Health insurance rebates (ala ACA) may keep premiums down FOR EVERYONE

[Bill USA]

it's another case of Republican propaganda inverting reality. The GOPers said the ACA was going to increase people's health insurance costs.

Reality: THe 80:20 rule in the ACA which requires insurers to pay out rebates if their expenditures for actual health care are below 80% of their premium revenues, is causing insurers to get the most for their expenditures for medical care and that is bringing down costs and decreasing premiums for everybody.

And the rebates this year come to about $1.1 Billion.

Actually, this is exactly what Obama was saying the ACA would do --- if you could hear him above the chanting about 'death panels' etc from the Insurance company flacs (aka Republicans).


(emphasis my own)

http://www.usatoday.com/news/health/story/2012-07-31/health-care-rebates/56626048/1
By Alex Brandon, AP

As the last of $1 billion worth of this year's health insurance rebate checks goes out to consumers this week, insurers and government officials say the new regulation may be keeping premiums lower for everyone.

"Consumers who are not getting rebates are benefiting from the plan," said Teresa Miller, acting director of the office of oversight for the Center for Medicare Services. "Insurers are keeping their premiums down."

The 2010 health care law requires health insurers to spend at least 80% of consumers' premiums on health care and not administrative costs such as overhead or salaries. If they don't, they must issue their customers a rebate. That check may go to the consumer or the consumer's employer, depending on how a person purchases her insurance.

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For Blue Cross, as well as several other large insurers, avoiding the "medical loss ratio" means new programs that concentrate on paying for effective care, rather than by the number of tests or procedures a patient receives.

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[Igel]

1. C'mon.

My premiums went up by far more than any rebate I'm likely to get.

The article breaks up insured citizens into two classes and the spokesfolk seem to want us to infer that this is exhaustive: There are those who are getting a rebate and those who benefit by having lower premiums.

Might be an exception, but I'm not chopped chicken liver. There's a 3rd category.

In my case, about 10% of insurance revenues went to overhead, 90% to expenses. But expenses to cover more conditions and other changes to the plan made us have to switch. Bigger premiums. Still under that magic 20% level for administative overhead.

Whenever a politician tries to say that it's in the bag, there is no downside for anybody, they're either deluded, stupid, or deceitful.

[Bill USA]

2. what Obama said is that the ACA would reduce the rate of increase of health care costs.

Health care costs were going up at about twice the rate of general inflation for the ten years prior to the passage of the ACA.

Obama never said, "it was in the bag" or it would cause health care costs to magically go down. - he did say they would be lower relative to where they would have been without some kind of real HCR. Nobody expected (nor was it promised) that the ACA was going to cause health care costs to go down.

The GOP keep repeating the Big Lie that Obama said that HCR would "lower health care costs"..Of course anybody believing that or anything the GOP say is either "deluded, stupid" or a Republican SUCKER (which is the same thing).

The fact is the ACA has forced the insurers to give rebates and it also is causing the insurers to take steps to get better control of costs as was mentioned in OP and in the article referenced.

when Teresa Miller said:

"Consumers who are not getting rebates are benefiting from the plan," said Teresa Miller, acting director of the office of oversight for the Center for Medicare Services. "Insurers are keeping their premiums down."

"Insurers are keeping their premiums down" does not mean premiums will be decreasing in absolute amount, but that insurers will, by controlling costs better, be keeping premiums lower [font size="4"]than they would have been[/font] without the ACA and the discipline of the 80:20 rule in place.

[Bill USA]

3. conclusions of knowledgeable people in the field of health care are that 1% to 3% of the 8% to 9%

rise in premiums, since enactment of the ACA, are due to the ACA required coverage increases. NOte that health insurance premiums were increasing faster than that in the ten years before enactment of the ACA, (and might well have continued rising at a higher rate without the ACA being in place):


http://www.factcheck.org/2010/11/the-truth-about-health-insurance-premiums/

"As for the impact on employer-provided policies, economist Gail Wilensky says the surveys she has seen indicate there will be an 8 percent to 9 percent increase in premiums, of which she attributes about 2 percent to 3 percent to the health care law. Wilensky was the head of Medicare during the George H.W. Bush administration and is now a senior fellow at Project HOPE, a health training and humanitarian organization. She cites three factors that she sees as increasing costs: more use of care, higher costs of care, and the provisions of the health care law. Her projections are in line with those of Hewitt Associates, a human resources consulting company, which estimated that there would be an average premium increase of 8.8 percent in 2011 for employer-provided plans, with 1 percent to 2 percent of that attributable to the health care law."

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John Sheils, senior vice president of The Lewin Group (a subsidiary of UnitedHealth Group), told us that overall the effect on premiums "should be closer to what the administration has said,” a 1 percent to 2 percent increase. But Sheils says the increase would be higher for those insurers that currently offer stripped-down plans costing perhaps $50 or less per month. He and others say free preventive care would be the one change that would produce a noticeable difference in premiums for these individual market plans.

Kenneth Thorpe, professor and chair at the Rollins School of Public Health at Emory University, puts the increase for preventive services in “the 1 to 3 percent range,” higher if the current preventive package isn’t very good. The impact of the other changes insurers have had to make so far “are very small,” says Thorpe, who worked in the Clinton administration. But overall, "clearly the key drivers [of rate increases] are underlying health care trends — rising rates of chronic disease."

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Premiums in the individual market were rising rapidly even before the law was signed. According to a late March survey by the Kaiser Family Foundation, three-quarters of those in this market said insurers recently had raised their premiums by 20 percent on average. Some policyholders switched to a cheaper plan. While the average cost for a single policy in this market was less than the average for employer-sponsored insurance, the average deductible was four times that of employer coverage, according to the survey.
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