Health insurers foresee rising premiums if court nixes 'individual mandate'

When President Obama pushed for a sweeping overhaul of America's health insurance system in 2010, the health insurance industry went along with a central premise of the law: that it would agree to insure "all comers," regardless of their state of health, if a new mandate also coaxed younger and healthier Americans to buy insurance.

In principle, millions of Americans who could not otherwise afford insurance would be covered, while the influx of healthy purchasers of insurance would help pay the costs. Any day now, in a ruling by the US Supreme Court, this central bargain in Mr. Obama's Affordable Care Act could unravel.

It's not hard to see why the health insurance industry doesn't like that idea. The Supreme Court could rule that the "individual mandate" in the law is unconstitutional, thus removing a big expected stream of revenue, while leaving in place the law's guaranteed-access provisions, which impose big costs on insurers.

RECOMMENDED: How much do you know about health-care reform? Take our quiz!

But outside experts say the negative consequences also would ripple beyond the insurance business to affect the pocketbooks of millions of Americans, who would face a rising price for their health insurance.

"We have the worst possible outcome" in this scenario, says J.D. Kleinke, a health-policy expert at the conservative American Enterprise Institute. Yet this outcome appears quite probable, he says, because the Supreme Court is tasked with considering questions of law and the Constitution, not what would be optimal for America's health-care system.

"They're thinking about it legally.... They've got pressure not to be activist," says Mr. Kleinke. He predicts that "their tendency is going to be to do as little as possible but still do what they believe is legally correct. You do the math on that, you end up with: They take away the mandate, they leave the rest."

The court case could bring new and sharper definition to the clause of the Constitution that allows Congress to regulate interstate commerce. The central question is: Does a mandate on individuals to carry insurance (or pay a fine) represent a lawful regulation of commerce or an unconstitutional intrusion of the federal government on the affairs of individuals and state governments?

It's possible that the high court will opt for a ruling that doesn't center solely on the individual mandate. The justices could vote to uphold the entire Affordable Care Act (ACA), or they could strike it down entirely. Or they might sweep away both the individual mandate and the law's central marketplace reforms (guaranteed access to insurance) together, following the reasoning of the industry and the Obama administration that those provisions have an inherent linkage.

If the court strikes down the individual mandate without doing anything else, many Americans would still be glad to have the ACA's provision of access to insurance, without regard to preexisting health conditions.

And it's not clear how much insurance costs would rise. Some studies by health-care experts suggest the price jump could end up being smaller than the dire rhetoric from the industry implies – especially after factoring in the law's tax credits that defray the cost of buying insurance.

Other studies conclude that the rise would be substantial for families who don't have coverage through employer-sponsored plans. One midrange estimate of the impact, from the Congressional Budget Office, is that insurance premiums could go up by about 15 percent.

RECOMMENDED: How much do you know about health-care reform? Take our quiz!

Related stories

Read this story at csmonitor.com

Become a part of the Monitor community

View the original article here

Health insurers foresee rising premiums if court nixes 'individual mandate'

When President Obama pushed for a sweeping overhaul of America's health insurance system in 2010, the health insurance industry went along with a central premise of the law: that it would agree to insure "all comers," regardless of their state of health, if a new mandate also coaxed younger and healthier Americans to buy insurance.

Skip to next paragraph

In principle, millions of Americans who could not otherwise afford insurance would be covered, while the influx of healthy purchasers of insurance would help pay the costs. Any day now, in a ruling by the US Supreme Court, this central bargain in Mr. Obama's Affordable Care Act could unravel.

It's not hard to see why the health insurance industry doesn't like that idea. The Supreme Court could rule that the "individual mandate" in the law is unconstitutional, thus removing a big expected stream of revenue, while leaving in place the law's guaranteed-access provisions, which impose big costs on insurers.

But outside experts say the negative consequences also would ripple beyond the insurance business to affect the pocketbooks of millions of Americans, who would face a rising price for their health insurance.

"We have the worst possible outcome" in this scenario, says J.D. Kleinke, a health-policy expert at the conservative American Enterprise Institute. Yet this outcome appears quite probable, he says, because the Supreme Court is tasked with considering questions of law and the Constitution, not what would be optimal for America's health-care system.

"They're thinking about it legally.... They've got pressure not to be activist," says Mr. Kleinke. He predicts that "their tendency is going to be to do as little as possible but still do what they believe is legally correct. You do the math on that, you end up with: They take away the mandate, they leave the rest."

The court case could bring new and sharper definition to the clause of the Constitution that allows Congress to regulate interstate commerce. The central question is: Does a mandate on individuals to carry insurance (or pay a fine) represent a lawful regulation of commerce or an unconstitutional intrusion of the federal government on the affairs of individuals and state governments?

It's possible that the high court will opt for a ruling that doesn't center solely on the individual mandate. The justices could vote to uphold the entire Affordable Care Act (ACA), or they could strike it down entirely. Or they might sweep away both the individual mandate and the law's central marketplace reforms (guaranteed access to insurance) together, following the reasoning of the industry and the Obama administration that those provisions have an inherent linkage.

If the court strikes down the individual mandate without doing anything else, many Americans would still be glad to have the ACA's provision of access to insurance, without regard to preexisting health conditions.

And it's not clear how much insurance costs would rise. Some studies by health-care experts suggest the price jump could end up being smaller than the dire rhetoric from the industry implies – especially after factoring in the law's tax credits that defray the cost of buying insurance.

Other studies conclude that the rise would be substantial for families who don't have coverage through employer-sponsored plans. One midrange estimate of the impact, from the Congressional Budget Office, is that insurance premiums could go up by about 15 percent.

View the original article here

Can the health care reform law survive without the individual mandate?

Two health care reform protesters on the first day of oral arguments. (Charles Dharapak/AP)

Could President Obama's sweeping health care reform law survive if the court strikes down the requirement that all Americans buy insurance?

The short answer is yes -- but insurance companies certainly won't be happy about it.

Both Justice Department lawyers and their challengers agree that the individual mandate is not "separable" from the rest of the law, which means the rest of the law can't survive if the individual mandate is surgically removed by the court.

[Complete coverage of the Supreme Court health care case]

The lower courts have been split on the question, but one of them, the 11th Circuit Court of Appeals, ruled in August that only the mandate should be struck down, leaving the rest of the law's provisions -- including an expansion of Medicaid to cover all low-income people and federal subsidies for lower-income and middle-class people to buy insurance -- in place.

That decision no doubt sent shivers down the spines of some insurance executives. Striking down the mandate could be a nightmare scenario for the health insurance industry, since the rest of the law compels them to accept sick customers and to not charge higher premiums based on a customer's health, age or gender. Sick customers would flood the insurance market and drive up costs, while young, healthy uninsured people would take their chances and not buy coverage, in what insurers worry would be a "death spiral" of rising costs.

[Related: Monday's audio of the Supreme Court health care law oral arguments]

The Congressional Budget Office estimated that premiums in the individual market would increase 15 to 20 percent if just the mandate is struck down, since millions of healthier Americans would could forgo buying insurance and thus not offset the costs of new sick customers. But a study by the Rand Corporation estimated a more modest premium increase of less than 3 percent. MIT Professor Jonathan Gruber wrote in an analysis for The Center for American Progress that 50 to 75 percent fewer uninsured people would be covered by 2019 under the law if there was no mandate, but that the government would only save 25 to 30 percent on the lower numbers.

Starting in 2014, the mandate will levy a penalty of 1 percent of a person's income on those who don't buy health insurance, with exceptions for religious objections and financial hardship. The fee would eventually increase to 2.5 percent of annual income or $695, whichever is higher.

Maura Carley, president of the patient advocacy firm Healthcare Navigation, tells Yahoo News that New York state provides a case study for what could happen if the mandate is struck down, but insurers are still required to take every patient and charge them equally.

"We go back to 1993," she said, referring to when the state passed a law requiring insurance companies to cover everyone. "Every New Yorker can get individual coverage, they just can't afford it." (Unlike in New York, the health care law will offer subsidies to people to purchase health insurance.)

To avoid this outcome, Justice Department attorneys are asking the court to strike down the regulation requiring insurers to take all customers if they decide to kill the individual mandate. In this, they partially agree with the 26 states that are suing the government over the law. The states' attorney, Paul Clement, will argue that the entire law needs to be struck down, echoing Florida-based Federal Judge Roger Vinson's ruling that Congress would not have passed the law without the individual mandate, and thus the entire thing should fall.

[Related: Santorum uses Supreme Court health care hearing to knock Romney]

If the Court does only strike down the mandate, the death spiral could be averted, argues Aaron E. Carroll, an associate professor at the Indiana University School of Medicine. He writes that the government could give big tax breaks to people who buy insurance as one way to prevent "adverse selection." Princeton sociologist Paul Starr writes that Congress could replace the mandate's monetary penalty with an opt-out system, where people who choose not to purchase insurance must sign a form saying they won't buy insurance for a period of five years. This would prevent some people from waiting until they get sick to buy insurance, which drives up costs.

But any of those changes would actually require Congress to pass new laws, which seems highly unlikely given that Republicans control the House and are pushing for a full repeal of the law. Individual states could take up the cause, by passing their own mandates or other measures to encourage people to buy insurance.

Other popular Yahoo News stories:

• The Supreme Court's health care reform case: What to expect

• Poll shows steep drop in support for war in Afghanistan

• New Orleans police officer suspended over Trayvon Martin comments

View the original article here

Affordable individual health insurance

The days when you could count on having health coverage through a job are long gone.

Recently 40% of the workforce was made up of nonstandard workers, including temporary, contract, or part-time workers who often have no benefits, up from 27% in 2005, according to a study funded by the Department of Labor. Moreover, many firms that offer benefits have cut their contributions toward workers' spouses and children, according to HR consultancy Towers Watson.

The 2010 health reform act aims to increase the options for individual coverage, but most of the changes don't kick in until 2014. For now, solo insurance is still expensive, can be difficult to get, and may have coverage gaps. These steps will help you get the best deal.

Step 1. See if another form of group coverage is cheaper

Search for an industry professional group that gives members access to a group policy. Just vet these plans carefully; those marketed through trade groups may have very limited benefits, such as a cap on hospital stays, says Cheryl Fish-Parcham of advocacy group Families USA.

If you're a one-man shop, ask an agent (find a list at nahu.org and get references) about a sole proprietor plan. Fifteen states allow self-employed people to buy this kind of plan, which allows everyone to get coverage regardless of health -- and may be cheaper than an individual plan.

Step 2. Healthy? Go online

Most individual policies are purchased directly from a private insurer, through a website or via an agent.

In stellar health? Plug your info into an online comparison site such as ehealthinsurance.com. All plans will have a varying menu of premiums, benefits, deductibles, and other costs, so you need to weigh the tradeoffs.

To save on premiums, increase your deductible: A healthy family of four, for example, could save $3,000 a year in premiums with an annual deductible of $5,000 vs. $1,800.

Don't go so high, though, that the maximum-out-of-pocket would break you. "That's the number you'll hit if something serious happens," says Bruce Benton, a health insurance agent in Sherman Oaks, Calif.

Also note whether there's an additional deductible for brand-name drugs or hospital visits and whether the deductible is per person or per family.

Help for the uninsured: Doctors accept local currencies

You may see advertisements for short-term or temporary plans that last from one month up to a year, and that cost as little as $40 a month. Careful -- should your health deteriorate, you're likely to pay more for a regular policy once the short-lived plan expires, says Dallas insurance agent Carolyn Goodwin, or not qualify for one at all. (It's okay to get a short-term policy when you have new group coverage lined up for a set date.)

Step 3. If you have a chronic condition, use an agent

More than a third of insurance shoppers are denied coverage or charged more because of a health issue, according to the nonprofit Commonwealth Fund. So anyone with even a minor health issue (such as asthma or high blood pressure), should shop through an agent.

The agent should know which insurers are your best bet. You may want to split family members among several policies.

Step 4. Look at government programs

If private insurance is a no-go, you have two government-based options. Anyone can get coverage via his state's high-risk insurance pool -- you'll pay about 150% of the cost of an individual policy (see healthcare.gov) -- or a similar backstop.

Thanks to health reform, those who have been uninsured for the prior six months will qualify for their state's Pre-Existing Condition Insurance Plan (pcip.gov). The program, intended to bridge the gap until new options are introduced in 2014, will cover you for rates similar to those that healthy people pay in your state (a 50-year-old in Minnesota, for example, would pay $220 a month).

Your kids may also be able to get insurance from your state's Children's Health Insurance Program (CHIP); the income cap for a family of four in some states is as high as $69,000 a year.

Why it's tough to go alone

The coverage on an individual health policy usually isn't as good as a group plan, and it's often a budget buster.

Average premium

Individual non-group plan: $3,606

Individual group plan: $1,002

Family non-group plan: $7,102

Family group plan: $4,072

Average deductible

Individual non-group plan: $2,498

Individual group plan: $675

Family non-group plan: $5,149

Family group plan: $1,521

Note: Group plan numbers are for a PPO plan.

Source: Kaiser Family Foundation

Do you know a Money Hero? MONEY magazine is celebrating people, both famous and unsung, who have done extraordinary work to improve others' financial well-being. Nominate your Money Hero.

View this article on Money

More From Money

View the original article here

Affordable individual health insurance

The days when you could count on having health coverage through a job are long gone.

Recently 40% of the workforce was made up of nonstandard workers, including temporary, contract, or part-time workers who often have no benefits, up from 27% in 2005, according to a study funded by the Department of Labor. Moreover, many firms that offer benefits have cut their contributions toward workers' spouses and children, according to HR consultancy Towers Watson.

The 2010 health reform act aims to increase the options for individual coverage, but most of the changes don't kick in until 2014. For now, solo insurance is still expensive, can be difficult to get, and may have coverage gaps. These steps will help you get the best deal.

Step 1. See if another form of group coverage is cheaper

Search for an industry professional group that gives members access to a group policy. Just vet these plans carefully; those marketed through trade groups may have very limited benefits, such as a cap on hospital stays, says Cheryl Fish-Parcham of advocacy group Families USA.

If you're a one-man shop, ask an agent (find a list at nahu.org and get references) about a sole proprietor plan. Fifteen states allow self-employed people to buy this kind of plan, which allows everyone to get coverage regardless of health -- and may be cheaper than an individual plan.

Step 2. Healthy? Go online

Most individual policies are purchased directly from a private insurer, through a website or via an agent.

In stellar health? Plug your info into an online comparison site such as ehealthinsurance.com. All plans will have a varying menu of premiums, benefits, deductibles, and other costs, so you need to weigh the tradeoffs.

To save on premiums, increase your deductible: A healthy family of four, for example, could save $3,000 a year in premiums with an annual deductible of $5,000 vs. $1,800.

Don't go so high, though, that the maximum-out-of-pocket would break you. "That's the number you'll hit if something serious happens," says Bruce Benton, a health insurance agent in Sherman Oaks, Calif.

Also note whether there's an additional deductible for brand-name drugs or hospital visits and whether the deductible is per person or per family.

Help for the uninsured: Doctors accept local currencies

You may see advertisements for short-term or temporary plans that last from one month up to a year, and that cost as little as $40 a month. Careful -- should your health deteriorate, you're likely to pay more for a regular policy once the short-lived plan expires, says Dallas insurance agent Carolyn Goodwin, or not qualify for one at all. (It's okay to get a short-term policy when you have new group coverage lined up for a set date.)

Step 3. If you have a chronic condition, use an agent

More than a third of insurance shoppers are denied coverage or charged more because of a health issue, according to the nonprofit Commonwealth Fund. So anyone with even a minor health issue (such as asthma or high blood pressure), should shop through an agent.

The agent should know which insurers are your best bet. You may want to split family members among several policies.

Step 4. Look at government programs

If private insurance is a no-go, you have two government-based options. Anyone can get coverage via his state's high-risk insurance pool -- you'll pay about 150% of the cost of an individual policy (see healthcare.gov) -- or a similar backstop.

Thanks to health reform, those who have been uninsured for the prior six months will qualify for their state's Pre-Existing Condition Insurance Plan (pcip.gov). The program, intended to bridge the gap until new options are introduced in 2014, will cover you for rates similar to those that healthy people pay in your state (a 50-year-old in Minnesota, for example, would pay $220 a month).

Your kids may also be able to get insurance from your state's Children's Health Insurance Program (CHIP); the income cap for a family of four in some states is as high as $69,000 a year.

Why it's tough to go alone

The coverage on an individual health policy usually isn't as good as a group plan, and it's often a budget buster.

Average premium

Individual non-group plan: $3,606

Individual group plan: $1,002

Family non-group plan: $7,102

Family group plan: $4,072

Average deductible

Individual non-group plan: $2,498

Individual group plan: $675

Family non-group plan: $5,149

Family group plan: $1,521

Note: Group plan numbers are for a PPO plan.

Source: Kaiser Family Foundation

Do you know a Money Hero? MONEY magazine is celebrating people, both famous and unsung, who have done extraordinary work to improve others' financial well-being. Nominate your Money Hero.

View this article on Money

More From Money

View the original article here

Health Plan Introduces New Individual Products

PITTSBURGH, Feb. 2, 2012 /PRNewswire/ -- UPMC Health Plan is introducing eight new affordable health care coverage plans for individuals that provide 100 percent coverage on preventive care, health savings account options, and more. Pricing for this comprehensive coverage is as low as $2.46 a day.

The eight new plans – known collectively as UPMC Individual Advantage – can be purchased directly and provide varying levels of deductibles, cost and coverage, and enable persons to choose the option that best meets their own and their families' health care needs.

Anyone can simply visit the website to review options using an easy plan selector tool and then receive a free, no obligation quote in minutes. Information and personalized service is also available by phone.

All Individual Advantage members will have pharmacy coverage. On the Health Savings Account (HSA) option, preventive medications are not subject to the deductible. In addition, the plan provides unique behavioral health and maternity coverage not often available by most other companies. Each plan design has unique benefits, and copayment levels vary with plan design. Options include a $0 deductible plan, and there are tax advantages for members who choose a plan that can be paired with an HSA.

Members will have access to over 90 hospitals and facilities and more than 9,800 physicians in the UPMC Health Plan Exclusive Provider Organization (EPO) network.

Individual Advantage also includes LifeSolutions, a work, life and wellness program that provides online access to tools and information relating to child and elder-care needs, family advice, and other day-to-day needs.

"UPMC Individual Advantage is a total health product and a new way for UPMC Health Plan to deliver innovative and affordable health plans designed to meet our members' physical and behavioral health needs," said Diane P. Holder, President and CEO of UPMC Health Plan and President of the UPMC Insurance Services Division. "With this product, which is a response to consumer requests and market demand, we will continue to provide the highest quality and value to our members and our community."    

Persons interested in UPMC Individual Advantage can log on to www.upmchealthplan.com, or call 877-563-0292 and speak one-on-one with a UPMC Health Plan sales representative.  

UPMC Individual Advantage plans are now available in Allegheny, Armstrong, Beaver, Bedford, Blair, Butler, Cambria, Cameron, Centre, Clarion, Clearfield, Crawford, Elk, Erie, Fayette, Forest, Greene, Huntingdon, Indiana, Jefferson, Lawrence, McKean, Mercer, Potter, Somerset, Venango, Warren, Washington and Westmoreland counties.

Coverage can begin as soon as March 1, 2012.

UPMC Individual Advantage plans are medically underwritten, and persons can be denied coverage in accordance with their health condition. Children under age 19 cannot apply for coverage on their own. Children up to age 26 can be covered in plans purchased by their parents.

About UPMC Health Insurance
UPMC Health Plan, the second-largest health insurer in western Pennsylvania, is owned by UPMC, one of the nation's top-ranked health systems. The integrated partner companies of the UPMC Insurance Services Division – which includes UPMC Health Plan, UPMC WorkPartners, LifeSolutions (EAP), UPMC for You (Medical Assistance), and Community Care Behavioral Health – offer a full range of group health insurance, Medicare, Special Needs Plan (SNP), CHIP, Medical Assistance, behavioral health, employee assistance, and workers' compensation products and services to more than 1.7 million members. UPMC Health Plan's local provider network includes UPMC as well as community providers throughout Pennsylvania and parts of Ohio, West Virginia, and Maryland. For more information, visit www.upmchealthplan.com.

View the original article here