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Insurance Industry Audit Says Insurance Premiums will Increase Faster with Senate Baucus Bill

The entire premise behind the Democrats' and President Obama's health care reforms is that the current rate at which health insurance premiums are increasing is simply unsustainable, so government has to step in and take a larger role in how insurance is implemented. According to an audit conducted by Pricewaterhouse Coopers (via the Washington Post) that was requested by America's Health Insurance Plans, the health reform bill that is currently in the Senate Finance Committee and will be voted on tomorrow will drive up health care premiums even more than if the reforms were not enacted:

America's Health Insurance Plans engaged PricewaterhouseCoopers (PwC) to examine the impact of four components of the health reform bill being proposed by the Senate Finance Committee as introduced. These include:
  • Insurance market reforms and consumer protections that would raise health insurance premiums for individuals and families if the reforms are not coupled with an effective coverage requirement.
  • An excise tax on employer-sponsored high value health plans (or "Cadillac plans") that in a few years could also raise premiums for some moderate value plans.
  • Cuts in payment rates in public programs that could increase cost shifting to private sector businesses and consumers. These changes are expected to more than offset the potential reduction in cost shifting resulting from providing coverage to the uninsured.
  • New taxes on health sector entities that are likely to be passed through to consumers.

The audit indicates that these increases will be on top of what we already are expecting for increases in health care premiums. America's businesses and consumers who currently have private health insurance had better hang on to their wallets, because they are going to pay a lot more for their health insurance premiums if the Baucus bill becomes law:

  • This analysis shows that the cost of the average family coverage is approximately $12,300 today and
  • could be expected to increase to approximately:
  • $15,500 in 2013 under current law and to $17,200 if these provisions are implemented.
  • $18,400 in 2016 under current law and to $21,300 if these provisions are implemented.
  • $21,900 in 2019 under current law and to $25,900 if these provisions are implemented.
  • This analysis shows that the cost of the average single coverage is $4,600 today and could be expected to increase to:

  • $5,800 in 2013 under current law and to $6,400 if these provisions are implemented.
  • $6,900 in 2016 under current law and to $7,900 if these provisions are implemented.
  • $8,200 in 2019 under current law and to $9,700 if these provisions are implemented.
  • These increases are in line with what Wendy Button, former speech writer for Barack Obama, John Edwards, John Kerry, and Hillary Clinton, experienced when she moved from Washington DC to Massachusetts:

    Since I care more about my country than my personal pride, here's how I lost my insurance: I moved. That's right, I moved from Washington, D.C., back to Massachusetts, a state with universal health care.

    In D.C., I had a policy with a national company, an HMO, and surprisingly I was very happy with it. I had a fantastic primary care doctor at Georgetown University Hospital. As a self-employed writer, my premium was $225 a month, plus $10 for a dental discount.

    In Massachusetts, the cost for a similar plan is around $550, give or take a few dollars. My risk factors haven't changed. I didn't stop writing and become a stunt double. I don't smoke. I drink a little and every once in a while a little more than I should. I have a Newfoundland dog. I am only 41. There has been no change in the way I live my life except my zip code -- to a state with universal health care.

    Massachusetts has enacted many of the necessary reforms being talked about in Washington. There is a mandate for all residents to get insurance, a law to prevent insurance companies from denying coverage because of a pre-existing condition, an automatic enrollment requirement, and insurance companies are no longer allowed to cap coverage or drop people when they get sick because they forgot to include a sprained ankle back in 1989 on their application.

    Even if the economy was strong and I was working more, I still couldn't afford my premium. I am not alone; I've got 46 million friends in a similar situation. We wake up every day worried that a bad cough, an accident while walking the dog, or that dreaded pain on the right side of the abdomen will send us into complete financial ruin.

    What Ms. Button is experiencing is what almost always happens when government gets involved and starts meddling: things get worse, not better. If health care reform along the lines of what is being proposed in Congress is implemented, we will still have many uninsured Americans but not because they choose to be uninsured. They will be forced out of the health insurance policies they like, just as Ms. Button was. If there is a government run public option, they will be forced onto that plan, which is exactly what President Obama promised would not happen.


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    Comments (15)

    That "study" has already be... (Below threshold)
    Adrian Browne:

    That "study" has already been debunked:

    The Insurance Industry's Deceptive Report

    http://voices.washingtonpost.com/ezra-klein/2009/10/the_insurance_industrys_decept.html

    There's things that governm... (Below threshold)
    JLawson:

    There's things that government can do relatively efficiently, and things it demonstrably can't.

    But that never seems to prevent the attempt, does it? THIS time they'll get it right, THIS time it will be affordable, THIS time they'll be able to give everything to everyone for a reasonable price.

    And if the price isn't that affordable, then ... it'll be perfectly justifiable to raise taxes or costs so it CAN be paid for, right?

    A hundred years from now, historians are going to conclude that something inside the Beltway caused mass delusion when it came to numbers. Suddenly, decreasing the amount of an annual increase was seen as a 'cut' in the amount spent, somehow the concept of actually paying back borrowed money became completely abhorrent, somehow the folks spending money became convinced that there was a never-ending supply of it... all they had to do was use the proper language to describe what they were doing, and suddenly a massive defict became a surplus.

    And they'll wrangle over whether it was an environmental or sociological effect that caused the delusion, but it'll be clear that delusion was what caused the country to fail.

    What you see is how the rig... (Below threshold)
    Steve Green:

    What you see is how the right wing works. Make it up or mis-state, lie or otherwise twist the facts, then spread it around.

    "Get over, there's going to... (Below threshold)
    914:

    "Get over, there's going to be a public option.

    Remember? Your side lost."

    There are two sides. Government and the Public. Obviously You are on the Big government socialist side. If there is a "public" option. more jobs will be lost and the Barry inspired recession will last for at least His one and only term.

    Why would anyone with half a clue or that lives here opt for that? Unless of course You are an idiot or were not born here.

    Hey, if there is no public ... (Below threshold)
    JustRuss:

    Hey, if there is no public option in the current bill, then all that extra money will be going to the Insurance Companies! So... why would they lie about it if it helps them?

    Maybe because they know that once they make insurance unaffordable then the govt will step in with a "much needed public option" and force them out.

    Just because the numbers appear to help their argument, does not mean they are untrue. You are just swallowing the left wing line "It's obviously a ploy by the insurance companies."

    Brown, Green and SAUD, stil... (Below threshold)
    GarandFan:

    Brown, Green and SAUD, still drinking the koolaid. The insurance industry doesn't know anything about insurance. Everything will be all right this time. Just ask Massachusetts.

    http://www.boston.com/news/health/articles/2009/10/11/massachusetts_plan_could_limit_patients_hospital_choices/

    After a bit of thought and ... (Below threshold)
    JustRuss:

    After a bit of thought and research I am willing to say this could be a snow job. However the facts they site are worst case scenario and they are accurate.

    But I accede that worst case scenario is unlikely, unless the govt continues to mess with health care as part of a plan to drive providers out of business with a public option.

    All of this is utter bullsh** anyway because you know the bill in its current form will in no way resemble the finished product, which will likely include most of HR3200. And after they legalize every immigrant in this country you must add them into the numbers of poor and middle class persons.

    "I really don't th... (Below threshold)
    Neo:
    "I really don't think it's worth the paper it's written on," AARP Executive Vice President John Rother told reporters Monday. "If anyone believes it, that's a problem."
    AARP .. neutral through disbelief
    I have not read the article... (Below threshold)

    I have not read the article Ms. Button authored, but, as a longtime Massachusetts resident, I'd say that she she simply found the prevailing rates in Massachusetts. IN the mid 1990s my soon-to-be wife went shopping for individual policies for health insurance. She was young (early 20's), in good health, a non-smoker and no medical history outside of the usual bumps and such that anybody is subject to when growing up.

    A catastrophic-only policy from a "national carrier" was charging premiums in excess of $600/month, and would issue the policy only upon a physical exam that eliminated everything but the ability to breath frpom liability.

    Ask anybody in Massachusetts about the costs for coverage, prior to the enactment of the Massachusetts health initiative, about the costs for COBRA premiums. Bearing in mind that the COBRA costs are for a *group* policy that is the result of tough negotiations between the carrier and employer.

    This "audit" is self-serving and cherry-picking. Much as is the usual practice for the insurance companies.

    I prefer my facts from impa... (Below threshold)
    Adriane Brownie:

    I prefer my facts from impartial sources, such as the White House and their state-run newspapers.

    ab - "I prefer my facts... (Below threshold)
    Marc:

    ab - "I prefer my facts from impartial sources, such as the White House and their state-run newspapers."

    Sorry you've been unmasked preferring bluster, off-topic rants, lies and diversion.

    Not facts. Or anything like them.

    "I really don't think it's worth the paper it's written on," AARP Executive Vice President John Rother told reporters Monday. "If anyone believes it, that's a problem."
    Let me see if I get this straight Rother, who debased obama when he claimed AARP supported his plan, is now attacking who wrote the study rather than the study itself.

    Of course he would, AARP is already knee-deep in selling insurance to its members and stands to increase the business exponentially if this monstrosity of a bill ever passes.

    He's transparently a dumbass.

    This is all just one more... (Below threshold)
    Indie:

    This is all just one more reason for single payer.

    It's really very simple. You either support insurance executives or health care for you and your family.

    With single-payer, the only major change is that the government becomes the payer. It replaces the insurance companies. It is no more "socialist" than the current system. With single-payer, the government simply removes the middle man (insurance companies) and writes checks for services rendered by hospitals and doctors, which remain in the private sector. Instead of an insurance company reviewing those services, deciding when to pay and when to deny payment, the government would. Doctors and hospitals go about their business regardless.

    With single-payer, the o... (Below threshold)
    JLawson:

    With single-payer, the only major change is that the government becomes the payer. It replaces the insurance companies.

    So, remind me again why FedEx and UPS exist, when the Post Office is there?

    What's going to be the percentage used to pay for 'administrative costs' on a government plan versus what we've got now?

    Why is the government pushing this through so fast that the friggin bill isn't even WRITTEN yet, but still in 'conceptual language' - and whatever happened to that 'on-line for 72 hours so the public can look at it' thing that Obama was gonna do?

    When the government can't even run a 'Cash 4 Clunkers' program effectively and quickly, why should we figure they can do any better with a much more complex system?

    And why is Obama is such a rush to take over a sixth of the US economy, when he's so hesitant to make a decision on Afghanistan?

    that 'on-line for 72 hou... (Below threshold)
    Oyster:

    that 'on-line for 72 hours so the public can look at it' thing ...

    is more crap.

    Why, you ask? Because the sentence ends with "before I sign it into law". In other words, "We're gonna screw ya ... make no mistake. We'll just give you 72 hours to stock up on vaseline."

    Am I the only one who believes that Obama will sign ANYTHING related to healthcare that the House and Senate put out? Eventually something will come out of both houses and he's going to sign it. He's desperate to get his name on something substantial. Even if it's substantial crap.

    The insurance industry will... (Below threshold)
    Amy:

    The insurance industry will always be greedy, hopefully the health care reform will help people that need it.




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