Some Nevadans May See Higher Premiums Under Obamacare

Editor’s note: This is one in an occasional series of stories on health care reform.

The Affordable Care Act may not be so affordable for some Nevadans.

The law, commonly called Obamacare, combines benefit mandates and subsidies designed to make health insurance less costly for millions of Americans who now lack coverage.

But observers ranging from state insurance officials to employee benefit consultants say some consumers could see premium increases big enough to price them out of insurance markets. If that happens, fewer people than expected could buy into the system, and that might mean the difference between Obamacare’s success or failure.

It’s not yet clear how dramatic Nevada’s premium increases might be. The state Division of Insurance has received no new product filings for the state’s public insurance exchange, Nevada Insurance Commissioner Scott Kipper said.

Kipper and other division officials declined to estimate what premiums might be, post-reform.

But they did say changes are coming, especially for consumers who buy plans on the individual market, rather than through their employers. Individual buyers make up 15.4 percent of the state’s fully insured market, excluding people who buy through self-insured businesses or government programs.

“They will see something that looks very different from what they have, and it may be priced very differently as a result,” said Glenn Shippey, an actuary in the life and health section of the Division of Insurance. “We’re not sure what that difference is going to be on an individual basis, but it’s important to understand there will be a lot of changes in existing policies.”

VANISHING INDIVIDUAL PLANS

Simply put, if you have an individual insurance plan, it will probably cease to exist. Its replacement will be a minimum benchmark — basic — plan with “essential health benefits” that all Nevada insurers must offer after January. Officials for the Division of Insurance and the Silver State Health Insurance Exchange recommended a benchmark plan similar to Health Plan of Nevada’s comprehensive yet flexible point-of-service plan, which is already the small-group market’s largest plan by enrollment.

The benchmark doesn’t mean every Nevadan must buy point-of-service coverage through Health Plan of Nevada, but it does mean every insurance carrier’s individual plan must meet those coverage levels.

So, whether they need it or not, Nevadans buying individual policies will be covered for maternity care, mental health services, infertility treatments, home health, bariatric surgery, chiropractic care and hearing aids.

Those benefits are common for comprehensive, large-group plans, but rare in individual coverage.

Obamacare also mandates that new plans pay for at least 60 percent of the cost of care they cover. Many individual policies pay just 40 percent of expenses.

The enhanced coverage could boost access to care for thousands of Nevadans, but there is a pricey flip side to those add-ons.

“There’s no way these plans can remain at the (premium) costs they were, because carriers have to provide more benefits in their plan structure,” said Todd Rich, chief deputy commissioner of the Division of Insurance. “They have to price the plans higher.”

Added Shippey: “Individuals in all states are going to see some significant increases, depending on what type of individual we’re talking about. The new laws and rules coming into effect could cause substantial premium increases for some individuals.”

But a richer benefits package isn’t the only factor set to drive up premiums.

New restrictions will limit the difference in premium costs between young, healthy people and older, sicker patients. Nevada law allows insurers to charge older, unhealthy people premiums as much as six times more than younger consumers pay. After January, that gap can only be three times more.

Also gone will be premium reductions for healthier groups. Today, insurers under­write businesses.

An athletic club staffed with healthy, young people gets a preferred rate, while a bar and grill where older employees live on fatty food gets a maximum rate, said Assurance Ltd. employee benefit consultant Frank Nolimal. He travels Southern Nevada giving businesses a presentation called, “The Good, the Bad and the Ugly of Health Care Reform and Beyond.”

Post-reform, insurers won’t be able to reward or penalize employee behavior. The community rating will be the same for all.

Those rating changes mean young, healthy people could see big increases in premium costs, while unhealthier populations could get a break.

“One side of the fence is subsidizing the other side to keep premiums level,” Nolimal said.

That could be a problem for individual buyers, because they lack tax benefits or employer assistance to pay for coverage, said Robert Zirkelbach, spokesman for the Washington-based trade group America’s Health Insurance Plans.

When someone must buy coverage on their own, they pay the full cost, and that makes them more price-sensitive, Zirkelbach said. That’s why many individuals trade comprehensive coverage for lower premiums.

LESS COVERAGE VS. LOWER PREMIUMS

Toying with that trade-off between less coverage and lower premiums could affect whether Obamacare works.

“The positive is that people are getting more benefits, and they’ll pay less out-of-pocket,” Zirkelbach said.

“But any time you add new benefits to a policy, you add to the cost of coverage. There’s a pretty broad agreement that, for these reforms to work, we need broad participation in the system, particularly among the younger and healthier, to offset the costs of those with high health-care needs. To the extent new mandates increase costs for younger people, they may price them out of the market altogether. That will drive up costs for everyone.”

Division of Insurance officials said it’s too early to tell how much premiums could change in January. And representatives of the state’s two biggest insurers, UnitedHealth Group and Anthem Blue Cross Blue Shield, either declined to comment or didn’t respond to a request for comment.

Advocacy groups and lawmakers have taken a stab at guesstimating, though. Their predictions vary wildly.

FEDERAL SUBSIDIES

As far back as 2009, Anthem officials crunched the numbers and said premiums for Nevada members with the company’s individual policies would rise 85 percent on average. For small businesses, the typical premium increases would be 70 percent.

Some groups would be hit harder than others: For a healthy, 25-year-old male, the monthly premium on an individual plan with a $2,500 deductible and comprehensive pharmaceutical coverage would jump 115 percent, from $119 to $257. A family of four in average health would pay 61 percent more, with premiums rising from $674 to $1,088.

But a 60-year-old couple in poor health would see an 11 percent decline, as monthly charges fell from $1,741 to $1,558.

In March 2012, a study prepared for the state by Massachusetts-based Gorman Actuarial found that individual-market premiums in Nevada could rise 11 percent to 30 percent on average, though federal subsidies could blunt that blow for lower-income consumers.

A January report in Contingencies, the American Academy of Actuaries’ publication, also predicted that people 21 to 29 will pay 42 percent higher premiums nationwide, while those 30 to 39 can expect to shell out 31 percent more. What’s more, adults 21 to 29 making $25,000 or more a year can expect to pay more.

An April study by consulting firm Milliman for America’s Health Insurance Plans found that a healthy 27-year-old U.S. male could see an average 149.8 percent annual premium jump, from $1,414 to $3,532.

Federal subsidies could change that calculation: A young man earning less than $25,000 or so a year would see premiums drop by 25 to 60 percent, thanks to tax breaks, while one who earns about $42,000 a year or more would see premiums spike 169 percent.

For an unhealthy, 57-year-old woman, yearly premiums could tick up 4.1 percent, from $7,892 to $8,214, though federal aid would bring down premiums 51 percent or more for women making less than roughly $42,000 a year.

‘GRUMBLINGS AND RUMORS’

Policymakers are now weighing in. U.S. Health and Human Services Secretary Kathleen Sebelius didn’t put numbers on it, but she told the Wall Street Journal in March that “there may be a higher cost associated with” moving individual buyers into a “fully insured product for the first time.”

Sebelius added that some men and younger customers could see rates rise, while women and older customers might enjoy rate drops.

Though the state Division of Insurance wouldn’t offer its own analysis, it is issuing caveats. Adam Plain, an insurance regulatory liaison with the agency, cautioned that premium studies use differing methods, and may rely on distinct regional demographic data that don’t apply in every market. Plus, assumptions used in studies may be outdated because new regulations are added daily to the books.

Employee benefits experts give mixed reviews to existing studies.

Nolimal said a 115 percent premium jump for younger, healthier consumers is “very close” to estimates he hears .

Quincy Branch, president and CEO of Branch Benefits Consultants in Las Vegas, said he hears “grumblings and rumors,” yet nothing concrete from carriers.

New premiums could become more concrete in coming weeks.

Insurers will begin filing plans with the Division of Insurance late this month and in early June. The division will make those plans available to the public shortly after they receive them, though Kipper said that won’t mean the agency has signed off on the premiums. He said the division would study rate requests to ensure they’re not excessive, inadequate or unfairly discriminatory. The approval process for each plan could take two to 10 weeks, depending on complexity. Plans would take effect Jan. 1.

Large-group markets for bigger employers will see fewer effects. Those plans typically offer the kind of comprehensive coverage just now coming to individual and small-group plans, and they’re spared community- and age-rating changes for two years, Nolimal said.

Self-insured companies, which pay health costs directly, are exempt from many mandates, though they often offer richer coverage than individual plans.

Still, Rich said the agency believes small and large groups will also feel the effects of new plan mandates, if not as much as individual buyers will.

Contact reporter Jennifer Robison at jrobison @reviewjournal.com or 702-380-4512. Follow @J_Robison1 on Twitter.

View the original article here

Higher Health Insurance Premiums: The Obamacare Debate We Didn’t Have

Whitehouse.govLet’s talk about Obamacare and rate shock—and how we talked about the law’s effect on premiums when it was first being debated.  

The health law’s supporters are now admitting that premiums will go up for some young and health individuals buying health insurance through the exchange. But they say it’s not entirely fair to make a comparison between individual plans bought on an exchange and today’s plans, because exchange plans offer a far richer set of benefits. Nor should this really come as a shock to anyone, because this is what people were told to expect.

This is a point that The Washington Post’s Ezra Klein made on MSNBC last night in a discussion of Obamacare’s effect on premiums with The Manhattan Institute’s Avik Roy. Roy noted that, when compared with today’s rates, individual market premiums bought on an exchange would be dramatically higher for many younger, healthier people—with rates doubling in some cases versus the rates he found online.

Now it’s true that those online rates are teasers that don’t apply to everyone; 26 percent of the market will either pay more or not get coverage. But that still leaves roughly three quarters of the market who will see far higher rates. Maybe, Roy said last night, that’s just fine, because we believe that it’s “a good thing for people to pay double for their health insurance because we’re now protecting the sick. But that’s a debate we didn’t have really in 2009.” 

Except that according to Klein, it is a debate we had: “This is a debate we had,” he said. “This is what frustrates me here. I remember doing this debate over and over and over again. So Evan Bayh wrote the Congressional Budget Office—[Bayh] was a senator back then—he said: ‘What’s going to happen to average premiums?’ The CBO came back and said, ‘Well, average premiums are going to go up a bunch. And then people like me went in and looked at what they [the CBO] said, and they said, ‘Average premiums are going to go up but that’s because people are going to have to start buying better health care because they’re going to get subsidies, because we’re going to make them pay for better health care because now they can afford it.’”

Far higher rates for younger, healthier individuals were to be expected. “This was out there,” Klein finished. “And we talked about it a lot.”

I'm not so sure. Liberal wonks like Klein may have talked about it—we’ll get to that a little later. But the president and his administration did not talk about it much at all. Rather, the overarching message from the White House, and from the law’s supporters generally, was that Obamacare would cause health insurance premiums to drop. 

Let’s go back in time to when President Obama first began to make the case for his health care overhaul. Here’s how he touted his health plan in May 2007, early in his run for office. “If you already have health insurance, the only thing that will change for you under this plan is the amount of money you will spend on premiums. That will be less.” On the campaign trail in 2008, Obama continued to sell the law as a way to lower health premiums, promising at least 15 times to reduce health premiums for families by $2500 on average. And as Buzzfeed notes, Obama didn’t stop pointing to lower premiums when he made it into the White House in 2009. In May of that year, he told C-SPAN that if health industry groups commit to savings—“we end up saving $2 trillion…a lot of those savings can go back into the pockets of American consumers in the form of lower premiums. That’s what we are driving for.”

From the very beginning, in other words, Obama’s message was not that the law would result in higher premiums, but better coverage. It was that the law would lower premiums, end of story.

Now maybe you think that’s not fair. After all, these statements were made before the specifics of the law had been drafted, and before experts at the Congressional Budget Office and elsewhere would weigh in.

So let’s flash forward a few months, to the end of 2009, in the weeks leading up to the Senate’s vote to pass the health care law. What was the White House saying then?

A headline from the White House blog on November 4, 2009 makes it clear that the essential message about premiums hadn’t changed: “Word from the White House: Objective Analysis Shows Reform will Help Small Business, Lower Premiums for American Families.” [emphasis added] The “objective analysis” in question was a report from Jonathan Gruber, a health economist at the Massachusetts Institute of Technology, and a key architect of both Obamacare and the Massachusetts health care overhaul.

The White House blog post touted Gruber’s conclusion that the health care legislation would save individuals anywhere from $500 to $3000 a year, and families even more. And those savings, the post emphasized, would “come in addition to the more generous benefits consumers would receive by purchasing insurance through the newly  created exchange”—as well as “in addition to increased protections” for individuals with preexisting conditions. Gruber even claimed that the savings would come for those who did not qualify for subsidies. Low-income individuals eligible for assistance, he said, the savings would be much larger.

This is November of 2009, long after the bulk of the legislative work has been completed. And yet the White House and a prominent Obamacare adviser were still both claiming that premiums would go down, and that benefits would go up, for individual insurance purchased through an exchange. This was the message that the administration was selling. This was the debate they were having, from the time Obama started running for office until well into the first year of his presidency.  

Of course, we still haven’t talked about the Congressional Budget Office report that Klein mentioned—the one responding to Sen. Evan Bayh’s query about how the health law would affect insurance premiums. That came out shortly after Gruber’s report. The White House wrote up that report on its official blog too. And once again, the primary message is crystal clear. The headline to that post reads: “CBO Confirms Families Will Save Money Under Health Reform.” The second paragraph says that the health law “will mean lower premiums for American families.” And the very first bullet point in the list of highlights says that “Americans buying comparable health plans to what they have today in the individual market would see premiums fall by 14 to 20 percent.”

The only hint that higher premiums might be on the horizon if the health law passes comes a little later, when the post says that “where the CBO does see premiums rising, it's not because Americans are paying more for the same coverage – it's that they’re making a choice to purchase better plans that weren't previously available to them.” And it downplays this point by suggesting that the CBO may have understated the cost-savings the law will produce.

Yet even the admission that CBO does see some premiums rising turns out to have missed the mark. Part of the reason we’re now seeing some higher premiums in the exchanges is because of the coverage requirements exchange-based plans have to meet. It’s not that individuals are making their own choices to buy more expansive and thus more expensive coverage. It’s that insurers are being told by regulators that more expansive coverage is what they must sell.

Even by the time the CBO report arrives, there’s still no mistaking the message that the Obama White House was selling to anyone who would listen: that premiums would go down, that benefits would go up, and that if premiums did happen to go up, it would only be as a result of an individual choice to buy more robust coverage.

But what about the wonks, like Klein? What kind of conversation were they having at the end of 2009? If you take Klein as representative, you find that it was somewhat more nuanced than what was coming out of the White House, and that the higher cost of individual premiums was mentioned. But the emphasis was still on lower premiums, not on the tradeoffs made to get more robust coverage.

At the beginning of November 2009, for example, Klein quoted and linked to Gruber’s paper with no commentary, under the headline “Massachusetts provides evidence that health-care reform lowers insurance premiums.”

Later that month, Klein looked at the CBO analysis requested by Bayh. In the third paragraph, he notes that in the individual market, “average premiums are expected to rise by 10 to 12 percent.” His post goes on to explain that, according to the CBO, this is because the average insurance policy purchased through the exchange will cover a much larger share of an individual’s costs and a slightly wider range of benefits. In the end, what we’re looking at, he says, is “a 10 to 12 percent increase in premiums for insurance that's about 30 percent better than what people are getting now. It's a steal.”

So this is the discussion that Klein was having: Yes, average premiums increase somewhat, but benefits increase even more. But what about others? Not Paul Krugman; one of his posts referenced the CBO’s report and conclude that “premiums would stay about the same for people with group coverage, while falling significantly for most of those in the small-group or individual markets.”

Whether Klein’s discussion of individual market premium hikes in the exchanges would have led a typical reader to expect the kind of rate increases we’re seeing in California is another question. The percentage increases he wrote up were just 10 or 12 percent, not the 100 percent hikes Avik Roy has pointed out. On the other hand, Klein was talking about averages, and the biggest hikes are concentrated amongst the young and healthy demographic. It’s not possible say with certainty what most people would have taken away from his discussion of trade-offs.

But we do have some sense of what Klein wanted people to take away. First because in Klein’s initial write up of the CBO report, he goes on to emphasize that the individual market hikes occur before the application of subsidies, which he notes will be available to about 57 percent of the market. “So in the final analysis,” he wrotes, “the effect of reform on your typical individual market purchasers is to give them insurance that's about 30 percent better but only 10 to 12 percent more expensive, and then assure them subsidies that will lower their payments by more than 50 percent.” Yes, we’re still talking about averages. But it looks fairly plain that his message is first and foremost about lower premiums, not the tradeoff of better benefits for higher premiums.

Finally, we have an idea of what Klein wanted readers to take away from his analysis of the health law’s effect on premiums, because a few days later, he followed up with another post. The concluding paragraph of that post reiterates the key points from this original. “The individual market sees costs go up, as people can purchase better insurance at a lower cost,” he wrote. “And after subsidies, most people are paying less and getting more than they would absent reform.” Indeed, “most Americans will see their premiums go down even if you account for the better insurance plans they'll be purchasing.” The headline he wrote for his post emphasizes the main point: “To repeat, the CBO found that premiums go down under health care reform.”

This is the debate that even those relatively few Americans who follow wonky policy pundits were hearing—not one that emphasized tradeoffs, but one that repeatedly emphasized that Obamacare would have mostly positive impacts on premiums, and that any negative impacts would be modest. So it’s worth asking: Was this the sort of debate that effectively prepared people for the sort of rates we’re seeing in California, and that we’re likely to see in many other states as well? Or was it, as Roy said, a debate we didn’t really have in 2009? Decide for yourself. But when you do, know when it comes to the discussion of Obamacare and premiums that people were having in 2009, this is what was out there. And this is what the law’s administration backers and other supporters talked about a lot.

View the original article here

Cramer: Already High, This Stock Trades Higher

Biogen is a leading maker of the most effective treatments for multiple sclerosis, a disease which afflicts some 350 thousand people in the United States and perhaps two million worldwide.

"Because multiple sclerosis is a chronic condition that comes and goes, the goal of every MS treatment is simply to prevent relapses, basically to keep the disease at bay," Cramer explained. "Therefore, there's a population of people who need to take these drugs for life. The total MS market should be worth nearly $18 billion by 2016."

Among Biogen's treatments is a drug called Avonex, said Cramer.

------------------------------------------------------------------
Read More from Mad Money with Jim Cramer
The Catch-22 Behind the Bull
Next Blockbuster Drug Stock?
Dell Bidding War - Cramer's Ultimate Winner
------------------------------------------------------------------

"It's a mature drug. Nonetheless, it still generated $2.9 billion in sales last year," he explained. "Biogen also makes Tysabri, viewed as having more side effects but also seen as a more effective treatment for MS. And just this week, Biogen received approval for a brand new MS drug called Tecfidera.

But Biogen is about much more than MS treatments. Cramer is also impressed with drugs Biogen has developed to treat other health issues.

"Biogen gets a piece of Rituxan," Cramer explained, "That's Roche's drug for non-hodgkins lymphoma and rheumatoid arthritis. Their cut is equal to about 20% of the drug's sales, and that came to more than a billion dollars last year."

Also the company is working on a hemophilia franchise that could ultimately be worth $3 billion in sales by the second half of the decade.

On top of that Cramer said they have promising new drugs still in earlier stages of development.

"Biogen has an antibody based therapy for MS that's in phase 2 development and they're partnered with ISIS on a spinal muscular atrophy drug that generated positive data just last week, but it's still only in phase one trials."

All told, Cramer likes what he sees.

"Given the strength of the company's MS franchise and their pipeline, I think there's still plenty of upside here. Of course, I hate to chase and the stock is at its 52-week high now, so I say you wait for a pullback and then do some buying—that is, if we get one."

View the original article here

Some Nevadans May See Higher Premiums Under Obamacare

Editor’s note: This is one in an occasional series of stories on health care reform.

The Affordable Care Act may not be so affordable for some Nevadans.

The law, commonly called Obamacare, combines benefit mandates and subsidies designed to make health insurance less costly for millions of Americans who now lack coverage.

But observers ranging from state insurance officials to employee benefit consultants say some consumers could see premium increases big enough to price them out of insurance markets. If that happens, fewer people than expected could buy into the system, and that might mean the difference between Obamacare’s success or failure.

It’s not yet clear how dramatic Nevada’s premium increases might be. The state Division of Insurance has received no new product filings for the state’s public insurance exchange, Nevada Insurance Commissioner Scott Kipper said.

Kipper and other division officials declined to estimate what premiums might be, post-reform.

But they did say changes are coming, especially for consumers who buy plans on the individual market, rather than through their employers. Individual buyers make up 15.4 percent of the state’s fully insured market, excluding people who buy through self-insured businesses or government programs.

“They will see something that looks very different from what they have, and it may be priced very differently as a result,” said Glenn Shippey, an actuary in the life and health section of the Division of Insurance. “We’re not sure what that difference is going to be on an individual basis, but it’s important to understand there will be a lot of changes in existing policies.”

VANISHING INDIVIDUAL PLANS

Simply put, if you have an individual insurance plan, it will probably cease to exist. Its replacement will be a minimum benchmark — basic — plan with “essential health benefits” that all Nevada insurers must offer after January. Officials for the Division of Insurance and the Silver State Health Insurance Exchange recommended a benchmark plan similar to Health Plan of Nevada’s comprehensive yet flexible point-of-service plan, which is already the small-group market’s largest plan by enrollment.

The benchmark doesn’t mean every Nevadan must buy point-of-service coverage through Health Plan of Nevada, but it does mean every insurance carrier’s individual plan must meet those coverage levels.

So, whether they need it or not, Nevadans buying individual policies will be covered for maternity care, mental health services, infertility treatments, home health, bariatric surgery, chiropractic care and hearing aids.

Those benefits are common for comprehensive, large-group plans, but rare in individual coverage.

Obamacare also mandates that new plans pay for at least 60 percent of the cost of care they cover. Many individual policies pay just 40 percent of expenses.

The enhanced coverage could boost access to care for thousands of Nevadans, but there is a pricey flip side to those add-ons.

“There’s no way these plans can remain at the (premium) costs they were, because carriers have to provide more benefits in their plan structure,” said Todd Rich, chief deputy commissioner of the Division of Insurance. “They have to price the plans higher.”

Added Shippey: “Individuals in all states are going to see some significant increases, depending on what type of individual we’re talking about. The new laws and rules coming into effect could cause substantial premium increases for some individuals.”

But a richer benefits package isn’t the only factor set to drive up premiums.

New restrictions will limit the difference in premium costs between young, healthy people and older, sicker patients. Nevada law allows insurers to charge older, unhealthy people premiums as much as six times more than younger consumers pay. After January, that gap can only be three times more.

Also gone will be premium reductions for healthier groups. Today, insurers under­write businesses.

An athletic club staffed with healthy, young people gets a preferred rate, while a bar and grill where older employees live on fatty food gets a maximum rate, said Assurance Ltd. employee benefit consultant Frank Nolimal. He travels Southern Nevada giving businesses a presentation called, “The Good, the Bad and the Ugly of Health Care Reform and Beyond.”

Post-reform, insurers won’t be able to reward or penalize employee behavior. The community rating will be the same for all.

Those rating changes mean young, healthy people could see big increases in premium costs, while unhealthier populations could get a break.

“One side of the fence is subsidizing the other side to keep premiums level,” Nolimal said.

That could be a problem for individual buyers, because they lack tax benefits or employer assistance to pay for coverage, said Robert Zirkelbach, spokesman for the Washington-based trade group America’s Health Insurance Plans.

When someone must buy coverage on their own, they pay the full cost, and that makes them more price-sensitive, Zirkelbach said. That’s why many individuals trade comprehensive coverage for lower premiums.

LESS COVERAGE VS. LOWER PREMIUMS

Toying with that trade-off between less coverage and lower premiums could affect whether Obamacare works.

“The positive is that people are getting more benefits, and they’ll pay less out-of-pocket,” Zirkelbach said.

“But any time you add new benefits to a policy, you add to the cost of coverage. There’s a pretty broad agreement that, for these reforms to work, we need broad participation in the system, particularly among the younger and healthier, to offset the costs of those with high health-care needs. To the extent new mandates increase costs for younger people, they may price them out of the market altogether. That will drive up costs for everyone.”

Division of Insurance officials said it’s too early to tell how much premiums could change in January. And representatives of the state’s two biggest insurers, UnitedHealth Group and Anthem Blue Cross Blue Shield, either declined to comment or didn’t respond to a request for comment.

Advocacy groups and lawmakers have taken a stab at guesstimating, though. Their predictions vary wildly.

FEDERAL SUBSIDIES

As far back as 2009, Anthem officials crunched the numbers and said premiums for Nevada members with the company’s individual policies would rise 85 percent on average. For small businesses, the typical premium increases would be 70 percent.

Some groups would be hit harder than others: For a healthy, 25-year-old male, the monthly premium on an individual plan with a $2,500 deductible and comprehensive pharmaceutical coverage would jump 115 percent, from $119 to $257. A family of four in average health would pay 61 percent more, with premiums rising from $674 to $1,088.

But a 60-year-old couple in poor health would see an 11 percent decline, as monthly charges fell from $1,741 to $1,558.

In March 2012, a study prepared for the state by Massachusetts-based Gorman Actuarial found that individual-market premiums in Nevada could rise 11 percent to 30 percent on average, though federal subsidies could blunt that blow for lower-income consumers.

A January report in Contingencies, the American Academy of Actuaries’ publication, also predicted that people 21 to 29 will pay 42 percent higher premiums nationwide, while those 30 to 39 can expect to shell out 31 percent more. What’s more, adults 21 to 29 making $25,000 or more a year can expect to pay more.

An April study by consulting firm Milliman for America’s Health Insurance Plans found that a healthy 27-year-old U.S. male could see an average 149.8 percent annual premium jump, from $1,414 to $3,532.

Federal subsidies could change that calculation: A young man earning less than $25,000 or so a year would see premiums drop by 25 to 60 percent, thanks to tax breaks, while one who earns about $42,000 a year or more would see premiums spike 169 percent.

For an unhealthy, 57-year-old woman, yearly premiums could tick up 4.1 percent, from $7,892 to $8,214, though federal aid would bring down premiums 51 percent or more for women making less than roughly $42,000 a year.

‘GRUMBLINGS AND RUMORS’

Policymakers are now weighing in. U.S. Health and Human Services Secretary Kathleen Sebelius didn’t put numbers on it, but she told the Wall Street Journal in March that “there may be a higher cost associated with” moving individual buyers into a “fully insured product for the first time.”

Sebelius added that some men and younger customers could see rates rise, while women and older customers might enjoy rate drops.

Though the state Division of Insurance wouldn’t offer its own analysis, it is issuing caveats. Adam Plain, an insurance regulatory liaison with the agency, cautioned that premium studies use differing methods, and may rely on distinct regional demographic data that don’t apply in every market. Plus, assumptions used in studies may be outdated because new regulations are added daily to the books.

Employee benefits experts give mixed reviews to existing studies.

Nolimal said a 115 percent premium jump for younger, healthier consumers is “very close” to estimates he hears .

Quincy Branch, president and CEO of Branch Benefits Consultants in Las Vegas, said he hears “grumblings and rumors,” yet nothing concrete from carriers.

New premiums could become more concrete in coming weeks.

Insurers will begin filing plans with the Division of Insurance late this month and in early June. The division will make those plans available to the public shortly after they receive them, though Kipper said that won’t mean the agency has signed off on the premiums. He said the division would study rate requests to ensure they’re not excessive, inadequate or unfairly discriminatory. The approval process for each plan could take two to 10 weeks, depending on complexity. Plans would take effect Jan. 1.

Large-group markets for bigger employers will see fewer effects. Those plans typically offer the kind of comprehensive coverage just now coming to individual and small-group plans, and they’re spared community- and age-rating changes for two years, Nolimal said.

Self-insured companies, which pay health costs directly, are exempt from many mandates, though they often offer richer coverage than individual plans.

Still, Rich said the agency believes small and large groups will also feel the effects of new plan mandates, if not as much as individual buyers will.

Contact reporter Jennifer Robison at jrobison @reviewjournal.com or 702-380-4512. Follow @J_Robison1 on Twitter.

View the original article here

Republicans: Obama wants higher taxes

With less than a week before deep spending cuts kick in, Republicans in their weekly address accused President Obama of being ready to plunge the economy into a tailspin to extract higher taxes.

“The fact is: Republicans in Congress, right now, will provide the flexibility to make the necessary spending reductions and address our deficit and debt, instead of going through the sequester. In fact, House Republicans have already passed two bills to replace the President’s sequester,” said Sen. John Hoeven (R-N.D.). “So the question is: Why won’t he work with us? And the answer, quite simply, is because he wants higher taxes.”

Obama has been traveling the country to create momentum for legislation that would replace the automatic, across-the-board cuts with a mix of tax hikes on the rich and specific cuts. He is expected to travel to Virginia next week to continue pressing his message even as Republicans have sought to pin the blame for the sequester on him.

"Hope springs eternal,” Obama said Friday. “And I will just keep on making my case, not only to Congress but more importantly the American people."

Hoeven repeated Saturday that the idea for the sequester originated in the White House, even if Republicans voted for it in the House and Senate. He said it's the president's whole approach – not just his tax policy – that's failing.

"The right way to address our deficit and debt, and get past the sequester, is not higher taxes or just better spending control,” he said. “It’s by creating jobs, growing the economy, and expanding the tax base.”

“Above all, you have to get the economy growing. That creates jobs and revenue from economic growth, not higher taxes. President Obama, however, not only wants higher taxes; he’s actually preventing economic growth and private-sector job creation. He is blocking it with more regulation, red tape, and bureaucracy.”

Hoeven, a former governor of North Dakota, went on to excoriate Obama for failing to approve the Keystone XL Pipeline that would allow Canadian crude – and oil from Hoeven's own state – to flow to refineries in the southern United States. The project, which faces stiff opposition from environmentalists, needs approval from the State Department to move forward.

“The Keystone XL project will carry 830,000 barrels of oil a day to U.S. refineries,” he said. “That includes not only oil from Alberta, Canada, but also 100,000 barrels per day of light, sweet crude from the U.S. Bakken region in Montana and my home state of North Dakota.”

He said polls show widespread public support for the project.

“Why, Mr. President, are you blocking a project that the American people support overwhelmingly? Clearly, it appears to be because of special interest groups,” he said. “It’s time to do things differently, Mr. President. It’s time to turn our country around with the right approach, and we stand ready to work with you to do it."

View Comments

View the original article here

Rep. Cantor: You Will Not See Higher Taxes

 Highlight transcript below to create clipTranscript:  Print  |  Email Go  Click text to jump within videoThu 24 Jan 13 | 04:28 PM ET Rep. Eric Cantor (R-VA) discusses the debt ceiling, tax reform and how the U.S. can balance its budget, with CNBC's Maria Bartiromo.

View the original article here

Higher Health Care Premiums Could Cause ObamaCare To Death Spiral

Doctor Using Stethoscope to Examine Toddler

This weekend, the New York Times reported on a development that’s completely unsurprising to critics of President Obama’s national health care law: “Health insurance companies across the country are seeking and winning double-digit increases in premiums for some customers, even though one of the biggest objectives of the Obama administration’s health care law was to stem the rapid rise in insurance costs for consumers.” The Times story heavily suggests that the problem is that Obamacare didn’t give federal regulators enough power to outright reject rate increases deemed too high. But Reason‘s Peter Suderman makes that case that the real culprit could be Obamacare itself — particularly its requirement that all insurance policies pay out at least 80 percent of what it collects in premiums on medical expenses. Known as the “medical loss ratio” (MLR) rule, this requirement creates an incentive for insurers to hike premiums by reducing their profit margins on any given policy.

Whatever the cause of the higher premiums, however, this trend presents a key structural challenge to Obamacare. The health care law aims to prevent insurers from discriminating against those with pre-existing conditions, to make sure that policies cover a specified package of benefits, and to limit how much extra money insurers can charge older and sicker patients. All of these provisions increase costs and decrease insurance industry profits. But through the mandate forcing individuals to purchase insurance, the law hopes to push enough younger and healthier Americans into the insurance pool to offset theses cost increases. This is where the problem with rising premiums comes in.

The Times story notes that, “Particularly vulnerable to the high rates are small businesses and people who do not have employer-provided insurance and must buy it on their own.” This is precisely the population that the federal government hopes to induce to purchase insurance through the mandate. But as the Obama administration argued before the Supreme Court, those who choose not to purchase insurance would still be in compliance with the law so long as they paid the tax penalty for not purchasing insurance. Should premiums continue to rise, more and more uninsured Americans are going to choose to pay the penalty rather than purchase expensive insurance. And those who go without insurance are more likely to be the ones who can afford to do so — young and healthy Americans with limited medical expenses. Should this occur, insurers would have to raise premiums even more to subsidize the expenses of the sicker beneficiaries they must cover under the law. This, in turn, would cause additional people to forgo insurance and pay the fine. And so on. This is known in the health care policy community as the “death spiral” and it’s one of the biggest threats to the structure of Obamacare.

With most of the major provisions of the health care law going into effect in 2014, this will be an important trend to keep an eye on.

View the original article here