Obamacare not responsible for premium increases, study says

[shira]

Looks like Obamacare wasn't responsible for most of the premium increases the past year, and any contribution it does make to increasing premiums is expected to go down.

But come on, righties, tell us again why Obamacare is so terrible, why it's a "train wreck."

Article

The rising cost of healthcare is a big budget-buster for many families, and a lot of them fault the Affordable Care Act for straining their finances. But the controversial healthcare law appears to be getting far more blame than it deserves.

New analysis by the Commonwealth Fund examines data explaining the biggest increases in healthcare premiums for certain plans, and essentially lets Obamacare, as the ACA is known, off the hook.

The study found that rising medical costs are the biggest cause of higher insurance premiums — which has been the case for years. About 30% of insurers didn’t cite any cost increase linked to Obamacare. Among the other 70%, new taxes and fees associated with the ACA -- and that started in 2014 -- accounted for about one-third of premium increases. But many of those fees will decline and some will phase out altogether.

“It’s notable there aren’t more insurers blaming the ACA for these increases,” says Mark Hall, a law professor at Wake Forest University who co-authored the Commonwealth study. “Premium increases are being driven by medical costs, not by corporate profits, and not to a strong extent by government regulation.”

Obamacare critics have predicted all sorts of cost increases and other dire outcomes on account of the law, and it will take years before the ACA’s full impact on the healthcare system and the broader economy can be measured effectively. The Commonwealth study tackles a small but important part of the law’s economic impact: Its effect on the cost of policies offered in the individual and small group markets. These are policies typically purchased by people who don’t get coverage through a big company and don’t qualify for Obamacare subsidies or other government programs such as Medicaid.

These are the types of policies that ignited a furor over Obamacare when insurers began cancelling them en masse in the fall of 2013, because many of them didn’t cover everything the new law required starting in 2014. That fiasco invalidated President Obama’s claim that “if you like your existing health insurance, you can keep it,” and could go down as the biggest embarrassment of his presidency. In response, Obama modified the rules to grandfather in many policies that otherwise would have been canceled.

The Commonwealth researchers focused on individual and small-group plans with premiums that rose by more than 10% from 2013 to 2014, because the ACA requires insurers to file documents with regulators when premiums exceed that threshold, explaining what happened. The government can’t tell insurers what to charge, but the idea is that the disclosure requirement will limit price gouging and give consumers insight into why costs go up.

Following the natural trend in rising medical costs

The researchers examined 113 filings regarding large premium increases and found that the rising cost of doctor visits, hospital stays, surgeries, tests, medications and other types of direct care were responsible for 84% of the premium hikes in the individual market and 78% in the small group market (which typically includes small-company plans and others with only a minor volume discount). The filings also suggest the typical patient is receiving more health care, another reason medical costs are going up.

Most Americans don’t face premium increases as high as those reflected in the Commonwealth study. In its annual survey of health insurance costs, the Kaiser Family Foundation found that premium increases during the last year averaged just 3% for a typical family plan and 2.4% for an individual plan. What has changed, however, is that many insurance plans cover less or come with higher deductibles, which is pushing up out-of-pocket costs for many patients even as premiums stabilize.

The types of policies studied by the Commonwealth researchers account for less than 10% of all U.S. policies, yet they probably represent overall trends—and may even overstate them. “We’re looking at the worst-case scenarios,” says Hall. “I’m sure the findings are true of the large plans as well.” If that turns out to be true, controversy over the ACA should subside over time, as dire predictions about the law’s nefarious impacts fail to materialize.

Many businesses dislike the ACA and the additional rules it imposes on them, but the law has been good news for health insurers, since they’ve signed up millions of new customers. In its 2014 earnings report, for instance, UnitedHealth Group (UNH) reported higher net income than expected, partly because the ACA boosted enrollment in its health plans. The company’s stock rose, as did shares of competitors such as Aetna (AET), Cigna (CI) and Anthem (ANTM). Higher enrollment helps insurers minimize cost increases that often get passed along to consumers.

The future of the ACA remains uncertain, since the new Republican Congress could modify it and the Supreme Court might even overturn a central pillar of the law. But the ACA is basically becoming a central part of the U.S. healthcare system, with uncertainty about its impact fading. Maybe we’ll be able to live with it after all.

 

[Hayabusa Rider]

I read that site and I'll wait until some neutral party comes to the same conclusion.

 

[Newell Steamer]

ACA opposition is generally unfounded, anecdotal and late;
- Death Panels
- Cousin's brother's friend who use to live in FL use to work for someone who knew someone that once overheard someone say ACA was pretty bad
- some guy, about 1/2 decade ago, said it was bad

 

[shira]

I read that site and I'll wait until some neutral party comes to the same conclusion.

I see. And while you and other righties have "waited" (and continue to wait) for a reputable study that finds Obamacare to be a significant driver of premium increases, none of you have been starting and contributing to threads blaming Obamacare for signficant premium increases?

But who needs stinking studies? If the ACA "feels" bad, it must be bad. It's the whole truthy thing all over again.

 

[PokerGuy]

I see. And while you and other righties have "waited" (and continue to wait) for a reputable study that finds Obamacare to be a significant driver of premium increases, none of you have been starting and contributing to threads blaming Obamacare for signficant premium increases?

But who needs stinking studies? If the ACA "feels" bad, it must be bad. It's the whole truthy thing all over again.

Oh, I forgot, we're just supposed to take a "study" by some biased group with a pre-determined conclusion as gospel.

Regardless, the study shows that medical costs are going up as they always have (ie, obummercare didn't fix anything or reduce costs -- one of it's selling points), and it shows that in addition to those costs going up, there is another layer of obummercare driven costs on top of it. So as consumers, we got the usual increases we saw in the past, plus we get a nice helping of additional costs driven by obummercare. But hey, they do mention those additional costs will decrease over time. Wonderful.

Keep in mind this is only looking at the costs as reported by some insurers, it doesn't take into account the additional costs caused by obummercare regulations that are borne by employers, and all the other ancillary problems.

So basically complete fail, as expected and as usual.

 

[sactoking]

From the Commonwealth web page overview:

Analyzing these filings for renewals taking effect from mid-2013 through mid-2014, this brief finds that the average rate increase submitted for review was 13 percent. Insurers attributed the great bulk of these larger rate increases to routine factors such as trends in medical costs. Most insurers did not attribute any portion of these medical cost trends to factors related to the Affordable Care Act.

1) Note: "renewals"
2) Note: "mid-2013 through mid-2014"

In other words, while this might be the time period that had the most accessible data, it's also the time period that is least likely to be affected by the ACA market reforms.

Many, many large and small group plans early renewed in Q4 2013 just so they could avoid the market reforms. Their "ACA related" increases won't be effective until they renewed in Q4 2014, which is outside of the sample period. Of course, that's assuming that they're in a state that didn't take advantage of the President's "if you like it you can keep it" transitional plan.

Individuals faced the same thing: most renewals in mid- to late-2014 avoid the market reforms. Most renewals in early- and mid- 2015 would be either grandfathered plans or transitional plans, in either instance not subject to the market reforms.

What about the new enrollees? Due to the way CCIIO defined things very few of them were "renewals." In effect, pretty much all ACA compliant plans were new plans for 2014 and thus can't legally be considered renewals.

It's worth mentioning too that even early renewals into non-compliant, non-grandfathered plans had ACA-related taxes built in to premiums, since the taxes had to be prorated across the entire 2014 calendar year for the purposes of NAIC statutory reporting.

So, the statement that renewals didn't cite market reforms as driving costs but medical inflation and ACA taxes is, intentionally or unintentionally, misleading since they created a sample parameter that effectively guaranteed that they wouldn't sample any rate filings with market reform costs.

 

[cabri]

What has changed, however, is that many insurance plans cover less or come with higher deductibles, which is pushing up out-of-pocket costs for many patients even as premiums stabilize.

Just like fast food.

You do not up the price; you lower the portion size

The researchers examined 113 filings regarding large premium increases and found that the rising cost of doctor visits, hospital stays, surgeries, tests, medications and other types of direct care were responsible for 84% of the premium hikes in the individual market and 78% in the small group market (which typically includes small-company plans and others with only a minor volume discount). The filings also suggest the typical patient is receiving more health care, another reason medical costs are going up.

If the premium costs go up 10%; have all the other costs risen 10%.

No - salaries are not up 10%
No - drug costs are not up 10%
No - equipment costs are not up 10%

What has happened is that if it is all being blamed on costs, then the additional is due to excessive charges due to the fact that there is additional insurance to have items spent on by both the patient and provider.

There still is no incentive to reduce medical costs; just shifting and charging more to cover the overhead of the shift.


Wait until a full year has passed where the complete brunt of costs has hit on people and employers.

The tax on medical equipment will then be passed on to the consumer as well.
The full ACA was delayed until 2016 for political purposes.

 

[highland145]

lol

 

[fskimospy]

I find these sort of discussions to sort of miss the point. What we should be focusing on is health care spending as a % of GDP. Overall we should see a bit of a rise naturally due to the fact that our population is getting older on average. Anything that deviates from this in a downward way is good news.

So far health care inflation as a % of GDP news has been fantastic since the passage of the ACA. This is something we should all be happy about.

 

[PokerGuy]

Anything that deviates from this in a downward way is good news.

So far health care inflation as a % of GDP news has been fantastic since the passage of the ACA. This is something we should all be happy about.

Not surprisingly, a completely illogical view of reality. Just because GDP rises faster than health care costs doesn't provide you with data to make any conclusions about obummercare or any other health bill for that matter.

 

[Subyman]

Says right in the article that it contributed 1/3 of the price increase, so... sounds like there is some responsibility there.

 

[shira]

Says right in the article that it contributed 1/3 of the price increase, so... sounds like there is some responsibility there.

Perhaps you missed this part of the same paragraph:

But many of those [Obamacare] fees will decline and some will phase out altogether.

 

[shira]

Oh, I forgot, we're just supposed to take a "study" by some biased group with a pre-determined conclusion as gospel.

Regardless, the study shows that medical costs are going up as they always have (ie, obummercare didn't fix anything or reduce costs -- one of it's selling points), and it shows that in addition to those costs going up, there is another layer of obummercare driven costs on top of it. So as consumers, we got the usual increases we saw in the past, plus we get a nice helping of additional costs driven by obummercare. But hey, they do mention those additional costs will decrease over time. Wonderful.

Keep in mind this is only looking at the costs as reported by some insurers, it doesn't take into account the additional costs caused by obummercare regulations that are borne by employers, and all the other ancillary problems.

So basically complete fail, as expected and as usual.

The bolded statement is totally illogical. Until you compare the rate of increase under Obamacare with both the historical rate of increase before Obamacare and the expected rate of increase without Obamacare, you have no way of knowing that the actual increases under Obamacare are smaller, greater, or the same as the pre-Obamacare system. Yet here you are claiming that the existence of an average premium increase of 3.0% means that "obummercare didn't fix anything or reduce costs." In other words, your claim is that unless Obamcare made premiums go down (not just slowed their growth), Obamacare isn't reducing health care costs. Please show us how you can possibly come to that conclusion?

 

[Jimzz]

Rates were going up before ACA (Obamacare) and now rates still go up after. How about looking to see where the money is going not trying to blame something that has little to do with it and scoring political points.

 

[Subyman]

Perhaps you missed this part of the same paragraph:

Nope, a future decrease doesn't change the fact that Obamacare contributed to premium increases. Your title is false.

 

[fskimospy]

Not surprisingly, a completely illogical view of reality. Just because GDP rises faster than health care costs doesn't provide you with data to make any conclusions about obummercare or any other health bill for that matter.

Or actually the most logical view of reality. Looking at total spending would be foolish as people with more money will spend more on health care and that's not a bad thing.

% of spending on health care relative to GDP tells us how much we spend vs. how much we can afford to spend. It is by far the most rational number to use. Use your head!

 

[thraashman]

The bolded statement is totally illogical. Until you compare the rate of increase under Obamacare with both the historical rate of increase before Obamacare and the expected rate of increase without Obamacare, you have no way of knowing that the actual increases under Obamacare are smaller, greater, or the same as the pre-Obamacare system. Yet here you are claiming that the existence of an average premium increase of 3.0% means that "obummercare didn't fix anything or reduce costs." In other words, your claim is that unless Obamcare made premiums go down (not just slowed their growth), Obamacare isn't reducing health care costs. Please show us how you can possibly come to that conclusion?

Um, he's an idiot who never met a stupid Republican ideology he didn't adore. He came to that conclusion because that's what his ideological leaders told him to believe.

 

[Subyman]

Or actually the most logical view of reality. Looking at total spending would be foolish as people with more money will spend more on health care and that's not a bad thing.

% of spending on health care relative to GDP tells us how much we spend vs. how much we can afford to spend. It is by far the most rational number to use. Use your head!

GDP is a good start, but it doesn't give you any insight into how each class is doing. It doesn't give enough of a detailed view to make conclusions based on which way that metric is going. An example would be, the % of spending/GDP is going down then it could either be either good (healthcare system is becoming more efficient) or bad (people are priced out of the healthcare system.) So conclusions should not be drawn based on only one metric.

 

[shira]

Nope, a future decrease doesn't change the fact that Obamacare contributed to premium increases. Your title is false.

Here's the actual quote from the brief on the Commonwealth Fund website:

Most insurers did not attribute any portion of these medical cost trends to factors related to the Affordable Care Act. The ACA-related factors mentioned most often were nonmedical: the new federal taxes on insurers, and the fee for the transitional reinsurance program. On average, insurers that quantified any ACA impact attributed about a third of their larger rate increases to these new ACA assessments.

YOUR statement was "Says right in the article that it contributed 1/3 of the price increase." THAT is clearly false, because even the Yahoo story (which got the 30% and 70% figures backwards) did not say what you claimed it said (what the story actually said was that 70% of insurance companies reported that 1/3 of their cost increase were due to the ACA). Even using Yahoo's erroneous statement, you get .7 X .333 = .23, or less than 1/4.

But the Yahoo story was in fact incorrect wrong when it said that the study reported that 70% of insurers attributed 1/3 of their increases to the ACA. The actual "brief" from the Commonwealth website says "most insurers" (which presumably means at least 70%) attributed no increase to ACA, and the remainder (at most 30%) attributed 1/3 of their increase to the ACA. Putting that all together, .3x.33333 = 1/9 of the 3% increase (or .333%) is attributable to the ACA

And the actual title of the brief says "Insurers attribute rising #healthinsurance rates to trends in medical costs not to the ACA." Since my thread title was "Obamacare not responsible for premium increases, study says," my title accurately reflects what the "study says."

 

[Subyman]

Oh man, I don't understand how you can be arguing this point. 1/4, 1/3, whatever. The fact is ACA has caused some rise, which is exactly opposite of what your title claims. You could say "Obamacare's effect on premium increases is not as high as previously claimed" or whatever, but it isn't zero so there is some responsibility on ACA.

There is no way you can argue against that. Impossible. Even in your follow up you say its not 1/3, but 1/4. Still a fraction of the cost. ACA has had an effect on increasing the cost of premiums, it says right in your article.

 

[shira]

Oh man, I don't understand how you can be arguing this point. 1/4, 1/3, whatever. The fact is ACA has caused some rise, which is exactly opposite of what your title claims. You could say "Obamacare's effect on premium increases is not as high as previously claimed" or whatever, but it isn't zero so there is some responsibility on ACA.

There is no way you can argue against that. Impossible. Even in your follow up you say its not 1/3, but 1/4. Still a fraction of the cost. ACA has had an effect on increasing the cost of premiums, it says right in your article.

No, my title reports what the "study said."

If I wrote, "Humans can fly, study says," and the study says "Humans can fly," then my title is true. My actual thread title is an accurate reflection of what even the study itself says, or did you miss the title of the brief?

You know as well as I do that when people complain about their "100% premium increase", and blame it on the ACA, they're not thinking that the ACA contributed a small fraction to that increase. They blame ALL of the increase on the ACA. So if I reply, "The ACA didn't cause your increase," I'm refuting they're black-and-white thinking process. Similarly, my thread title refutes the black-and-white thinking process by righties that the "ACA is to blame" for increases in premiums.

Ironically, you quibble about the "1/3 of the increases" versus "less than 1/4" of the increase, as if that doesn't make any difference. I claim that the imprecision of my thread title is LESS than the imprecision with which you summarized what the Yahoo article said. Yet you're blowing off YOUR greater falsehood. Interesting.

 

[theeedude]

Another doomsday Republican Obamacare prediction hits the fact wall.

 

[Genx87]

I think Sacktoking addressed this study pretty well.

 

[wetech]

Here's the actual quote from the brief on the Commonwealth Fund website:



YOUR statement was "Says right in the article that it contributed 1/3 of the price increase." THAT is clearly false, because even the Yahoo story (which got the 30% and 70% figures backwards) did not say what you claimed it said (what the story actually said was that 70% of insurance companies reported that 1/3 of their cost increase were due to the ACA). Even using Yahoo's erroneous statement, you get .7 X .333 = .23, or less than 1/4.

But the Yahoo story was in fact incorrect wrong when it said that the study reported that 70% of insurers attributed 1/3 of their increases to the ACA. The actual "brief" from the Commonwealth website says "most insurers" (which presumably means at least 70%) attributed no increase to ACA, and the remainder (at most 30%) attributed 1/3 of their increase to the ACA. Putting that all together, .3x.33333 = 1/9 of the 3% increase (or .333%) is attributable to the ACA

And the actual title of the brief says "Insurers attribute rising #healthinsurance rates to trends in medical costs not to the ACA." Since my thread title was "Obamacare not responsible for premium increases, study says," my title accurately reflects what the "study says."

You're misquoting the website:

Insurers attributed the great bulk of these larger rate increases to routine factors such as trends in medical costs. Most insurers did not attribute any portion of these medical cost trends to factors related to the Affordable Care Act. The ACA-related factors mentioned most often were nonmedical: the new federal taxes on insurers, and the fee for the transitional reinsurance program. On average, insurers that quantified any ACA impact attributed about a third of their larger rate increases to these new ACA assessments.

The synopsis on the site says that the bulk of increases are due to rising medical cost; and while the ACA didn't necessarily contribute to the medical cost portion of the increase, it did add non-medical costs, to the tune of 1/3 of the increase.

The brief itself says:

Of the 113 filings in the study sample, 69 percent attributed some portion of their rate increase to taxes or fees that the federal government began to assess in 2014.
...
Sixty-three insurance filings quantified the impact of these ACA taxes and fees. Of these, the average full-year rate impact was 4.5 percent—about a third of their overall rate increase on average.

 

[shira]

Another doomsday Republican Obamacare prediction hits the fact wall.

It's going to be a "train wreck," I tell ya. And not only the politicians said that. If we go back and look at what all the righties were saying two years ago on this forum, you'd read "Obamacare disaster" and "train wreck" over and over and over again.

Isn't it interesting that the same righties who continually made those wild pronouncements right here on ATPN aren't owning up to their completely inaccurate statements?