A new federal and state program on health insurance rates will determine whether bad publicity alone is enough to stop insurers from levying steep increases, says the Wall Street Journal.
Starting Thursday, the Obama administration and states will automatically scrutinize any proposed health premium increase of 10 percent or more as part of the 2010 health overhaul law.
The change applies to an estimated 34.8 million insurance policies that Americans buy on their own or get through a small employer -- two markets where consumers have faced particularly hefty increases in recent years.
America's Health Insurance Plans, the industry's main lobbying group, found that about half of all increases in the individual-insurance market exceeded 10 percent each year for the past three years.
Before an insurer raises rates, it will now have to submit a seven-page form justifying the increase to regulators, who will determine whether the increase in rates is reasonable.
But there's a big catch. Even if regulators find the rate increase is unjustified, the law gives them no new powers to block the insurer from charging it. Instead, federal regulators say they are hoping that disclosure of large increases -- which will be posted on the Department of Health and Human Services' website --will be enough to discourage carriers.
Insurance-industry officials say the reviews amount to a shaming process and that many rate increases reflect the rise of hospitals' prices and usage rates of many medical procedures.
Carriers have said complying with the richer benefits called for under the health overhaul have increased their costs, yet they won't get to exempt them from rate-review calculations.
Some insurance regulators, including those who support the health law, say the provision has little point.
Policies offered through large employers, which generally haven't seen such sharp increases in recent years, won't be included in the review. Small-employer policies include those with 50 or fewer workers.
Source: Janet Adamy, "Steep Rises in Health Premiums Scrutinized," Wall Street Journal, August 30, 2011.
That less health care can lead to better health and, conversely, that more health care can harm health, runs counter to most patients' conviction that screenings and treatments are inherently beneficial. That belief is fueled by the flood of new technologies and drugs that have reached the market in the past two or three decades, promising to prevent disease and extend life. Most of us wouldn't think twice if our doctor offered a test that has the power to expose a lurking tumor, or a clogged artery, or a heart arrhythmia. Better to know -- and get treated -- than to take any risks, the reasoning goes, says Newsweek.
In fact, for many otherwise healthy people, tests often lead to more tests, which can lead to interventions based on a possible problem that may have gone away on its own or ultimately proved harmless.
Patients can easily be fooled when a screening test detects, or an intervention treats, an abnormality, and their health improves, says cardiologist Michael Lauer of the National Heart, Lung, and Blood Institute.
In fact, says Lauer, that abnormality may not have been the cause of the problem or a threat to future health: "All you've done is misclassify someone with no disease as having disease."
Experts estimate that the United States spends hundreds of billions of dollars every year on medical procedures that provide no benefit or a substantial risk of harm, suggesting that Medicare could save both money and lives if it stopped paying for some common treatments. "There's a reason we spend almost twice as much per capita on health care [as other developed countries] with no gain in health or longevity," argues Dr. Steven Nissen, a cardiologist at the Cleveland Clinic. "We spend money like a drunken sailor on shore leave."
Source: Sharon Begley, "One Word Can Save Your Life: No!" Newsweek, August 14, 2011.
Health Care Overhaul May Push Employee Benefits Shift
Nearly one of every 10 midsized or big employers expects to stop offering health coverage to workers after insurance exchanges begin operating in 2014 as part of President Barack Obama's health care overhaul, according to a survey by benefits consultant firm Towers Watson, reports the Associated Press.
Towers Watson also found in its July survey that another one in five companies are unsure about what they will do after 2014.
Another big benefits consultant, Mercer, found in a June survey of large and smaller employers that 8 percent are either "likely" or "very likely" to end health benefits after the exchanges start.
The surveys, which involved more than 1,200 companies, suggest that some businesses feel they will be better off dropping health insurance coverage once the exchanges start, even though they could face fines and tax headaches.
The percentage of companies that are already saying they expect to do this surprised some experts, and if they follow through, it could start a trend that chips away at employer-sponsored health coverage, a long-standing pillar of the nation's health system.
Benefits consultants say most companies, especially large employers, will continue to offer coverage because they need to attract and keep workers. But that could change if a competitor drops coverage first.
Source: Tom Murphy, "Survey: Overhaul May Push Employee Benefits Shift," Associated Press, August 24, 2011. "Employers Committed to Offering Health Care Benefits Today; Concerned About Viability of Insurance Exchanges," Towers Watson, August 24, 2011. "U.S. Employer Health Plan Enrollment Up 2% under PPACA's Dependent Eligibility Rule," Mercer, August 2011.
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