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HHS: Premiums Under ACA Will Be Lower Than Expected.
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Drug Information Daily. http://www.diahome.org
Several national and many regional outlets cover a new report issued by HHS Wednesday which shows premium prices for Federally run exchanges set up under the Affordable Care Act. The reports, many of which quote HHS Secretary Kathleen Sebelius and CCIIO Director Gary Cohen, are generally positive. USA Today (9/25, Kennedy) reports that the new HHS analysis shows that "most Americans buying insurance from new state health exchanges will have at least two insurers to choose from," and six out of 10 people "could pay less than $100 a month in premiums." Center for Consumer Information and Insurance Oversight Director Gary Cohen said approximately 25% of insurance companies have begun offering in the individual market and called it "a sign of healthy competition."
On its front page, the Wall Street Journal (9/25, A1, Radnofsky, Subscription Publication) reports the exchanges are likely to attract greater attention from young buyers while older buyers may find a way to save money. However, total prices and savings will vary from state to state. The Affordable Care Act prohibits carriers from charging higher premiums for consumers with medical histories and must offer more benefits, including hospital care, preventive services, prescriptions, and maternity coverage, which may mean significantly higher premiums for young, healthy buyers. The Administration hopes enough healthy people will sign up to compensate for the sick, whose coverage will be more expensive. Opponents, such as Kentucky Senator Mitch McConnell (R) states, "Obamacare hasn't even been fully implemented yet, but we can already see the train wreck headed our way. Premiums are skyrocketing."
The New York Times (9/25, Pear, Abelson, Subscription Publication) reports today is the first day consumers in 36 states can view a "detailed look" at premiums, with costs the Federal government called "generally lower than previous estimates," despite a "fierce fight" from individuals like Texas Senator Ted Cruz (R). President Obama promised that young, healthy consumers can "purchase high-quality health insurance for less than the cost of your cellphone bill." However, the data does not provide a complete picture, as the government failed to identify any exchanges, insurance companies offering policies in Federal marketplaces, or inform the public about policies that will be more expensive than the amounts cited in its report, before the exchanges open. Republicans and other critics will "likely" be dissatisfied with the Administration's current financial picture.
The Washington Post (9/25, Somashekhar, Kliff) reports, in the 48 states with available data, premiums ranged from $70 for individuals to $1,200 for families of four. According to HHS Secretary Kathleen Sebelius, "For millions of Americans, these new options will finally make health insurance work within their budgets," as an Administration report found 56% of about 41 million eligible people could pay $100 or less each month. However, these low rates require plans that include fewer in-network doctors and hospitals, and some people may find their specialists outside an exchange's network. Low-income people may find their former clinics suddenly unavailable and waiting room times may increase. Many low-cost plans also carry high deductibles.
The Los Angeles Times (9/24, Levey) reports insurance will become available in 36 states on January 1. Critics tend to note that, for most people, less expensive insurance plans already exist. Subsidies expected to be available to many consumers, however, could make premiums substantially more affordable for many and that some will even be free for qualifying low-income consumers.
Bloomberg News (9/25, Wayne, Nussbaum) reports under 50% of those buying insurance on their own may get help from tax credits. Monness Crespi Hardt & Co. Analyst Brian Wright states long-term success "will depend on the changes that are made over the next couple of years to address the affordability issue." Premiums currently appear lower than last year's Congressional Budget Office (CBO) projections, which the government hopes will reduce costs estimated at $1.4 trillion over 10 years. Republicans argue the individual mandate "curtails personal liberty" and that many will pay more for insurance, possibly leaving the additional benefits not "worth the cost." Private employers have already reacted to the new policy, including UPS relinquishing coverage for employed spouses, IBM altering retiree benefits, and Walgreens insisting 160,000 workers buy insurance through private exchanges.
The AP (9/25, Alonso-zaldivar) reports, according to Sebelius, consumers may choose from an average of 53 plan options beginning October 1, as an HHS report estimated 95% of consumers can choose from at least two insurers. However, Avalere Health President Dan Mendelson warns consumers to "be ready for significant cost sharing, and check carefully that your doctors and nearby hospitals are in the plan's network."
Reuters (9/25, Humer) reports the average premium is estimated at $328 a month, while states with greater competition among insurers will see lower prices. Approximately 2.7 million young, healthy consumers are necessary to offset the costs to care for less healthy members.
NBC News (9/25, Fox) reports HHS has inspected the approved plans and found most states have "plenty of choice with reasonable prices," as Sebelius comments, "In many cases, premiums will cost significantly less than what was originally projected." The paper also states that HHS officials are "clearly delighted" to see dozens of insurers offering exchange plans, because, according to Cohen, "In states where there is less competition, we are seeing higher rates. It depends very much where you are." The PwC Health Research Institute also found most health insurance companies it surveyed planned to offer products on some exchanges, as its report reads, "Some of the largest national insurance carriers Ð such as Humana, Aetna and its subsidiary Coventry Ð are entering around 12 to 14 markets in the first year."
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