Some report sharp rise in health premiums

Some Americans are experiencing major increases in health-insurance premiums, and some are seeing their coverage dropped after the rollout of the Affordable Care Act's online health-care exchanges Oct. 1.

ACA guidelines, the rising cost of health care and the health of future-insured individuals are some of the cited causes for rising health insurance premiums.

Many employers in Southeast Missouri are struggling with the health-care law transition.

Ceramo Co. in Jackson employs about 100 people. CEO Vernon Kasten said Ceramo's previous insurance provider, Anthem Blue Cross Blue Shield, raised the company's insurance rate by about 43 percent when the plan came up for renewal. The company switched to Coventry Health Care on Sept. 1. Its insurance rate still increased by about 37 percent.

The company later received a letter explaining its coverage would be canceled at the end of the policy year in August because it does not cover certain benefits required under Obamacare, Kasten said.

People can't afford that kind of health-care coverage, he said, and it's going to have a negative effect on the nation's economy as people begin to pay more for health insurance and less on items or services to which they are accustomed.

Deb Wiethop, communications director for Anthem Blue Cross Blue Shield in Missouri, wrote in an email that higher costs are associated with expanded benefits. She said insurance companies are faced with a choice -- "either pass those costs on to their members, or figure out ways to manage those costs so that health insurance remains affordable."

"Because the new federal law guarantees coverage, limits age rating, adds essential health benefits and eliminates pre-existing conditions restrictions, some people, particularly those who have paid lower premiums in the past, may find that some costs will go up," Wiethop said. "This is an entirely new market with a vastly different pool of consumers, new products, new rating structures, new taxes and fees, and new benefits. Expanded access and new benefits come with new costs. As noted in numerous studies, ... these changes result in cost increases for some, especially for those in the individual markets."

The 10 "essential health benefits" the ACA requires must be covered are: outpatient care; emergency services; hospitalization; maternity and newborn care; mental health and substance-use disorder services, including behavioral health treatment; prescription drugs; rehabilitative services and devices; laboratory services; preventive and wellness services and chronic disease management; and pediatric services, including dental and vision care.

"It's silly" for everyone to be required to have maternity and newborn care coverage, Kasten said, considering many people are too old to have children.

Policies that were in effect when the ACA was signed into law March 23, 2010, may be considered "grandfathered" and would not have to meet the new requirements, according to America's Health Insurance Plans, a national trade association representing the health insurance industry. However, most policies in the individual market are not "grandfathered" because people chose to change their policies or buy new coverage after the law was enacted. Those plans must comply with the ACA requirements beginning Jan. 1 or when those policies renew throughout the year.

Virginia, Idaho, Kentucky, Kansas and Washington enacted laws that require insurance companies to cancel existing policies that are not ACA-compliant. With so many changes required, the states decided it would be easier to start over with new plans than try to bring existing plans into compliance, according to America's Health Insurance Plans.

Factors such as a member's plan, when they enrolled, whether the plan is grandfathered determines whether an individual's plan will be discontinued, Wiethop said.

"These plans are being discontinued -- the members are not being canceled; they have options," she said. Anthem members can open a plan with the new benefits, or choose a plan on the exchange, she said.

Aside from dropped coverage, the cost of insurance plans for many is rising more than in previous years -- and the cause is more than the rising cost of health care.

Insurance companies no longer can reject coverage to those with pre-existing conditions. Those people with chronic illnesses will enter the insurance pool, which drives up the cost of plans. The ACA's individual mandate is designed to share costs and lessen the burden on older, sicker patients. Many are concerned that if young people do choose to pay penalties over more-expensive premiums, health costs will rise accordingly.

The penalty for those who do not have health insurance for 2014 is $95 a person or 1 percent of an individual's income, whichever is higher. The penalty increases every year.

A balanced risk pool is ideal for insurance companies, Wiethop said.

" ... The more people who enroll -- no matter who they are -- the better for the success of the new health-care law, and for the industry as a whole and for us," she said.

Whether the cost of health insurance will level in the future, Wiethop said it is too soon to tell.

ashedd@semissourian.com

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