Another Data Point

by Dave Schuler on April 8, 2014

A study conducted by Morgan Stanley has found that healthcare insurance premiums are rising fast in the individual and small group market:

Health insurance premiums are showing the sharpest increases perhaps ever according to a survey of brokers who sell coverage in the individual and small group market. Morgan Stanley’s healthcare analysts conducted the proprietary survey of 148 brokers. The April survey shows the largest acceleration in small and individual group rates in any of the 12 prior quarterly periods when it has been conducted.

The average increases are in excess of 11% in the small group market and 12% in the individual market. Some state show increases 10 to 50 times that amount. The analysts conclude that the “increases are largely due to changes under the ACA.”

The analysts conducting the survey attribute the rate increases largely to a combination of four factors set in motion by Obamacare: Commercial underwriting restrictions, the age bands that don’t allow insurers to vary premiums between young and old beneficiaries based on the actual costs of providing the coverage, the new excise taxes being levied on insurance plans, and new benefit designs.

These increases are on top of those reported earlier in the year. It seems reasonable to suspect that large group premium prices will rise, too, if they ever stop being grandfathered in.

I think we should also consider the possibility that as premiums rise while fewer and fewer people are covered under self-insurance plans effectively giving breaks to the largest companies in the country will become increasingly difficult to justify politically.

{ 9 comments… read them below or add one }

jan April 8, 2014 at 2:08 pm

The end of that short piece cited these numbers as well, per a few states:

For the small group market, among the ten states seeing the biggest increases are: Washington 588%, Pennsylvania 66%, California 37%, Indiana 34%, Kentucky 30%, Colorado 29%, Michigan 27%, Maryland 25%, Missouri 25%, and Nevada 23%.

Like so much of the rosy propaganda encountered in the passage of the PPACA, the reality of it’s implementation has fallen way short for many people. The two major reasons to even impose such massive, contentiously-derived HC legislation onto this country was to stem high costs and increase HC access to those not having HC insurance.

However, one of the major causes for increased costs, HC litigation, was not even addressed in this legislation. As for helping the poor’s access to medical care, all that has been achieved is a complicated system spitting out insurance cards, giving people, at best, a spartan menu of health care choices. It also burdens an already fiscally unsustainable, overloaded, poorly serviced medicaid system, whose complicated rules /regs, unrealistic reimbursement payments have alienated many physicians/hospitals from engaging in the PPACA exchanges, creating even more gaps in medical care, along with mind-boggling confusion about the future of healthcare management.

But, such an ill opinion of this law continues to be interpreted as ‘sour grapes,’ by those crowing about it, saying ‘We won. Suck it!” I kind of shake my head, though, at this kind of gladiator glee regarding something so vital to an individual’s core welfare. IMO, salvaging what is good about our health care system, while, at the same time, incrementally correcting and improving on what it lacks, is not a game of winners and losers. Rather, such an all-encompassing task should be a bi-partisan endeavor — one that parks politics at the curb in attempting to mend glaring weaknesses, as well as keeping a mindful eye on doing little harm to those voicing satisfaction with their already established HC plans and services.

Nonetheless, no matter who says what, each person will assess the PPACA according to their own criteria of what is considered a success or not. The polls continue to indicate the majority steadfastly don’t approve of this legislation. However, the upcoming elections will be an even greater opportunity to register the public-at-large feelings about the PPACA, as well as how they like being governed by a social progressive agenda.

PD Shaw April 8, 2014 at 4:08 pm

Looking through the most recent Louisiana poll, I saw some interesting background questions about their healthcare experience. It looked like around 72% said that they had not personally experienced any change to their healthcare insurance they attributed to the ACA, and while those that had experienced changes were allowed to give multiple explanations, I estimated that about 3.3% said the changes were positive and 14.6% said the changes were negative.

I thought it was interesting snapshot with a large majority unaffected either because they have Medicare or large-employer sponsored insurance, but then we have those in the most disrupted area of the market, finding the changes largely negative. Though I probably need to confess that the 1 or 2 percent that are insured for the first time might deserve more weight than the person whose lost their doctor.

But its a long way of wondering, why the heck would the 72% or so want the disruption?

Dave Schuler April 8, 2014 at 4:38 pm

But its a long way of wondering, why the heck would the 72% or so want the disruption?

That question has been asked since the PPACA was enacted into law. More to the point, why would Congressmen vote it into law?

There are multiple possible answers. One is that they didn’t but they really wanted to give the president a major coup. It might be that some Congressmen were desperately worried about that one or two percent.

My own answer is that that Congressional Democrats have been trying to enact something they could reasonably characterize as major healthcare reform (although what was passed reformed insurance rather than care) for the last forty years. For the first ten or so years they were prevented primarily by other Democrats. Nixon made some proposals for reform that, presumably, today’s Democrats would drool over which were defeated largely for partisan reasons.

Ted Kennedy proposed a “Medicare for All” bill that was knocked down by Jimmy Carter.

By this point I think the Congressional Dems are on autopilot on this subject.

steve April 8, 2014 at 6:02 pm

Cannot find link to original study.

Steve

jan April 8, 2014 at 6:05 pm

Whether it’s healthcare, inequality issues dealing with gender, class or race, this administration of social progressives seem to distort the stats, facts and so on for political purposes. It’s all about check mating their opponents and gaining advantage for the next election cycle. I really don’t see a common good purpose in their actions, even though their speeches are worded in the most emphatic and empathetic ways possible to grab various constituencies into their political fold.

steve April 9, 2014 at 2:02 pm

As I noted on Doug’s post, still cannot find the original. As reported, this has two classic red flags and should be taken with great skepticism. Could be true, but no way to tell.

Steve

Dave Schuler April 9, 2014 at 2:05 pm

Note that my take was somewhat different than Doug’s. I didn’t take it as proof but as additional data.

IMO intuition should suggest to one that the PPACA would increase premium rates.

One thing I found interesting in the discussion at OTB was that I think that the commenters who supported the PPACA were by and large taking the wrong tacks. Strategically, I think they should take the position that they don’t care whether the PPACA increases premiums or not and position the PPACA as a moral imperative. I think that’s a harder case make than most of its proponents realize but it’s stronger than arguing, for example, that the PPACA couldn’t possibly cause premiums to rise, that anyone who claims that it might has some sort of malicious intent, etc.

Andy April 9, 2014 at 5:53 pm

Well, proponents of the ACA, especially the comment section at OTB, seem driven to argue that water is always wine and sour milk really fine cheese.

Like Steve, I’m skeptical until I see this “study” or “survey” or whatever it is.

PD Shaw April 9, 2014 at 6:05 pm

Free Lunches at OTB !!!

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