Viewing entries tagged with 'ICYMI'
MUST SEE TV: AHIP Hits the Nightly News To Discuss Costs and Set the Record Straight on Health Plan Profits
Posted by The Campaign on March 09, 2010 at 4:57 PM
CBS and ABC both reported on today's developments in the health care reform debate. Watch the full clips below which include important setting the record straight segments on health plan profits as well as good discussion on what is driving premium increases.
AHIP's Karen Ignagni on CBS Evening News:
AHIP's Robert Zirkelbach on ABC Evening News:
ICYMI: AHIP's New Ad - Pie
Posted by The Campaign on March 09, 2010 at 2:06 PM
AHIP today launched a new national television ad campaign that puts into perspective health insurance companies' contribution to rising national health care spending and urges Washington to focus on the true drivers of rising health care costs.
ICYMI: Slate's Tim Noah on Health Care Costs and Health Plan Profits
Posted by The Campaign on March 08, 2010 at 2:52 PM
While in general Tim Noah's recent article on Slate.com is off in many ways, he does have two very good points on health care costs and health plan profits.
Here they are:
On Health Care Costs: "Health insurers and other complain that the health reform bill does little to control doctor and hospital bills, especially in the private sector. That's true."
On Health Plan Profits: "Profit margins in the health insurance business aren't especially great. On Fortune magazine's list of the 53 most profitable industry sectors, health insurance ranks 35th."
ICYMI: AHIP's Letter to Secretary Sebelius
Posted by The Campaign on March 04, 2010 at 10:25 AM
Yesterday, AHIP's President and CEO Karen Ignagni sent a letter to HHS Secretary Kathleen Sebelius outlining concerns about rising medical costs, the impact this has on premiums and things that can be done to slow the growth rate.
Here are some key excerpts from the letter:
"But for months health plans have been raising concerns about far more needing to be done in health care reform legislation to bring costs under control, because we were seeing disturbing increases in unit costs in the marketplace. We also have raised strong concerns about what happens when costs increase and younger and healthier people leave the pool. These concerns no longer are conjectural; they are being borne out in the data."
"With respect to why premiums are increasing, we believe the data clearly show that premiums are increasing primarily because of soaring medical costs and a slowdown in the economy."
"...the Department’s recently released analysis of 2009 health expenditures found that rising costs for hospitals, physicians and prescription drugs have led to the largest growth in health care spending as a share of GDP since the government started keeping track of these data 50 years ago. [1] Just last week Health Affairs[2] published an analysis that showed that hospitals and physicians have enhanced their significant bargaining clout in a way that works against consumers."
"The data also put in perspective health plans’ profits and administrative costs. Indeed, the Department’s analysis showed that in 2009 the portion of premiums that went toward health plans’ administrative costs and profits declined for a second year in a row. [1] Fortune Magazine’s 2009 analysis of industry profits showed that health plans’ profit margin was 2.2 percent, ranking it far below other health care industries.[2] Yahoo! Finance’s latest analysis of quarterly financial data shows the average profit margin in the health insurance industry is 3.4 percent, compared to 11 percent for the entire health care sector.[3] "
"We have long advocated that a public-private process be established to develop a road map to take 1.5 percentage points off the future rate of growth in total health care costs.... Such an effort would help reduce the deficit, improve the stability of Medicare, and control the future cost of coverage for those under age 65, including small businesses and individuals."
"Recognizing the important dual responsibility of state insurance commissioners in protecting consumers and ensuring the financial stability of insurers in the marketplace, we are also committed to working with the National Association of Insurance Commissioners (NAIC) to help develop a uniformity of process and more transparency for consumer."
Click here for the full letter.
[1] Christopher J. Truffer, Sean Keehan, Sheila Smith, Jonathan Cylus, Andrea Sisko, John A. Poisal, Joseph Lizonitz, and M. Kent Clemens, Health Spending Projections Through 2019: The Recession’s Impact Continues, Health Affairs Web Exclusive, February 4, 2010.
[2] Berenson, R., Ginsburg, P., and Kemper, N., “Unchecked Provider Clout In California Foreshadows Challenges To Health Reform”, Health Affairs 29 (April 2010): 1-7.
[1] Truffer, February 4, 2010.
[2] Fortune 500, “Top Industries: Most profitable”, Fortune, May 4, 2009.
[3] Yahoo!Finance, Yahoo.com, http://biz.yahoo.com/p/5qpmd.html
ICYMI: Seattle Weekly -- Washington State Offers Dismal Lesson for Federal Regulation of Premiums
Posted by The Campaign on February 23, 2010 at 10:21 AM
The health care reform debate has been focused recently on why premiums are increasing. What the data shows is that premiums track closely with underlying medical costs -- in fact the Department of Health and Human Services National Health Expenditure Accounts data shows this exactly.
Despite this data showing that underlying medical costs are driving premiums and health care spending ever higher, there continue to be arguments made that the federal government should play a larger role in regulating premiums.
However, the below two resources point out the exact problems with regulating (or dictating) premiums.
The news site Seattle Weekly points out "Practically, however, a rate board is unlikely to do much, judging by Washington state's experience with similar regulation...Stephanie Marquis, a spokesperson for Insurance Commissioner Mike Kreidler, says her boss's hands were tied. He has to go along with rate increases if insurance companies show that they are paying out more money than they are taking in. And the reality is, Marquis says, that insurance companies lose money in the individual market, which holds just a sliver of the total population, and one that tends to need a lot of expensive care." For more click here.
Several years ago, the California Healthcare Foundation and RAND performed an analysis on legislation in the California State Senate that would have regulated premiums. The study found "if health care costs continue to rise while premiums are frozen, stringent rate regulation could lead to undesired consequences." Click here for the full study.
ICYMI: AHIP Statement on Premium Increases
Posted by Campaign on February 18, 2010 at 8:08 AM
AHIP Statement on Premium Increases
Ignagni: “It’s time to stop the politics of vilification.”
Washington, D.C. – America’s Health Insurance Plans (AHIP) President and CEO Karen Ignagni today released the following statement regarding premium increases:
“It’s time to stop the politics of vilification and focus on what Americans need most: real health care reform that addresses the serious and urgent problems facing our nation.
“Increases in the cost of coverage in the individual market shine a spotlight on the urgent need to reduce the growth of underlying medical costs and to bring everyone into the system. If reform doesn’t address these pieces, it will not solve the serious problems that individuals, families, and employers face. That is why health plans have proposed fundamental reform of health insurance markets and a long-term strategy to reduce rising health care costs.
“Health insurance premiums are increasing in the individual market because of soaring medical costs and because younger and healthier people are dropping their coverage due to the economy. In 2009, according to a report from the Department of Health and Human Services’ Centers for Medicare and Medicaid Services released on January 5th, rising costs for hospitals, physicians, and prescription drugs led to the largest growth in health care spending as a share of GDP since the government started keeping track 50 years ago. At the same time, the portion of premiums that went towards health plans’ administrative costs and profits declined for the second year in a row.”
Facts about rising health insurance premiums
- In every state, health plans have to provide actuarial justification for any premium increases.
- Federal government data confirms that rising health care costs are driven by increased spending on hospital care, physician services, and prescription drugs.
- AHIP recently sent a letter to Capitol Hill to highlight the key factors contributing to increases in health insurance premiums. These factors include:
o sharp increases in provider rates;
o increased cost-shifting as providers seek to offset the costs of treating more Medicaid patients;
o an increase in uncompensated care costs;
o consolidation among hospitals and other health care providers;
o a wide range of new state laws, including benefit mandates, regulations, and premium taxes; and
o economic factors that have caused some people to drop coverage resulting in a risk pool that is more heavily weighted with older, less healthy persons.
- According to National Health Expenditure Accounts, health plan administrative costs have fallen over the past two years from 12.8% in 2006 to 12.5% in 2007 to 11.7% in 2008. (See Table 12)
Facts about health plan profits
- Fortune 500 puts the health plan industry profits at 2.2%, 35th on its list of profits by industry sector. This is below other sectors of the health care industry.
- According to Yahoo! Finance’s latest analysis of quarterly financial data, the net profit margin for the entire health care sector is 11%. Using the same index, health plans have a 3.4% net profit margin.
ICYMI: Fortune Magazine discusses the importance of structuring reform properly
Posted by The Campaign on February 03, 2010 at 9:41 AM
Fortune Magazine’s editor-at-large, Shawn Tully, takes a look at several of the health care reform provisions with broad support and how they need to be structured in order to work well.
A few excerpts:
In the battle over health care reform, two ideas seems to bridge the divide between Democrats and Republicans: Private insurers should be required to cover Americans with pre-existing conditions and be banned from charging older, sicker people much more. But where the two camps jibe could also cause the most damage to health care.
The two ideas: Guaranteed Issue and Community Rating.
Guaranteed Issue forces private insurers to accept any and all applicants, regardless of their medical condition. Community Rating bans carriers from charging a different rate, say, for someone with diabetes than a buff tri-athlete. It also imposes tight bands on premiums for customers of different ages, even though older patients cost far more to insure than younger ones.
The pool dries up: So what is the problem with obliging insurers to accept everyone and try to keep pricing uniform? First, the young and healthy -- the group whose premiums carriers count on to make insurance work -- will be less likely to buy in. Community Rating forces them to pay far more than their anticipated medical expenses. Shunning insurance actually makes sense: They can wait to sign up if they get diabetes, cancer or another chronic condition. Remember, under Guaranteed Issue, insurers can't turn them down.
Boosting penalties: A system mandating that insurers take all comers at close to the same premium can work -- but only if it also imposes a powerful "individual mandate" requiring that everyone buy insurance.
To read the full article, click here.
ICYMI: The market clout of Massachusetts providers is a “main driver of the state’s spiraling health care costs”, investigation finds
Posted by The Campaign on January 29, 2010 at 4:30 PM
A year-long investigation into the rising costs of health care in Massachusetts, which are growing by 7.5 percent each year, found that hospitals and physicians are leveraging their market power and driving up health care costs in the state. The Boston Globe reports on the investigation by the state attorney general’s office. Here are some key findings:
- “Massachusetts insurance companies pay some hospitals and doctors twice as much money as others for essentially the same patient care, according to a preliminary report by Attorney General Martha Coakley. It points to the market clout of the best-paid providers as a main driver of the state’s spiraling health care costs.”
- “Coakley’s staff found that payments were most closely tied to market leverage, with the largest hospitals and physician groups, those with brand-name recognition, and those that are geographically isolated able to demand the most money.”
- “’These rising costs are unsustainable. If we don’t do something about it, the only thing we’ll be able to afford is health care. No one will have money for food or housing,’[said Coakley].’’
- “The report shows that a small group of about 10 hospitals statewide command significantly higher payments than the other 55, ranging from 10 to 100 percent more than their competitors for similar work.”
- “Investigators found that Massachusetts health care costs, which are growing by 7.5 percent annually, are mostly the result of rising prices, not patients getting more imaging tests, surgery, and other procedures.”
For the full article, click here.
To read the preliminary report, click here.
ICYMI: AHIP, BCBSA, Employer Group Joint Letter on Immediate Reforms in Current Legislation
Posted by The Campaign on January 15, 2010 at 3:10 PM
ICYMI: American Academy of Actuaries Comment Letter on Health Care Reform Legislation
Posted by The Campaign on January 15, 2010 at 10:43 AM
The American Academy of Actuaries sent a letter to Speaker Pelosi and Majority Leader Reid providing comments on the Senate-passed health care reform legislation.
From the press release:
“The individual mandate language should be strengthened,” Uccello said. “The viability of health care reform depends on attracting lower-risk individuals. Strengthening the mandate through higher financial penalties and non-financial incentives would increase the likelihood that these individuals will purchase coverage.”
Here are a few highlights from the letter:
On individual mandate:
- An individual mandate is an integral component of both bills. Such a mandate is necessary to ensure that adverse selection will not lead to dramatic premium increases or a premium spiral. However, the financial penalties associated with the bills’ individual mandates are fairly weak compared to coverage costs, especially during the first years of the Senate plan when the financial penalties are being phased in.
On age rating:
- Moving to a narrow limit on premium variations by age, such as the proposed 2-to-1 and 3-to-1 limits, could result in dramatic premium changes, compared to what individuals are facing currently. In particular, younger individuals in states that currently allow underwriting and wider premium variations by age could see much higher premiums than they face currently (and may have chosen to forgo).
On MLR requirements:
- Imposing unrealistically high medical loss ratio requirements may threaten plan solvency by making it difficult for premiums to cover claims and expenses. In particular, it would be difficult for insurers in the individual market to satisfy the loss ratios that are typical in the current small and large group markets. Imposing such requirements could result in individual market insurers exiting the market.
- From a practical standpoint, it would be difficult to impose a minimum loss ratio requirement in 2010, as contained in the House bill. Plans typically file their premiums six to 12 months before they become effective, and need time prior to rate filing in order to develop the rates. Therefore, a sufficient lag time would be needed between the enactment of the legislation and the effective date of the minimum loss ratio provision.
On CLASS Act:
- However, given the way the program is structured, severe adverse selection would result in very high premiums that are likely to be unaffordable for much of the intended population, threatening the viability of the program.
- Without significant program changes to minimize adverse selection, the program would not be sustainable in the long term without premium increases or benefit reductions.
