This is the second in a series we’re calling Exchange Watch, which will keep an eye on the rollout of the healthcare exchanges in the states mandated by the Affordable Care Act.
On March 3 the Hartford Courant published a press release—er, news story—with the headline, “As First Year Of Health Insurance Mandate Nears, Prices Could Shock Connecticut Buyers.” Uh oh! Consumers are in for huge rate increases. “Ugly numbers caused by new rules, new fees, and old pressures on medical costs,” is how the Courant summed up the dilemma.
The Courant is the major newspaper in Hartford, the insurance capital of the world, and we’re accustomed to a hometown paper looking out for hometown business. But Sunday’s story was a doozy. It read like the script from the lobbying campaign “Time for Affordability”—launched by America’s Health Insurance Plans, (AHIP), the health carriers trade association. That campaign is designed to educate lawmakers and the public about the insurers’ agenda, which includes removing Obamacare’s restrictions on what insurers can charge older people, and getting rid of a special tax levied on insurance companies to fund subsidies for the uninsured. Insurers also wouldn’t mind wiping out coverage mandates in the states, which they’ve been harping on for years. Mandates require insurers to cover certain services, like maternity care, hearing aids for kids, breast cancer screening, and diagnostic tests for diabetes. Many of these get right to the heart of what’s decent coverage, and are part of the essential benefit package called for by Obamacare.
Insurers argue that all their legislative proposals will make insurance more affordable. From their point of view, cheaper policies would make it easier for younger, uninsured Americans to buy coverage. And more younger, healthier people buying coverage would in turn mean that the risk of insuring sick people—which they will have to do in January under Obamacare—will be more widely spread. If just the sick buy coverage, insurers’ bottom lines are in big trouble.
As we’ve reported, affordability is a big problem in the state. Even the head of Health Access CT, Connecticut’s exchange, announced that the insurance policy the state chose for the model plan, one that sets the bar that other policies must reach, is no longer affordable. Price is a potential problem. “The insurers are worried about it, regulators are worried about it, the exchange folks are worried about it,” Keith Stover, the insurers’ Connnecticut lobbyist, told the paper.
But while the state may have a legitimate worry about affordability, that’s no excuse for the Courant to frame its story as an industry press release, stacked with quotes from industry sources. That’s weak reporting, plain and simple.
Implementing their legislative agenda may be a heavy lift for insurers—hence the effort to woo the press to their cause. AHIP has not been shy about enlisting the help of the media in its campaign and features on its website media stories that have passed along its self-serving studies and other sympathetic story frames. The Courant story fits right in. It hits most of the group’s talking points.
The young adult argument: The story leaned heavily on insurance company officials like Brian Driscoll, chief operating officer of Ovation Benefits, an employee benefits broker located in Farmington. He told the Courant that price hikes will be especially steep for people in their 20s and 30s who need health coverage to comply with Obamacare. “We’re going to see price differences play out measurably, significantly for the younger population.” The reason: Connecticut now allows insurers to charge older people six times more than younger ones. Obamacare limits the increase to three times as much.
Question: Where have we heard that before? Answer: in an industry-funded study by the Oliver Wyman Co, a consulting firm that has done several studies for AHIP and whose numbers about young people paying a lot more made the rounds in the press in early January. Like many other news outlets, the Courant did not discuss the money relationship between Wyman and AHIP.
New pressures on prices: Insurance companies like to point out that they will now have to pay for more services under Obamacare, which could make policies less affordable. The Courant passed along that message. It also noted that there will be taxes to support Obamacare’s subsidies to help people buy coverage. Driscoll told the paper that “fees are also going up for the plans businesses and individuals buy through exchanges.” Driscoll claimed these would account for five to 10 percent of a price increase. He forecast another year of “double-digit medical inflation.”