The nation’s health care spending has slowed its rate of growth for the past three years — growing annually at a rate of 3.9 percent — but that hasn’t stopped insurance companies in Missouri and elsewhere from demanding double-digit premium increases.
This is happening despite the fact that one of the main objectives of the Affordable Care Act was to stop skyrocketing health insurance costs for consumers. The law specifically seeks to prevent insurance companies from overcharging policyholders and requires that regulators review any request for a rate hike of 10 percent or more.
But what might look like overcharging to you and me doesn’t look that way to the insurance industry.
One of the loopholes in the law is that it does not give anyone — neither the state nor the federal government — authority to deny rate hikes.
Reasonable and justified or excessive and unreasonable — doesn’t matter. They all go through.
The theory is that consumers will compare rates on an Internet-based clearinghouse and decide where to buy insurance. In the ideal model, the marketplace will do its job of regulating commerce by giving consumers the information they need to make informed choices.
Since Missouri lawmakers have balked at designing the health care exchange required as part of the ACA, that job will be left to the U.S. Department of Health and Human Services.
HHS has posted information on the Missouri Department of Insurance website that shows which insurance companies in Missouri are requesting rate hikes and how much. From the site, consumers can link to the federal website, which has more information about the status of each request and the affect it will have on consumers’ premiums.
If it sounds like your government isn’t doing much to help you make smart decisions, you’re correct.
For example, a look at the site turns up requests such as one by Trustmark Life Insurance Company, which has 53,786 Missouri members, the most in the group seeking hikes. It also shows that Trustmark sought a 13.8 percent increase and that it was “deleted.” Aetna Life Insurance Company’s request for 15.8 percent increase for its 1,374 Missouri members was determined to be “not unreasonable;” neither was Celtic Insurance Company’s 17.53 percent increase for its 2,013 members.
The site also provides details about the rate increase request, answering anticipated questions such as: “Why does my insurance company want to raise my premium?” and “What kinds of Medical Services are causing this rate increase?”
Nearly all the insurers say the increases they are seeking reflect the rising cost of health care. Hello? Health care experts and economists say that health spending the past three years has been the slowest ever recorded in the 52-year history of the National Health Expenditure Accounts.
We’re thinking a better explanation is for the hikes is, “Because we think we can get away with it.”
Most of those who will be hurt by the inaction on rate request hikes will be small businesses and people who do not have employer-provided insurance and must buy it on their own.
The Kaiser Family Foundation, which tracks health care issues, has said that rate reviews make a difference and result in lower rates for consumers and small businesses. The foundation estimated in a report in October that premiums were lowered for one in five filings because of rate reviews.
Federal officials concur and say rates were reduced an average of 3 percentage points because of the review process.
Consumer advocates have weighed in with a different perspective. They say that the increases being sought are the result of how the insurance companies operate, especially with regard to plans that create groups of people with expensive medical conditions that are expensive to insure instead of spreading the cost across a larger pool of clients.
This will not be allowed after 2014 under the health care law.
In California, the state insurance commissioner, Dave Jones, is pushing for a state law that will give him the authority to deny excessive rate increases. Missouri’s insurance director, John M. Huff, ought to do the same.
But before that happens, the Republican-controlled Missouri legislature needs to stand up for consumers and small business owners they pandered to when they ran for office. Stop kowtowing to the insurance industry.
There’s plenty of criticism to spread around here, but most of it goes to the Republicans who campaigned against the anti-Obamacare bogeyman, rather than setting up the insurance exchange that will ultimately be helpful in implementing the consumer-friendly aspects of the ACA.
Instead, good luck muddling your way through this one. Chalk up one for the insurance industry.
Copyright St. Louis Post-Dispatch. Reprinted with permission.