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.”
Here is where I’m confused. Maybe Courant readers are too. Aetna, which lives in the same neighborhood as Ovation Benefits, reported to its industry analysts that it was expecting just single-digit increases in medical costs for its commercial business—6.5 percent, about the same as last year.
We strongly urged the press to explore this affordability question during debate on Obamacare. The adequacy of the subsidies, the question of indexing to keep them current with medical inflation, the adequacy of coverage that the policies will provide—especially from the “bronze” policies that are the cheapest in the exchanges, but are designed to cover only 60 percent of a person’s medical expenses—all need attention from the media.
Also, the press should explore the reason why Obamacare limited the amount insurers can charge older people to three times what they can charge young people. The reason: to inject a bit of fairness in what is an inherently unfair and inequitable health insurance system. Seniors will still pay more in absolute dollars, and millions will struggle to pay even those limited premiums. Is the industry suggesting a return to the bad old days, when it was worse?
The Courant didn’t ask such questions. But it did pass along a bunch of threats about how businesses might respond to the new rules. Shades of Papa John! The private sector will get very creative, Driscoll said. Some business strategies: keeping payrolls below 50 people so they don’t trigger penalties for not covering workers, splitting their workforce in two also to avoid penalties for not buying insurance. As for insurers—they might offer policyholders smaller networks, a remedy the paper didn’t explain.
To balance the many quotes from Driscoll, the Courant gave the last word to the executive director of the Connecticut Health Policy Project, an education and research group, which said “we have to have a grownup conversation rather than just slash and burn.” What the heck does that mean? The piece sorely needs voices from experts who understand these things, and who are not part of the insurance industry.
The Second Opinion, CJR’s healthcare desk, is part of our United States Project on the coverage of politics and policy. Follow @USProjectCJR for more posts from this author and the rest of the United States Project team. And follow Trudy Lieberman @Trudy_Lieberman.