During the long debate over health reform, one issue barely discussed was whether the Americans who would be required to buy health coverage could afford it. Politicians and the press brushed aside affordability and buried it under the rhetoric. CJR urged reporters to examine the affordability matter. We interviewed Democratic Sen. Ron Wyden, for example, one of the few Beltway types openly skeptical about how affordable insurance would be under Obamacare. The subject did not fit well with the media’s idea of news, Wyden told us.
It sure does fit now. What a difference three years makes! Over the last two months the affordability question has suddenly become hot. News outlets from NBC’s Nightly News and Forbes to The Hill and Politico have reported that Americans, especially young adults, might not be able to pay for insurance the law requires them to have. The theme of their stories: young people are in for sticker shock.
Why the surge in interest? Mostly because the marketing machine operated by the insurance industry’s trade association, America’s Health Insurance Plans (AHIP), is at hard at work.
AHIP is peddling appealing messages about affordability to the media, which are passing them along to the public. They’ve also passed along AHIP’s legislative wish list—a list that the administration supporters fear could weaken some of the law’s provisions.
A big target on that list is Obamacare’s limit on what insurers can charge older people buying in the so-called individual market. The insurers would like to charge them more, and they are putting forward the plight of young people as their rationale.
The Affordable Care Act says premiums for older Americans can be no greater than three times what they are for younger ones, a restriction meant to protect seniors, but which carriers believe may not bring in enough revenue to cover the cost of claims from an age group likely to have health problems. They argued against this 3 to 1 arrangement during the health reform debate, instead pushing for higher ratios, like 5 to 1. Today they are lobbying for a delay in implementing the restriction. That would give them time to convince lawmakers to change the law.
Media outreach seems to be part of the strategy. Are the insurers peddling hysteria or reality?
Insurance companies argue that, under the rules that come with Obamacare, coverage will become too costly for young, healthy people, whose premiums they need in the risk pool to cover the claims of the older, sicker people the law says they must now must insure. The high medical costs associated with seniors, they worry, could squeeze bottom lines and anger the Wall Street gods. After all, insurers are not charitable institutions.
At heart, their fears stem from complexities and contradictions in the reform law—the difficulty of trying to achieve universal coverage and fairness in a private, for-profit health system that’s inherently inequitable and unfair.
AHIP’s president, Karen Ignagni, took the insurers’ case to a conference on the Business of Healthcare Post-Election, held at the University of Miami in early February. The Miami Herald reported that she had “strong ideas about tweaks that could minimize disruption” in the insurance market. One was to postpone for two years the 3 to 1 rate increase provision, so, The Herald said, “younger people could sign up for insurance without huge sticker shock.”
AHIP isn’t shy about claiming credit for the sudden surge of media coverage on a topic that editors once considered a yawner. Its message crafters know that the press likes controversy, and there’s controversy aplenty about the sky-high cost of health insurance. The group’s website boasts that “AHIP has been raising awareness of factors driving premiums though “Time for Affordability”—the name for its campaign—“and these efforts have been picked up by a variety of news outlets over the past few weeks,” The site lists a number of news hits.