ed page, asks why Representative John Shadegg’s (R-AZ) “Health Care Choice Act” isn’t a “no-brainer” for the Congress to pass.Shadegg’s proposal would enable consumers to buy a health insurance policy in any state thereby bypassing the states with the most costly benefit mandates. At the top of his costly mandate list are state “