Washington D.C. — Donna Novak just returned from Washington D.C., where she was invited to lead a discussion of the Health Care Financing Organization, a program sponsored by the Robert Wood Johnson Foundation. The event was titled Pricing Insurance in the Current Health Care Environment.
The goal of the day-long discussion was to gather many viewpoints to help policymakers set up regulations for insurance plans within the framework of the Patient Protection and Affordable Care Act. Government officials, actuaries, regulators, researchers, educators and analysts gathered to discuss how the ACA will impact insurance costs. “The new federal health care reform requires a long list of changes in the marketplace,” said Novak. “There will be less variation in premium rates due to age, no variation in rates due to health, transfers in revenues between insurers based on the health of their members.” Novak says these factors, plus subsidies for low income consumers will all affect insurance premiums come 2014.
Further complicating insurer pricing decisions are the millions of uninsured becoming insured under the ACA. These are consumers who previously had no insurance by choice, uninsurability or unaffordability. “Health care providers will be in short supply and less likely to reduce their fees or negotiate with insurers,” said Novak.
Novak says the biggest concern is that younger individuals and employers with a young workforce could see extremely high premium increases over what they are currently paying and may drop their insurance as a result. “This will result in increases in the average premium rates as the average age in the markeplace rises,” she said.
Novak says two strong messages came from the meeting. First, actuaries will have the daunting task of predicting the impact the ACA will have on the cost of health care claims. Second, insurers need the Department of Health and Human Services to publish the regulations impacting insurers immediately.
The Health Care Financing Organization plans to have follow-up discussions as regulations are published and implementation dates near.