Friday, February 12, 2010

Single Buyer insurance Market Bad Deal, But is Part of Rep. Ryan's Dumb Plan

The clarion call to stem the tide of health care costs faded under the din of tea party protesters, which was the purpose of the debates in the first place, has now come rushing back with a vengeance. A few big reminders were about to hit Americans pocketbooks again.

AP) - Consumers in at least four states who buy their own health insurance are getting hit with premium increases of 15 percent or more - and people in other states could see the same thing.

Anthem Blue Cross, a subsidiary of WellPoint Inc. …. notifying some of its 800,000 individual policyholders in California that it plans to raise rates by up to 39 percent (in a few months.)

The Anthem Blue Cross plan in Maine is asking for increases of about 23 percent this year for some individual policyholders. Last year, they raised rates up to 32 percent.

Kansas had one recent case where one insurer wanting to raise most individual rates 20 percent to 30 percent … it was not Anthem.

And in Oregon, multiple insurers were granted rate hikes of 15 percent or more this year after increases of around 25 percent last year for customers who purchase individual health insurance, rather than getting it through their employer.

This is the free market health care system we have in place right now. Consider what would happen if Republican Rep. Paul Ryan were to get everyone into that free market, without the aid the collective buying power of employers, to buy insurance on their own. It's the individual market that's allowed insurers the opportunity to raise rates so steeply, with no signs of stopping, even in a Great Recession.

Premiums are far more volatile for individual policies than for those bought by employers and other large groups, which have bargaining clout and a sizable pool of people among which to spread risk. As more people have lost jobs, many who are healthy have decided to go without health insurance or get a bare-bones, high-deductible policy, reducing the amount of premiums insurers receive.

In Maine, where Anthem dominates the market, its proposal has several consumer groups planning big rallies at two public hearings on the rates, on Feb. 22 and 24.

Under Anthem's proposal, a family of four could be charged up to $1,876 per month if the proposed rates are allowed to take effect in July.

Despite the bad timing of these price hikes, insurers are confident health care reform is dead on arrival. They may be right.

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