The ammo for the surge seems to be a study by actuaries at Oliver Wyman, a consulting firm, and reported in Contingencies, a publication of the American Academy of Actuaries. The firm’s analysis showed that under Obamacare, single-coverage premiums for people 21 to 29 who are not eligible for government subsidies would increase by 42 percent over what the premiums would be without the new law. Those 30 to 39 would find their premiums up 31 percent, while 60 to 64 year-olds would see an increase of only one percent. AHIP sent out this “news” in a press release on January 7. Most media coverage showed up after that.
The Oliver Wyman firm does not exactly have an arms-length relationship with AHIP, a point skipped over in press accounts. AHIP’s press release said “AHIP provided support to Oliver Wyman for earlier actuarial modeling and analysis similar to that highlighted in the Contingencies article.” We asked AHIP if it paid for that study, but got no response.
Also on AHIP’s wish list: Insurers working with small businesses want to repeal a health tax levied on insurance carriers, which they argue will be passed on to employers in the form of higher premiums.
In December AHIP sent out a press release announcing another study, showing the impact of the health insurance tax that will be levied to pay for subsidies for the uninsured. The release disclosed that, yes, Oliver Wyman had “conducted a new state-by-state analysis for American’s Health Insurance Plans.” That analysis, AHIP said, built on a 2011 report that showed the impact of the annual tax assessed on insurance plans. The 2011 report—also paid for by AHIP—said that tax would raise premiums in the insured market by 1.9 to 2.3 percent on average in 2014. Many media stories also referred to the health insurance tax and reported those numbers from Wyman.
AHIP has been upfront about its support for Oliver Wyman studies, but its disclosures seem to have escaped the press. Politico reported “the health insurance tax is going to have the largest impact” on premium hikes “according to a study by Oliver Wyman that has been touted by the insurance industry.” The word touted somehow doesn’t quite mean the same thing as paid for. Politico did link to the study if anyone wanted to check it out.
The Idaho Statesman picked up the numbers about younger people paying more and noted they came from Wyman, but didn’t show how the consulting firm was connected to AHIP. A post on the Fox News blog came the closest to fuller disclosure. It reported that premiums for individuals and small groups were projected to increase roughly two percent this year “according to a widely cited analysis by the insurance industry.”
Some reporters moved beyond the press release and framed a larger story, talking about insurance rate hikes that are occurring in several states. Noam Levey offered readers an overview in the Los Angeles Times. He passed along the same meme: state officials have sounded warnings that the young “may see considerably higher prices than expected.” It was the same story in the Alaska Dispatch, where writer Alex DeMarban talked to the state’s insurers. The president of Premera Blue Cross Blue Shield of Alaska said some changes due to the law would push costs “toward rate-payers who earn good money, especially younger ones.”
The press generally portrayed younger people as “losers” in this situation, as Avik Roy did in Forbes : A “piece of the law forces young people to pay dramatically more for health insurance in order to partially subsidize the cost of insurance for older Americans.” But news stories did not tend to report what happens to older folks, a group, by the way, about the same size as young people. Recent numbers from The Commonwealth Fund, based on the government’s current population survey, show that older people, ages 50-64, make up about 21 percent of the 17 million people currently in the individual market. People ages 19-29 make up 23 percent—not much difference. [Full disclosure: Commonwealth supports The Second Opinion].