Remember when health care reform was supposed to make life better for Coloradans? Well, reform efforts have taken an unexpected, and unfortunate, turn in recent weeks.
As two studies recently released by noted international consultants PricewaterhouseCoopers, and Oliver Wyman, Inc., show, major provisions in the current legislative proposals will cause health care costs to increase far faster and higher than they would even under the current system. Anthem Blue Cross and Blue Shield followed with another actuarial study that looked at what legislation would do to Coloradan’s premiums, and found much the same.
Many elected officials are expressing outrage and indignation that the studies dared be published and have vociferously questioned their veracity. But, the truth is, consumers would be well-served by taking a more reasoned and less political approach to this new information by familiarizing themselves with the findings and then deciding if they ring true.
All of these studies identify a major flaw in the recently passed Senate and House bills around the issue of guaranteed coverage for everyone – regardless of whether or not people have preexisting medical conditions.
To set the record straight, it was the insurance industry that came to the table back in November 2008, offering to sell insurance to any individual who requested coverage, regardless of any pre-existing medical condition – with the caveat that these insurance reforms be coupled with an effective mandate that all Americans purchase insurance. The mandate is essentially the linchpin between expanding coverage and premium affordability.
Instead of creating an enforceable individual mandate, however, both the House and Senate bills establish a clear disincentive for healthy people to secure or maintain coverage. As a result, people will buy coverage only when they get sick and cancel it when they don’t need to pay medical bills. This would be the same as allowing people to obtain auto insurance after they have had an accident or secure homeowner’s insurance after their house has burned down.
The studies findings in this area have played out in real life. For example, in New York and Vermont, where guaranteed issue was adopted in the individual market without a mandate, average premiums are approximately 60 percent higher than the national average. In New Jersey and Maine, thousands dropped coverage after state health care reform was enacted, resulting in individual markets that were slashed by more than half in both states-markets in which it is now very costly to obtain coverage.
The PricewaterhouseCoopers study showed that a weak individual coverage requirement coupled with a guarantee issue requirements, no pre-existing condition limits, and no rating adjustments based on health status would result in an increase of premiums by 41-54 percent for the average individual premium.
The Oliver Wyman study illustrated that the watering down of individual coverage mandates could result in the ultimate failure of reform by causing premiums to spiral out of control for all those who responsibly purchase coverage.
And, Anthem’s study showed that health insurance costs would rise dramatically in Colorado if current federal reform proposals become law. For example, a healthy 25-year-old man in Denver would face an increase of 140 percent.
Are these biased studies commissioned by the insurance industry, that say only what the industry wants you to hear? Read the reports and judge for yourself.
It is critically important that we hold our elected officials to the highest standard and ask that their efforts to reform health care are more than just political theatre. Reform needs to incorporate the very best thinking on these complex issues in order that the final legislation serves to lower the cost of health insurance, improve the quality of health care and increase access to all Americans. Passing health care reform is an enormously difficult political challenge, getting it right is the only point of doing it.
The PricewaterhouseCoopers LLP paper is available on the web: Potential Impact of Health Reform on the Cost of Private Health insurance Coverage.
The Wyman report is available at:
The Anthem Blue Cross and Blue Shield report is available at:
John Martie is president of Anthem Blue Cross and Blue Shield in Colorado. EDITOR’S NOTE: This is an online-only column and has not been edited.
