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.
This is reminiscent of the media coverage of the Clinton health plan proposal back in 1993-1994. All health policy experts, including conservatives, knew that health reform required a move toward community rating of health insurance premiums for everyone, which means that younger and healthier Americans would have to pay somewhat more (albeit subsidized for lower-income folks) and older and sicker Americans would pay somewhat less but that the younger and healthier people would utlimately benefit when they got older and sicker. But when the Senate Finance Committee held hearings featuring Hillary and others explaining this basic feature, the NY Times and other media blared headlines along the lines of "Clinton plan would drive up premiums for younger people," and elected officials and the public got very nervous about health reform. Just like now, most of the media coverage did not put this into a policy perspective, why this was a necessary and desirable shift.
#1 Posted by Harris Meyer, CJR on Mon 11 Mar 2013 at 12:56 PM
Harris, thanks for that important context and history.
#2 Posted by Trudy Lieberman, CJR on Mon 11 Mar 2013 at 04:07 PM
As we get closer to the date exchanges will go live I and others with families and small businesses who believe the exchanges should be substantially more cost realistic are getting concerned. I keep hearing the use of the term 'individual' plans. The whole point of buying through the exchange should be that we can now as individuals get the same 'group rate' translate lower cost, better coverage, better deal that large employers get. This assumption of a better deal is based on the fact that although individuals and small businesses would be in the exchange market place when you look at the total number of participants you are looking at a market segment with thousands or tens of thousands of participants. This should translate into buying clout and a market place that insurers do not want to be locked out of.
An additional enhancement to the CT. exchange would be to require negotiation of rates and perhaps even a bid process where high priced insurers would be barred from participation in this large and significantly competitive market segment.
#3 Posted by Ken, CJR on Wed 26 Jun 2013 at 04:35 PM