To hear Chicken Little Republicans talk about it, the sky will fall if private for-profit health insurers are allowed to hike premiums as high as some states might experience this year.
Ohio Sen. Rob Portman conveniently calls himself an independent voice at election time, but on the issue of health care coverage, as he is on virtually all of standard GOP issues, he reliably joins the GOP’s Greek Chorus in criticizing the Patient Protection and Affordable Care Act [ACA] passed in early 2010, that lit the fuse on the Tea Party that continues to burn bright to this day.
“With wages largely flat or even declining and the cost of living going up, millions of middle-class families in Ohio and across the country are already feeling squeezed,” Rob Portman said, The Dayton Daily News reports. “The Obama administration confirms what too many Ohio families already know from experience: Health care costs are going up, while health care choices are going down.”
Portman made his statement following reports about an announcement from President Obama’s administration that health care premiums for the second-lowest cost “silver” plans, sold through federally facilitated health insurance marketplaces in 39 states that include Ohio, will rise by an average of 25 percent, from $242 a month this year to $302 next year. Sen. Portman, who has been afraid to meet the press through out his hide-and-seek campaign this year, consistently fails to tell Buckeyes an important fact: that Ohio will not experience the larger rise in premiums under the ACA other states will see. He also fails, intentionally, to say help is waiting in the wings.
To right the communication imbalance, Ohio’s senior senator in Congress, Sherrod Brown, told Plunderbund Wednesday that more work is needed to bring down health care costs. “At the same time, it’s important to remember that 80 percent of Ohioans shopping on the exchanges are eligible for tax credits to help them tackle any increase in their premium costs,” he said, adding, “When premium costs rise based on the market, the tax credits put in place by the ACA will also rise to help keep coverage affordable.”
Sen. Brown referred to a new report released by HHS showing that 51 percent of Ohio Marketplace consumers will be able to find a plan with a premium of less than $75 per month, and 60 percent will be able to find plans with premiums below $100.
Meanwhile, 80 percent of Marketplace consumers in Ohio receive tax credits designed to protect consumers from premium increases and help make coverage affordable. Average rate increases reported with the preliminary rate filings do not account for tax credits, which will also increase to help compensate the increase in premium costs, Brown staff told Plunderbund. In addition, an estimated 64,000 Ohioans currently paying full price for health insurance in the off-Marketplace individual market could be eligible for tax credits if they purchase 2017 coverage through the Marketplace.
Ohioans shopping for health care coverage on the state’s federally run Marketplace can purchase any available plan regardless of health conditions, and tools such as the doctor lookup and out-of-pocket cost calculator can aid them in their shopping as they compare plans.
Average rate changes reported in rate filings assume that all consumers stick with their current health insurance plan, but that’s not always the case. For example, last year, 36 percent of returning Marketplace consumers in Ohio switched plans, helping them save an average of $648 annually.
Average premiums would decrease by $63 per month, or 33 percent, from 2016 to 2017, if every returning consumer in Ohio selected the lowest-cost plan available within their current metal level. It’s a fact that many consumers do not choose the lowest-cost plan available, because they’re willing to pay more for a wider network or other plan features, which only confirms that affordable options for 2017 coverage are available to consumers who shop around to find a better deal.
Other health care experts explain why premiums are rising. Larry Levitt, Senior VP at the widely respected and listened to Kaiser Family Foundation, cites three reasons for this year’s rise. The first is that more sick people than anticipated enrolled, and that insurers are just catching up to the fact that premiums weren’t covering their costs.
The second reason Levitt points to is the end of the reinsurance program, which helped pay for very sick enrollees. Insurers need to raise premiums to account for the end of that program. His third reason is that health care costs appear to be trending up again, affecting all insurance plans, not just those in the ACA exchanges.
Writing at the Center for Economic Progress and Research, Dean Baker puts the news in perspective in a way mainstream media refuses to do. Baker notes that the focus on premiums is exclusively on the relatively small segment of the population getting insurance through the exchanges, and specifically through the exchanges like Ohio’s managed through the federal government.
“According to the latest numbers, 12.7 million people are now getting insurance through the exchanges (roughly 4.0 percent of the total population),” he notes. Many states, such as California, he says, have well run exchanges that have been more successful in keeping cost increases down.
Baker theorizes that for-profit health insurers “probably priced their policies too low initially,” so that even though this year’s premium increases seem high, they are still lower than had been expected in 2010. In the last years years under the ACA, there has been a sharp slowing in the pace of health care cost growth. “While not all of this was due to the ACA, it was undoubtedly a factor in this slowdown,” he says. Baker notes that in the years from 1999 to 2010, health care costs per insured person rose at an average annual rate of 5.7 percent. In the years from 2010 to 2015 costs per insured person rose at an average rate of just 2.3 percent.
Almost 250,000 Ohioans signed up for marketplace coverage, while an additional 64,000 state residents who bought individual health coverage outside the marketplace will fore go federal tax credits that counterbalance rate rises. Meanwhile, at least 60 percent of Americans gain health insurance through an employer, while another 16 percent use Medicare or Medicaid followed by just nine percent who receive coverage through individual insurance plans. Another 2 percent are covered by military plans such as Tricare or the Veterans Administration.
Ohio also benefits from more insurers participating than other states, where in some cases the choice is just one. Nonetheless, Ohio only have 11 competing next year, down from 17 the year before.
Sen. Portman voted against so-called Obamacare as did his GOP colleagues. He’s been unhelpful as a lawmaker even though he rails against it without any specific plan other than the power of the marketplace to put forward. Portman could push to allow Medicare to negotiate for lower drug prices, a very competitive marketplace thing to do, but he refuses to do that.
Sen. Brown, on the other hand, knows that high-prices for drugs should and can be curbed, but until and unless Democrats can control the Senate and regain the White House, and maybe the House in 2018, signing a bill to check the scandalous escalation in pharmaceuticals appears to be the impossible dream. Other measures to stop the rise in medical costs also abound, but senators like Rob Portman have no interest in pushing them, since it would bite the political hand that feeds him and other Republicans who love to whine about health care costs but who have no backbone to do required surgery to cut costs.