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Friday, Aug. 22, 2014

Don't blame exorbitant insurance rate increases on health care reform

Monday, September 13, 2010

During a visit to Western Nebraska over the Congressional break I met with a group of business people, one of whom was upset over an increase in his health insurance premium, which he blamed on the new health care reform law.

I quickly pointed out that most of the health bill won't take effect until 2014. The increase his insurance company notified him about is more than likely a continuation of what has been happening with premiums for the past few years.

From 2001 to 2007, premiums for family insurance coverage increased 78 percent. Before health reform passed, premiums were predicted to nearly double in the next 10 years. So, what people are seeing today is just a continuation of the soaring costs of health care. Health reform will hold those costs down when it's fully in effect.

Unreasonable Premium Increases

The Wall Street Journal recently wrote about this, pointing out that some health insurance companies are blaming the Affordable Care Act for premium increases that were planned long before the law was passed.

These premium increases show that reform came at a critical time. When reform is fully implemented, many experts expect costs will be reduced across the board, meaning premium increases like we're seeing will need to be justified to consumers.

The new law also empowers States to prevent unreasonable increases and next year the law requires insurance companies to publicly justify any unreasonable premium increases by posting them on their websites.

In 2011, the law also requires companies to spend at least 80 percent of premium dollars on health care instead of overhead, salaries, administrative expenses and profits.

Health Care Reform Makes Insurance More Valuable

Beyond premiums, we need to remember that the law will help consumers by making their insurance more valuable. The health care reform law stops insurance companies from egregious practices like dropping individuals once they get sick and imposing annual and lifetime limits on benefits.

Children will be permitted to stay on their parents' plans until age 26, which many companies started to do this summer. The parents of college age children will tell you how important this provision is.

Whatever small insurance premium increases are owed to the Affordable Care Act, it would be from eliminating these most egregious insurance practices that simply padded insurers' profits and made insurance less valuable.

Preventive Care in Health Reform

The health care law also provides that all newly issued, non-grandfathered plans, must include first-dollar coverage for preventive care, which will result in healthier populations who use less costly acute care down the road.

Preventive care would include things like blood pressure, diabetes, and cholesterol tests; many cancer screenings; routine vaccinations; pre-natal care; and regular wellness visits for infants and children.

The bottom line is that health reform is making insurance better. In the long term, when the coverage expansions kick in, the more people insured will work to level out or reduce premiums.


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