Businesses, States Seek Solutions To Rising Health Insurance Costs

News outlets, including The New York Times, reported on health insurance in light of the new law: "the country's biggest insurers are promoting affordable plans with reduced premiums that require participants to use a narrower selection of doctors or hospitals. The plans, being tested in places like San Diego, New York and Chicago, are likely to appeal especially to small businesses that already provide insurance to their employees, but are concerned about the ever-spiraling cost of coverage ... The tradeoff, they say, is that more Americans will be asked to pay higher prices for the privilege of choosing or keeping their own doctors if they are outside the new networks.

"But companies may be able to reduce their premiums by as much as 15 percent, the insurers say, by offering the more limited plans." Large employers are also interested, and the Times adds that many insurers "also expect the plans to be popular with individuals and small businesses who will purchase coverage in the insurance exchanges, or marketplaces that are mandated under the new health care law and scheduled to take effect in 2014" (Abelson, 7/17).

The Boston Globe reports that the "relentlessly rising cost of health insurance is prompting some small Massachusetts companies to drop coverage for their workers and encourage them to sign up for state-subsidized care instead, a trend that, some analysts say, could eventually weigh heavily on the state's already-stressed budget. Since April 1, the date many insurance contracts are renewed for small businesses, the owners of about 90 small companies terminated their insurance plans with Braintree-based broker Jeff Rich and indicated in a follow-up survey that they were relying on publicly-funded insurance for their employees."

"Precisely how many small businesses have recently given up offering insurance is hard to pinpoint. ... State officials said they have not seen convincing evidence that there is a trend" (Lazar, 7/18). 

Newsweek weighed in on the state's insurance market: "Massachusetts, which has already been the model for the national health-care overhaul, recently gave its regulators the authority to strike down excessive rate hikes—and the result was a nearly 90 percent rejection rate when insurance companies pitched their new premiums for the second quarter. ... [but] the promise of 24 million new customers should be enough to keep insurers from leaving the exchanges in protest. But if the same blunt approach is applied nationally, insurers may pull out to focus on more profitable market segments—and the promise of universal access could crumble" (Robillard, 7/18).

Kiplinger/The Washington Post examines the government's new health insurance website: "It makes it easy to learn about all your personal health insurance options. ... After you enter answers to a few questions (such as your state, age range and health status), the site immediately lists all of the private insurance plans in your area, as well as public programs you may qualify for -- such as the new Pre-Existing Condition Insurance Plan (the high-risk pool created by the new legislation), any existing high-risk pool in your state, the Children's Health Insurance Program and Medicaid -- with detailed information about coverage and eligibility criteria for each program in your state."

"This is the first time that all of the public and private options have been listed in one place and personalized, which was a major undertaking, because some health-care programs are national, some state-based and some local. ... HealthCare.gov is a great first stop for anyone who is searching for health-care options. But you'll still need to explore further to do a comprehensive search for health insurance" (Lankford, 7/18).

Bloomberg BusinessWeek: "U.S. life and health insurers were subjected to regulatory intervention last year at the fastest pace in a decade as they lost money on investments and promised more to clients than they could deliver. The industry 'has yet to fully shake off some of the lingering effects of the financial crisis,' Carole Ann King and Joe Niedzielski, analysts with insurance company ratings firm A.M. Best, said in a report released today. Twelve insurers were targeted for regulatory action last year, the most since 1999 when 24 carriers were deemed impaired. The number will probably rise this year, A.M. Best said" (Frye, 7/19).

Related, earlier KHN story: What You Need To Know About The Government's New Health Insurance Website (Galewitz, 7/1).

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