AHIP Chief Discusses Reasons Behind Premium Hikes
MARTINSVILLE Higher medical costs, especially pharmaceuticals; sicker enrollees that expected; more people than expected paying the penalty rather than signing up; and the expiration or lack of funding for risk mitigation programs are some of the reasons for sizable increases in premiums looming under the Affordable Care Act.
That's according to Henry County native Marilyn Tavenner, president and chief executive officer for America's Health Insurance Plans, the trade association for the health insurance industry, and former administrator of the Centers for Medicare and Medicaid Services.
She attended an event of the Piedmont Virginia Dental Health Foundation Friday night at Chatmoss Country Club.
The Affordable Care Act, commonly known as Obamacare, targets the small percentage of Americans who are self-employed or don't have access to employer-sponsored or government-sponsored (such as Medicare or Medicaid) health insurance plans, Tavenner said in an interview.
According to Tavenner, her association's website and news media reports, Obamacare, which took effect in 2013, included programs called the 3Rs reinsurance, risk corridors and risk adjustments -- to reduce risks for insurers during the transition to and under Obamacare and to create a stable, affordable market for consumers. Two of those programs expire this year and Congress cut funding for the other one.
Before Obamacare went into effect, insurance premium increases of 25 percent or more were not uncommon, Tavenner said. For a time, after Obamacare went into effect, insurance premium increases did seem to moderate going up in the 3 to 8 percent range but then increases became larger, she said.
Some other reasons for increases in insurance premiums under Obamacare are sicker people than had been expected are signing up; and more people than expected are choosing to pay the penalty rather than sign up because they think it's cheaper for them or that they think they're healthy and don't need coverage, Tavenner said.
Places hit the hardest by the premium increases include parts of Southside, an area Tavenner is very familiar with, having grown up in Fieldale.
The Associated Press reported Oct. 24 that in 2017 before taxpayer-provided subsidies, premiums for a midlevel benchmark plan under Obamacare will increase an average of 25 percent across the 39 states served by the federally run online market, according to a report from the Department of Health and Human Services. Some states will see much bigger jumps, others less.
Moreover about 1 in 5 consumers will only have plans from a single insurer to pick prom, after major national carriers such as United Health Group, Humana and Aetna scaled back their roles.
Tavenner said the question now, with Donald Trump having been elected president, is how to repeal or replace Obamacare while keeping popular parts of it, such as coverage of pre-existing conditions and allowing children to remain on parents' plans until age 26.
Paul Collins reports for the Martinsville Bulletin and can be reached at [email protected].
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