Viewing entries tagged with 'PCR'
MUST READ: Center for American Progress Study on the Personal Coverage Requirement
Posted by The Campaign on August 05, 2010 at 1:49 PM
In Case You Missed It: A new report released by the Center for American Progress, Health Care Reform Is a “Three-Legged Stool”, validates the need to pair an effective personal coverage requirement with insurance market reforms.
Here are a few highlights:
· Repeal of the requirement to buy insurance would mean more people would wait until they get sick to buy insurance in the new nongroup exchanges, which would increase the average premium by 27 percent in 2019.
· Retaining the law’s insurance reforms, but repealing the subsidies as well as the requirement to purchase insurance, would further discourage people from buying insurance when they’re healthy. Premiums in 2019 would cost twice as much as projected under the law as a result.
· Retaining the law but repealing the mandate would newly cover fewer than 7 million people in 2019 rather than the 32 million projected to be newly covered by the law. Federal spending, however, would decline by only about a quarter under this scenario since the sickest and most costly uninsured are the ones most likely to gain coverage.
· If insurance companies must charge the same price to people whether they’re sick or healthy many healthy people will view this as a “bad deal” and not buy insurance. This results in higher prices that chase even more people out of the market. The result is a “death spiral” that leads only the sick to purchase insurance at very high prices. Several states tried such community rating reforms—offering health insurance policies within a given territory at the same price to all persons without medical underwriting— in their nongroup markets over the past two decades, and sharp rises in insurance prices ensued along with rapidly shrinking market size.
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.
ICYMI: Tulane University Dean Says Coverage Requirement Important to Help Control Costs
Posted by The Campaign on January 14, 2010 at 5:19 AM
Here at the Campaign for an American Solution blog we have talked a lot about our support for ending pre-existing condition restrictions coupled with a coverage requirement. Policymakers and economists have recognized that these two policies go hand in hand because if they are not coupled the cost of coverage for Americans could skyrocket (see this study.)
Here is a quote from Tulane University Dean Dr. Karen DeSalvo from today's New Orleans Times-Picayune:
But Dr. Karen DeSalvo, vice dean for community affairs and health policy at Tulane University, said that without a mandate for younger healthier Americans to purchase insurance, the cost of providing coverage for the uninsured will remain high, mainly because pools of insured will disproportionately consist of people facing potential health problems.
"In the absence of some sort of mandate for people, you run the risk that young people are going to gamble and not get insurance," DeSalvo said.
For the full article, click here.
ICYMI: The Economist -- The Necessity of an Individual Mandate
Posted by The Campaign on December 18, 2009 at 11:01 AM
"You cannot have universal health insurance without a mandate. Every country in the world that has a universal health-insurance system either requires its citizens to buy health insurance, or includes its citizens in a default insurance programme automatically and taxes them for it (which is effectively the same thing). The reasons for this are simple, and have been covered hundreds of times since the current debate over universal health insurance began during the Democratic presidential primaries in late 2007."
"If you don't oblige everyone to buy health insurance, then many young and healthy people will bet on not needing insurance, and will decline to buy it. That shrinks the remaining pool such that it is made up of older, sicker people with higher medical costs, and thus premiums will rise. That in turn will cause more healthy people to leave the system. This is the phenomenon of 'adverse selection'. Ultimately you're left only with rich old sick people, and nobody else can afford insurance. This is known as an insurance death spiral. If you want affordable, universal health insurance, then everyone has to buy in."
For the full article, click here.
ICYMI: CMS Actuary Report on Senate Legislation
Posted by The Campaign on December 11, 2009 at 2:26 PM
Impact on National Health Expenditures: “In aggregate, we estimate that for calendar year 2010 through 2019, NHE would increase by $234 billion , or 0.7 percent, over the updated baseline projection that was released on June 29, 2009.” (Page 14)
“Total national health expenditures in the U.S. during 2010-2019 would increase by about 0.7 percent. The additional demand for health services could be difficult to meet initially with existing health provider resources and could lead to price increases, cost-shifting, and/or changes in providers’ willingness to treat patients with low-reimbursement health coverage.” (Page 19)
New Health Care Taxes: “We anticipate that such fees would generally be passed through to health consumers in the form of higher drug and device prices and higher premiums…” (Page 16)
Impact on employer coverage: “For example, some smaller employers would be inclined to terminate their existing coverage, and companies with low average salaries might find it to their – and their employees’ – advantage to end their plans, thereby allowing their workers to qualify for heavily subsidized coverage through the exchange.” (Page 7)
Individual mandate: “The penalty amounts for not having insurance coverage were not sufficiently large to have a sizable impact on the coverage decision.” (Page 6)
Independent Medical Advisory Board: “The Board’s efforts would be further complicated by provisions that prohibit increases in cost-sharing requirements and that exempt broad categories of Medicare expenditures from consideration.” (Page 9)
CLASS Act: “there is a very serious risk that the problem of adverse selection would make the CLASS program unsustainable.” (Page 14)
For the full report, click here.
ICYMI: Clive Crook Highlights The Importance of a Strong Coverage Requirement
Posted by The Campaign on December 04, 2009 at 1:41 PM
In an article in The Atlantic, Clive Crook cites past unsuccessful reform attempts due to weak coverage requirements.
Here are a few key excerpts:
“The issue is adverse selection. If you have guaranteed access to health insurance regardless of pre-existing conditions (which the bill would provide), why buy insurance at all until you actually need it? Healthy people will opt out, and the per-person cost of servicing the remaining customers will go up. If that happens in a big way, premiums will soar”
“The Senate bill's subsidies are pretty generous; but not everybody gets them. On the other hand, the penalties under the mandate are mild. Neither group of analysts has explained its reasoning in detail--though Oliver Wyman points to the unhappy experience of individual states that have combined guaranteed issue and rating reform with weak coverage requirements."
For the full article, click here.
ICYMI: Experts say reform without effective coverage requirement could lead to “Unintended Consequences”
Posted by The Campaign on November 16, 2009 at 7:02 PM
The Cleveland Plain Dealer reports on what certain provisions of reform could mean for Ohio's middle class families. The article notes that without an effective coverage requirement, many experts predict this could actually result in increased costs for families.
See below for a few key excerpts:“Leading business groups say health care reform plans before Congress that are supposed to help more businesses and individuals secure health insurance may have the opposite effect, making it cheaper for companies and taxpayers to pay fines than to buy coverage.”“Grant Bailey, a Cincinnati employee benefits consultant who advises 65 firms in Ohio and Kentucky, is convinced the proposals will make it so attractive to drop coverage that many companies won't be able to resist. If that happens, Bailey anticipates a rise in insurance costs and taxes that will squeeze middle class families.”"‘If there isn't an effective mandate that requires people to purchase coverage, it will drive up costs for everyone who buys insurance,’ warns Robert Zirkelbach of America's Health Insurance Plans, the health insurance trade association and lobbying group. ‘The fines in the bill are not effective.’"
For the full article, click here.
ICYMI: Maine's Rejection of the Coverage Requirement - A Cautionary Tale
Posted by The Campaign on November 11, 2009 at 10:46 AM
The New York Times' Gardiner Harris highlights concerns that Maine's health care mistakes will be repeated in the federal government's strategy for reform.
There are a few key excerpts below:
"Maine’s history is a cautionary tale for national health reform...Many on Capitol Hill have criticized national reform legislation for similarly doing little to tame costs."
“'These reforms are very well-intentioned, but in reality they have yet to produce the promised results or even be financially sustainable,' said Tarren R. Bragdon, chief executive of the Maine Heritage Policy Center."
"...one result is that premiums for younger people are relatively high. Although national proposals would require that nearly everyone get coverage or pay a penalty, Maine’s Legislature rejected such a mandate so many young people do not or cannot buy insurance — further skewing the insured pool to sicker and older people and making premiums that much higher."
For the full article, click here.
ICYMI: Wall Street Journal - Why an Effective Coverage Requirement is Critical
Posted by The Campaign on November 11, 2009 at 10:43 AM
In an Op-Ed piece in the Wall Street Journal, Janet Trautwein, CEO of of the National Association of Health Underwriters, explains that without a strong penalty for forgoing the mandate, the cost of health care will continue to increase.
Here are a few key exerpts:
"If the Senate fails to adopt a strong mandate...health-care costs will increase at a faster rate than they have in the past and as a result, vast numbers of Americans will remain uninsured."
"Why will costs increase? Because in addition to the individual mandate, two provisions that have become part of every reform bill advancing in Congress require insurers to sell policies to anyone who wants it but without charging premiums based on a person's health status. These provisions are aimed at making insurance affordable..."
"Sen. Max Baucus (D., Mont.), for example, is pushing a bill that would impose a $200 fine on anyone who decides not to buy insurance starting in 2013. By 2018, that fine would increase to $750...This is way too low."
"With the price of insurance far outstripping the cost of the fine, there will be a compelling reason for many people to pay the fine and only buy insurance when in need of some form of pricey care."
For the full article, click here.
ICYMI: House Bill Could Lead to Higher Costs for Younger People, Putting More Pressure on Costs
Posted by The Campaign on November 10, 2009 at 8:23 AM
The Wall Street Journal focuses on the issue of “age rating” and how much difference the costs of coverage can vary for young individuals versus older Americans.
Here are some key excerpts:
“The bill would limit how much insurers can vary premiums based on the age of the person buying the policy. The narrower the range, the lower the premiums for older people, a help to those who currently pay some of the highest rates for insurance and often need coverage the most. But such a limitation tends to raise premiums for younger folks, who are sometimes reluctant to buy coverage.”
In the House bill, the ratio can only be as much as 2 to 1, meaning older people could pay no more than twice what the youngest customers are charged.
“…a calculator on the Kaiser Family Foundation Web site gives a rough sense. It suggests that under the House's 2-to-1 cap, a 20-year-old would pay $3,169 in annual premiums and a 60-year-old would pay $6,339 for comparable plans, if they both had incomes above the subsidy-eligible level. Under a bill passed by the Senate Finance Committee, which had a 4-to-1 age-rating ratio, the 20-year-old would pay $2,258 and the 60-year-old would pay $8,357.”
“Industry officials argue that if young people are asked to pay more, fewer of them will buy insurance, and many may opt instead to pay the penalty for being uninsured.”
(CAMPAIGN NOTE: If this happens then the cost of coverage for everyone could dramatically increase. Click here to find out more about why a workable coverage requirement is a critical part of health care reform.)
For the full article, click here.
