HEALTH CARE ACT - Cost Spike?

"Should you be prepared for health care sticker shock?" PBS NewsHour 6/3/2015

Excerpt

SUMMARY:  Under the Affordable Care Act, the expected health care price spikes for coming year range from 20 to 85 percent.  Those who are covered by their employers are also paying more out of pocket.  What’s behind the increases?  Gwen Ifill talks to Dr. David Blumenthal, president of the Commonwealth Fund, and Larry Levitt, Senior Vice President of Kaiser Family Foundation.

GWEN IFILL (NewsHour):  If it feels like you are spending more for health care through higher deductibles or premiums, you may be right.  Under the Affordable Care Act, insurers are required to post rate increases if they exceed 10 percent, and, in many cases, the price spikes for the coming year range from 20 percent to 85 percent.

And another study shows people who are covered by their employers are also paying more through higher out-of-pocket costs that leave as many as 31 million people underinsured.

Larry Levitt studies this for the Kaiser Family Foundation, and Dr. David Blumenthal is the president of the Commonwealth Fund, which released a second survey on out-of-pocket costs.

Larry Levitt, could you explain to me why these price hikes are going up all of a sudden?  Or is it not all of a sudden?

LARRY LEVITT, Senior Vice President, Kaiser Family Foundation:  Well, first, I would say that it’s hard to generalize from what we have seen so far.

I mean, as you said, insurers are only required to report right now increases of 10 percent or more.  So, not surprisingly, those are all in double digits.  But that said, reading the tea leaves, it does look like premiums are heading upwards.

And it’s for a combination of factors.  I mean, first of all, health care costs, which have been growing very slowly recently, are increasing faster, particularly for prescription drugs.  And insurers are for the first time under Obamacare setting premiums based on actual experience with enrollees.

Up until now, they were guessing at how much health care people were using.  Now they have actually some experience under their belts and in many cases people are — look to be sicker than insurers expected.