Wellpoint, Premium Increases, and the Public Option - DailyKos

[WillyT]

Wellpoint, Premium Increases, and the Public Option
by mcjoan - DailyKos
Thu Mar 04, 2010 at 03:16:04 PM PST

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Ezra reports on a consulting firm's assessment of how Wellpoint will fare under reform, concluding that "should reform fail, Wellpoint would be a primary beneficiary."

The argument is simple: Wellpoint's business model is uncommonly concentrated in the individual and small-group markets. Those are the exact markets that health-care reform will drastically change. Those are the markets where people get rejected for preexisting conditions, where insurers spend 30 cents of every premium dollar on administration and where rate hikes are volatile and constant. Health-care reform wants to change all of that, and if it does, Wellpoint's business model will be changed, too.

Wellpoint's "2.2 million individual members do leave it somewhat exposed to the 80% individual floor contemplated in the Senate bill and Federal oversight of rating action proposed by the President," continues the analysis. In English, that means the bill will force Wellpoint to spend at least 80 cents of every premium dollar on medical care for its customers, and it means that regulators aren't likely to let Wellpoint jack prices up by 25 percent with no warning or reason. It also means that Wellpoint is not spending that much of premiums on medical care and is not keeping its rates under control now. (It's possible that "rating" is referring to regulations on things like age discrimination and preexisting conditions in this context. It's not clear from the writing, but it doesn't change the point: The bill regulates those practices, too.)

This report comes out on the same day that The Chicago Tribune reports that Illinois consumers with these same individual health plans are going to pay up to 60 percent premium increases.

It all depends, of course, on whether this bill actually manages to achieve regulation. And if it's the state-based exchanges that are included in the Senate bill that are passed, that's not very likely, as the same state insurance commissioners who have been unable to enforce existing regulations would be enforcing these as well. The national exchange, at a minimum, would give the regulations a better shot at actually being enforced. The House is right for having insisted on it in their negotiations with the Senate.

But in addition to a national exchange, there still needs to be real competition for the insurance companies in the form of a choice for consumers--the public option. It's testament not just to its political popularity, but also to the fact that it's just smart policy that the public option still lives. In fact, with Maria Cantwell's signature, there are now 35 signers to the Bennet letter.

If it's not included in the reconciliation package, there's now ample support in both chambers of Congress to give it an up or down vote as an amendment to that package.

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Link: http://www.dailykos.com/storyonly/2010/3/4/843009/-Wellpoint,-Premium-Increases,-and-the-Public-Option

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[WillyT]

1. Kick !!!

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