Wednesday, June 30, 2010

Individuals see health insurance costs jump-report

http://www.reuters.com/article/idUSN2125993520100621

Individuals see health insurance costs jump-report
Mon Jun 21, 2010
Susan Heavey

* Kaiser Family survey looks at those who buy own coverage
* Future impact of health care reforms unclear
* Industry defends rate hikes, points to cost of care (Adds reaction, quotes, share movement)

WASHINGTON - U.S. health insurers are raising prices by an average of 20 percent for working age adults who buy their own policies, according to a survey released by a nonprofit healthcare group on Monday.

Such premium cost increases affected more than three-quarters of the 14 million U.S. adults who buy their own health plans and caused some to either seek a cheaper option with fewer benefits or switch insurers altogether, the Kaiser Family Foundation study showed.

The findings come as the Obama administration works with insurers to implement some of the new rules under the recently passed healthcare law, which aims to expand consumers' coverage while cracking down on discriminatory industry practices.

U.S. Health Secretary Kathleen Sebelius has blasted health insurance companies such as WellPoint Inc for their premium hikes in individual policies sold in California and other U.S. states.

"With people in the individual market being hit with average increases of 20 percent, the survey shows that the steep increases we have been reading about over the last several months are not just extreme cases," Kaiser Family Foundation Chief Executive Officer Drew Altman said in a statement.

Although individual, or "nongroup," policies are a small slice of the health insurance industry, they have attracted sharp scrutiny in recent months amid reports of price increases as high as 39 percent.

The survey of nearly 1,040 working-age adults from 18 to 64 years of age was conducted in late March and early April. Most responses came on or before March 23, when President Obama signed the healthcare bill into law.

Although individual, or "nongroup," policies are a small slice of the health insurance industry, they have attracted sharp scrutiny in recent months amid reports of price increases as high as 39 percent.

Robert Zirkelbach, spokesman for the industry's lobby group, America's Health Insurance Plans (AHIP), defended the industry's premium hikes, citing "soaring medical costs" and the number of younger, healthier consumers who are opting out of coverage. AHIP fought the healthcare reform bill.

While most working-age adults who have insurance get it through their employers, roughly 14 million people in the United States -- usually small business owners or those whose companies don't offer insurance -- buy their own policies.

In comparison, 157 million adults under 65 have employer or "large group" policies, while roughly 45 million people 65 and older have coverage through the federal government's Medicare program for the elderly and disabled.

Besides WellPoint, other health insurers include Aetna Inc, Cigna Corp, Humana Inc, UnitedHealth Group Inc, Health Net Inc, Amerigroup Corp and the Blue Cross Blue Shield network.

Kaiser's findings also found those who have to buy their own policies still worry about their access to care and whether their insurance will adequately cover them.

"People in this market are not expressing much confidence in their level of protection that's provided by the plan," Mollyann Brodie, vice president and director of Kaiser's Public Opinion and Survey Research, told reporters. They also have higher deductibles and large out-of-pocket costs, she added.

CHANGES COMING

Many insurers have already begun adopting some of the new health law's reforms ahead of schedule, such as ending lifetime caps on coverage and stopping cancellations when a policyholder gets sick.

But other reforms, such as protections for those with pre-existing health conditions, do not go into effect until 2014.

By then, all Americans will be required to have health insurance or risk paying a fine. States can also set up health insurance exchanges aimed at providing consumers one-stop shopping to compare plans.

Oversight of insurers' rates is still left largely up to individual U.S. states, although companies will have to publicly justify any increases.

Other rules governing how insurers spend premium dollars on actual medical care versus administrative expenses also aim to help bring down insurers' costs and, ideally, premiums.

It remains to be seen just how the various changes will affect health insurers, which saw their shares buffeted amid the health reform debate. Companies are now awaiting clearer rules from the Department of Health and Human Services.

Kaiser said 52 percent of survey respondents who buy their own coverage said they would keep their current plan next year, while 32 percent said they were not sure they would do so. Another 14 percent said they would switch companies.

"In the vast majority of states, the nongroup market is subject to substantially less regulation than group insurance," the Kaiser report said. "Much will change under the new health reform law."

Various studies have shown the nation's healthcare costs outpace inflation, rising more than 6 percent a year.

"Insurance is still going to be expensive because healthcare is expensive," said Gary Claxton, vice president and director of the Kaiser Family Foundation's Marketplace Project, but he said many of the reforms should help increase competition for those shopping for their own coverage.

The Morgan Stanley Healthcare Payor Index ended down 0.8 percent and the S&P Managed Healthcare Index fell 0.5 percent, while the overall S&P 500 Index lost 0.4 percent. (Reporting by Susan Heavey; Editing by Lisa Von Ahn and Tim Dobbyn)

2 comments:

belindalang12 said...

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