Monday, July 06, 2015

Here comes the spiral

It's another one of those "go figure" moments that we enjoy so much:
Health insurance companies around the country are seeking rate increases of 20 percent to 40 percent or more, saying their new customers under the Affordable Care Act turned out to be sicker than expected. Federal officials say they are determined to see that the requests are scaled back.

Blue Cross and Blue Shield plans — market leaders in many states — are seeking rate increases that average 23 percent in Illinois, 25 percent in North Carolina, 31 percent in Oklahoma, 36 percent in Tennessee and 54 percent in Minnesota, according to documents posted online by the federal government and state insurance commissioners and interviews with insurance executives.
Yep -- that's 54% in Minnesota. Doing a quick back-of-the-envelope calculation for my own health insurance, that would mean an extra 3 grand a year for my family. For a lot of others, it would be worse. Can you afford an extra 3 grand?



3 comments:

Bike Bubba said...

You mean they didn't bend the cost curve like they promised?

Really, anyone who thinks that adding layers of bureaucracy and tens of thousands of pages of regulations to an industry will reduce costs ought to be committed to a padded cell, not given the keys to 1600 Pennsylvania Avenue. There ought to be a basic economics test for everyone seeking to go into politics, and if you assert that government can "bend the cost curve" on any question, you automatically fail.

3john2 said...

The health actuaries in my business knew there was going to be a huge claim spike with the number of people brought into the system; not just because there were more potential claims but because many of those had been previously uninsurable because of their conditions, or had relatively manageable conditions that had grown worse because they hadn't been receiving treatment due to a lack of coverage. Just how many this would be, and the potential size of the claims was hard to calculate. Everyone was trying to be as conservative as possible in doing so, knowing that the typical mitigation clauses such as annual and lifetime limits were now a thing of the past as well. I asked one of our executives last summer if the estimations we'd ended up with had been accurate. The short answer, leaving out the profanity, was "No."

Bike Bubba said...

RA: you mean when you change all the assumptions in one fell swoop, the actuaries have trouble estimating the impact? Shocker, that.

There is something perplexing about the authors of the Health Insurance Deform Act simultaneously creating a system that can only be run by a large gang of extremely competent actuaries and then inserting a number of assumptions that are actuarially impossible to predict. As we used to say in junior high....

smooth move, Ex-lax