Insurers Raising Rates: Is Health Care Reform to Blame?
The Wall Street Journal has a story today on something that health care bloggers--at least, those who were skeptical of health care reform--have been talking about for a while now: insurance companies are raising rates in response to the legislation. Or, at least that's why they say they're raising rates. Kevin Drum is skeptical:
The Wall Street Journal reports that health insurers are planning to dramatically raise premiums to pay for extra benefits required by the healthcare reform bill passed earlier this year. Is this legit? Or are insurers just using ACA as a handy excuse to jack up rates? My guess is that a couple of sentences in the Journal piece tell the story:The rate increases largely apply to policies for individuals and small businesses and don't include people covered by a big employer or Medicare.Hmmm. Don't those provisions apply to all plans, not just individual and small-business policies? So why are insurers boosting rates only on the latter? I'm sure Aetna and Blue Cross have some extremely complicated and plausible sounding reasons for this, but I'd take them with a grain of salt.
....Democrats front-loaded the legislation with early provisions they hoped would boost public support. Those include letting children stay on their parents' insurance policies until age 26, eliminating co-payments for preventive care and barring insurers from denying policies to children with pre-existing conditions, plus the elimination of the coverage caps. Weeks before the election, insurance companies began telling state regulators it is those very provisions that are forcing them to increase their rates.
Perhaps Kevin and I are simply both inclined to believe that the most parsimonious explanation of rate hikes is the one that fits our prior position on health care. But there are a lot of good reasons to believe that at least some of the rate hikes reflect the new law, rather than insurers gratuitously raising rates.
All but two health insurance companies have withdrawn from offering maternity benefits.
Only a handful of companies will still write "child only" health insurance plans.
As of this date, it is almost impossible to find a rate for children's health insurance if they are under age 19 and you are looking for coverage to be effective on 9/23/10 or later.
Some companies have either withdrawn from offering major medical business or are dropping hints they will be out of that market in 18 months or less.
Many have already indicated higher premiums for the 4th quarter of 2010 and later, especially on children under age 19.
Companies are starting to push limited benefit plans as "more affordable" alternatives to true major medical insurance.
Several companies have introduced new plans with stripped down benefits in an attempt to make their product look more appealing.
Doctor and hospital networks are shrinking in an effort to further control costs but also has the effect of limiting access to a wide range of medical providers.
Is this happening because insurers just had a mass outbreak of meanness? Or is it because no congress, no matter how large their landslide, can repeal the laws of supply and demand?