Wellpoint (WLP): Health reform will hike costs for Colorado’s young, lower costs for high risks

Wellpoint (WLP), which operates Blue Cross and Blue Shield plans in Colorado, Missouri, California and other states, is circulating reports on the impact of the two Senate and the three House health insurance and spending bills (most importantly, S 1796 and HR 3200). In a 17-page (single spaced) report on Colorado, Wellpoint concludes that without high enough penalties and fees for those who don’t buy health insurance while insurers are required to sell to all applicants (guaranteed issue), premiums would jump 20% to 80% for some customers.
Read more.

And under the subsidies offered in the bills, some low income enrollees would see their premiums cut as much as 90%.

The purpose of the reports is to get Congress to impose stiffer penalties on people who don’t obey mandates to buy health insurance and wait until they need expensive medical care before they buy insurance, which insurers would be required to sell to them under the guaranteed issues provisions of the health insurance bills before Congress.

Under the House bill, the penalties for not buying mandated health insurance plans would be fairly stiff, as written by health insurers’ lobbyists. But that bill also called for prison sentences for certain violators. After critics raised a ruckus over the penalties, they were lowered in the Senate Finance Committee’s bill (S 1796)  to levels that make them virtually ineffective, according to insurers.

What the Wellpoint report seems to be saying is that it could live with the low penalties on the free riders, but everyone else would pay much higher premiums to cover the costs of the claims submitted by the free riders who game the system. Of course,  the privately insured already pay much higher premiums to cover the costs of some 35 million to 40 million uninsured free riders and illegal immigrants, but under the bills before Congress, these penalties on people who buy private insurance would soar even higher, regardless of whether there was a government-run public option HMO or not.

In short, based on Wellpoint’s experience in states that require guaranteed issue but don’t have effective mandates that require everyone to buy health insurance, the insurer estimates that:

certain proposed reforms will result in lower-risk individuals and groups facing increased premium costs post-reform and higher-risk individuals and groups facing decreased premium costs post-reform. Additionally, other market reforms will generally increase premiums for everyone regardless of risk.

The report looks at how several Denver enrollees’ and small businesses’ premiums would change assuming no changes in medical costs.

Most important, read the the study and the caveats. Several scenarios are presented, which means that while there is a headline and lead for this story, you can’t summarize this report in 10 to 40 words.

Links

Health Care Reform Premium Impact in Colorado

Health Care Reform Premium Impact in New York

Health Care Reform Premium Impact in Missouri

WellPoint Says Reform Will Cost Customers

WellPoint Attacks Health Legislation

Another Industry Report Says Premiums Will Go Up

Commenting is not available in this weblog entry.

<< Back to main