By Dr. Merrill Matthews
Alexandria VA -- Critics are up in arms over Americas Health Insurance Plans (AHIP) daring to speak the truth about the Senate health care reform proposal and we applaud the organizations efforts.
If anything AHIPs analysis of health premium increases is too low. Supporters of the health bills are simply ignoring years of states evidence of many of these proposed Senate and House health reforms.
Last May CAHI released a report
Should We Abandon Risk Assessment in Health Insurance? from our consulting health actuaries estimating the cost- increasing impact of several health insurance reform options. It found that the cost of a policy in the individual market (i.e. non-group) with an individual mandate guaranteed issue and some form of community rating -- all of which are in the Senate and House plans -- would drive up the cost of a policy between 65 percent and 95 percent within a few years -- not 2019.
And a plan with no mandate -- which the president initially backed -- would more than double the cost of a policy. Relaxing the penalty as the Senate Finance bill has done moves the legislation closer to the no- mandate category.
While AHIP looked at the entire private market (i.e. group as well as individual policies) CAHI only considered the individual market. But it is important to note that the group market is already essentially a guaranteed issue market. Companies must cover new employees regardless of their health condition.
So while the Senate bill will have an impact on the group market the most dramatic increases will come in the individual market where insurers in most states are still allowed to underwrite policies.
Moreover the CAHI study was published before anyone considered imposing excise taxes on the more costly -- they arent necessarily gold-plated -- plans. And there will likely be even more cost shifting to the private sector if the legislation cuts reimbursements and pays doctors close to Medicare rates.
In sum both the House and Senate bills will lead to a dramatic rise in health insurance premiums especially in the individual market. And particularly for younger healthy people. This isnt speculation. Its already happened in the states that have adopted guaranteed issue and community rating. Just
compare prices in the individual market in Massachusetts with most other states; the premiums are roughly double.
CAHI does not support an individual mandate.
We think that more competition fewer regulations and subsidies for low-income families will lower health insurance costs and expand coverage.
But the evidence of the damage the current proposals will cause is there if the administration and the media will only look.
For more on what similar measures have done in the states see:
Destroying Insurance Markets
Dr. Merrill Matthews is Executive Director of the Council for Affordable Health Insurance (CAHI). Founded in 1992 CAHI is a nonprofit nonpartisan research and advocacy association whose mission is to promote access affordability and choice in American health care.
Website:
http://www.cahi.org
