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Sally Pipes Tries to Strike Again

October 11, 2011

This is a copy of a response I posted at Forbes on Ms. Pipes latest work of semi fiction on ACA – “Higher Health Insurance Premiums This Year? Blame Obamacare” :

Ms. Pipes, It is amazing to me that you do not get tired of misrepresenting the truth about the ACA.

For a law that doesn’t go into full effect until 2014 your article title states that “Obamacare” is to blame for this year’s healthcare increases which is utter nonsense.

In fact you make it sound like the last 10 years increase somehow are the laws fault as well as well as the past projections predating the law that are major reasons health reform is needed.

As far as this year’s increases using the Kaiser study as one data point is fine but in their own notes they state that this years data set is different than last years and no one in America saw 3% increases last year.

If you look at data from industry leading benefits consultants Aon, Mercer or Segal or the mid market study from United Benefits Advisors, all of these sources reflect increases BEFORE benefits changes of 7-10% this year and in the past several years as well. Same with PWC and Towers Watson studies.

Most see this years increase as LESS than they had expected, sad but true at these levels.

You state that ACA is “piling mandates and required coverage benefits onto every single policy”:

In 2011 three minor changes went into effect were minimal in cost impact :

– Age 26 – Your so called “slacker mandate” comments are down right silly. “That cost impact is even more significant because most of those who seek coverage through their parents know that they’ll need care.

According to Kaiser 2.3 million young adults are covered thus far (not 1M).

“Even the feds admit that the mandate means that families will pay more. According to HHS, each new dependent will tack on an additional $3,380 to their parents’ insurance costs this year.”

FYI all the studies reflect a cost increase o .8-1% or <$150/year to add a young adult to a family coverage.

That whopping 1% to cover 2.3M new lives sure seems to contradict your assertion that This “adverse selection” issue results in a sicker — and thus costlier — overall insurance pool.”

– Ending Annual and lifetime maximums – (.4%) for improving coverage for all insureds and making sure no one will ever go bankrupt from poor coverage

– Preventive Care – (.5%) co pay free preventive care will help catch issues before they get serious and focus on wellness which many employers and plans already were. For most people these costs were out of pocket before and now can be paid pre tax via this slight increase so this may be a net decrease in total costs for alot of insured and their families

Your comment “Slathering federal mandates on top of existing state mandates will drive costs even higher — and thereby make coverage unaffordable for more people.” might be true if the “essential benefits program” that HHS is considering goes hog wild.

This week the recommendation for it from IOM was a plan like that of a typical small employer which is not laden in extra benefits and will be focused on affordability.

I trust you realize that the state exchange plans will NOT have to include the onerous state mandates you refer to and employers in the exchange in some states may actually save money. Self insured employers and those that are grandfathered will avoid any changes as well.

The real whopper of this post is: “CMS estimates the growth in health insurance costs will increase 10 extra percentage points in 2014 because of ObamaCare — a 14% increase, versus 3.5% without the law.”

Total expenditures are going up because more people will be insured this first year of the law but you make it sound like plans will cost 14% more which is factually wrong

What you intentionally leave out is what ACA accomplished this year for seniors:

– 20.2 million seniors have gotten free preventive care worth over $2B
– 1.2 million seniors have saved over $1B from the “donut hole” closing
– Per CMS Medicare inflation is the lowest ever at 3.2%, partly due to the above and more seniors being on an staying on their meds.
– Medicare Advantage premiums for 2012 are GOING DOWN 4%, even with the $500B subsidies being removed by ACA for the private insurers that were misrepresented repeatedly by you and others.

It is really a shame that a quality publication doesn’t fact check its guest columnists or offer a more balanced view of healthcare reform or at least one that uses facts to make its arguments.

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