By Phil Galewitz, Kaiser Health News
Vermont may not see rate shock, but its insurance market is strikingly different from that in California. (herzog/Flickr)
After years of anticipation, Vermont became the first state Monday to publish proposed 2014 individual health insurance rates under the federal health law. Despite Republican and insurers’ predictions, there was no “rate shock” in the new premiums, according to the Vermont governor’s office and insurance representatives.
That state may not be the best barometer of the impact of the heath overhaul on premiums, however, because it already prohibits insurers from using health status to determine an individual’s premiums. It is one of only seven states in the country which have so-called community rating regulations.
Unlike California, Vermont already prohibits insurers from using health status to determine an individual’s premiums.
California does not currently have community rating regulations. A major study last week
concluded that individual premiums will likely go down substantially for many Californians and up for others on the individual market, once the new online marketplace for health insurance opens later this year. Premiums are expected to be announced for California in several weeks.
Vermont also requires prices to be the same regardless of person’s age. Two of the health law’s biggest changes include prohibiting insurers from using health status to determine premiums and prohibiting insurers from charging older people more than three times the rates of younger people.
A major new analysis shows that hundreds of thousands of Californians will see their monthly insurance premiums fall an average 47 percent under President Obama’s health care overhaul, in large part due to tax credits and subsidies. It is the first detailed look at how health insurance premiums could change under President Obama’s Affordable Care Act, which goes into effect on Jan. 1, 2014.
Covered California, the agency charged with creating the state’s new health insurance marketplace, commissioned the analysis. The report looked at the individual market only and did not examine the small or large group market.
Under the ACA people with incomes up to four times the federal poverty level (about $94,000 for a family of four; $46,000 for an individual) will be eligible for subsidies from the federal government. That’s about 570,000 people, Covered California said.
Major findings from the study include:
- Individuals with incomes less than four times the poverty level are “likely to pay” 47 to 84 percent less for their monthly premium compared to this year
- Premiums would have increased 9 percent in 2014 because of health care inflation, even without the ACA Continue reading
By Julie Appleby, Kaiser Health News
(Image: Kaiser Health News)
Health insurance premiums rose 4 percent for family coverage this year, well below last year’s increase and half the 8 percent average of the previous decade -– largely because people used less health care in an uncertain economy.
Family plan premiums hit $15,745 on average, while premiums for single employees rose to $5,615, according to a survey of employers released Tuesday by the Kaiser Family Foundation and the Health Research & Educational Trust. (KHN is an editorially independent program of the foundation.)
“We’re seeing people make more consumer-oriented decisions, going for less expensive treatments or deferring surgery,” said Julie Stone, senior consultant at Towers Watson, an employer benefit consulting firm that does its own survey. Still, hospitals and other medical providers “are not agreeing” to lower their prices, she said. Continue reading
The federal health law aims to tackle the problem of high health care costs by providing financial rewards to providers who do a better job coordinating patient care. But one shining example of that future has been here in California for decades. It’s Kaiser Permanente which is often touted as the nation’s best hope for bringing health care costs more in line with other developed nations.
Kaiser rose out of a utopian, industrialist dream. During the 1930s and 40s, Henry J. Kaiser wanted to make sure the workers at his Richmond shipyard were steady and strong.
George Halvorson, Kaiser’s CEO, draws a direct link between Henry Kaiser’s approach to building ships and his approach to designing a health system. “When Henry built things he tended to assemble an entire team to build all the parts,” he says. ”So when he started providing health care to his workers, he used that model which was to have a Kaiser hospital, Kaiser clinics.”
“They got to where they are, in part, by being the cost leader in the market. And they no longer are.”
Kaiser Permanente opened its doors to the public in 1945 — and offered health coverage that was considerably less expensive than conventional insurers like Blue Cross.
The strategy worked because it owned and operated its own hospitals and clinics and directly employed physicians. Continue reading