Health premiums rise as states consider how they'll implement reforms

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Sep 18 2010

Reuters: Overall health insurance premiums rose 7 percent in 2009, even as the number of people with health coverage fell. "Individual premium revenues rose 15 percent while group premiums, which involve mostly employers, rose nearly 3 percent, according to the report from the National Association of Insurance Commissioners (NAIC), an organization whose prominence has grown following passage of the new U.S. health reform law."

"'The takeaway message probably is that as we're working to implement this new insurance reform, healthcare costs continue to go up, which does drive up the cost of insurance,' Kansas Insurance Commissioner Sandy Praeger, who chairs the NAIC Health Insurance and Managed Care committee, said in an interview." Praeger said people who lost their jobs and then bought coverage on the individual market probably helped premiums increase as did the threat of a pandemic of the H1N1 flu. Additionally, "[a] key ratio typically used to define the percent of premiums spent on medical costs increased to 84.1 percent in 2009 from 83.2 percent the prior year, according to the report." Under the new health law, insurers will have to spend 80 percent of the premiums from individual and small group policies on medical care and 85 percent from large group policies. (Krauskopf, 9/16).

Des Moines Register: Iowa officials may run ads touting another part of the health overhaul: high-risk insurance pools. "The new plan, called HIP Iowa-Fed, offers standard-rate insurance policies to uninsured Iowans with medical conditions. Those conditions, such as cancer or diabetes, make it hard for people to find affordable coverage on the private market. The plan is subsidized with a $35 million federal grant, which is supposed to help cover about 975 Iowans until 2014. Cecil Bykerk, executive director of the effort, said today that only 47 Iowans have applied for the new program, which opened early last month." Premiums in the pool are less than those historically for high-risk pools, but they are still too expensive for many people (Leys, 9/16).

The (Frederick County) Gazette: In Maryland, insurers are "cutting costs and taking other measures to prepare for a changed landscape sparked by the new federal health reform law." In addition to the state's high-risk pool in Maryland, a "few other provisions of the new law take effect Thursday. Those include covering dependents up to age 26, prohibiting insurance companies from denying coverage to children younger than 19 because of a pre-existing condition, and not allowing insurers to impose lifetime dollar limits on essential benefits such as hospital stays." In the meantime, some insurers say that those provisions won't significantly alter how they do business in the short-term, but that they are also preparing for higher numbers of people who will soon seek insurance coverage (Shay, 9/17).

Winston-Salem (N.C.) Journal: In North Carolina, a million people will be eligible for help paying for health premiums in health insurance exchanges slated to begin in 2014. "Nearly 96 percent of those eligible for the tax credits on premiums would be working families, including 891,900 in families with at least one full-time worker and 80,300 in families with at least one part-time worker. For those without health insurance, the tax credits help them pay the premium for coverage bought through an exchange. The credits to pay the premiums are available when the person enrolls in the plan." Consumer advocacy group Families USA estimated the number that could be aided by the provision (Craver, 9/17).

National Journal: Meanwhile, a White House official says the new health law will augment the estimated 3.2 million health care jobs slated to be created through 2018. White House Office of Health Reform director Nancy-Ann DeParle said at a National Journal forum that "[s]lowing cost growth would lower the deficit, raise public savings, and eventually lead to job creation and lower unemployment. … But panelist Thomas Miller of the American Enterprise Institute was skeptical of what he called the administration's 'marketing pitch.' 'Given that the larger economy is disappointing, we have to be told that the health law, and the ordeal we just went through in the last years, was actually to create jobs,' Miller said" (Fung, 9/16).

This article was reprinted from khn.org with permission from the Henry J. Kaiser Family Foundation. Kaiser Health News, an editorially independent news service, is a program of the Kaiser Family Foundation, a nonpartisan health care policy research organization unaffiliated with Kaiser Permanente.