Not an actuary or health economist but …

Guest post by:

160810 Bette Grey

Bette Grey, BA, RRT, CPFT
Grey Medical Advocate, LLC
Founder: Columbia County Volunteers in Medicine Clinic, Inc.
Author:    Death Is Not An Option: A View From A Free Medical Clinic



A week ago, I had the occasion to travel to Harrisburg to participate in a public information session regarding the anticipated insurance rate hikes for the individual plans acquired via the Federal Marketplace. As part of that information session, PA’s Insurance Commissioner, Teresa Miller, along with others from the State Insurance Department, listened intently to six insurance companies and their proposed average rate hikes depending on the plan, Aetna (17.2%), Capital Blue Cross (20.4% to 27%), Geisinger Health Plan (40.68% to 41.23%), Highmark (25.4% to 48.1%), Independence Blue Cross (19.9% to 22.5%) and UPMC (0.9% to 16.16%).

A few well designed specific questions were asked of each insurance company and they spit back what I would consider very “canned” answers. As I sat and listened as actuaries and other representatives from each company presented the case as to why the rates should be increased anywhere from 0.9% to over 40%, a thought from Benjamin Franklin came to mind, “If you fail to plan, you are planning to fail”. Their reasoning for submitting the large rate hikes was “the overall increase is largely due to the claims experience in ACA compliant individual market plans being much HIGHER than what was assumed in the current rates”. Also, three terms, reinsurance, risk corridor, and risk adjustment were explained as to their contributions toward the proposed rate increases, again some of these items have an end date as specified in the ACA verbiage; again it is all about planning.

I am no actuary or even health care economist but all of the insurance companies had to have known in 2010 when the ACA was passed, if lots of folks who were uninsured and had not sought any type of treatment through the years all came onto the market with chronic diseases, this would be costly initially and for several years after. Even if they started to put together actuarial charts in 2011 and did their mathematical determinations, one would think they would have “planned” for a high rate of claims and adjusted their premiums moving forward. And after a one year experience as part of participating in the Federal Marketplace, there should have been valuable knowledge gained about potential costs.

What really increased my angst was when one of the insurance company personnel came back and sat down right by where I was seated and I over heard him say, “I didn’t drop any bombs did I?”, of course this was after they were regaling themselves with the success of their presentation, next I was waiting for the high fives and fist bumps.

Later in the proceedings there was an opportunity for healthcare consumers (notice I did not call them patients), to share their stories about the annihilation of their lives when they could not either afford their coverage or when they lost it at a critical time in their lives. Several thanked the insurance department for holding the hearing and explaining it had taken eight months and volumes of calls/emails to get a meeting of this type scheduled. I really get confused as to the priorities FOR the citizens of the Commonwealth, by those who reside in places of power in Harrisburg. I would believe that if transparency truly exists it would mean that public input should be held each time at multiple sites around the state there is a proposed rate hike by health insurance companies.

I was able to offer at the appointed time a short testimony, informing them of the area in which I live, Columbia County, shared statistics from the last census, including the median income, the level of poverty, the level of uninsured, etc. I asked simple questions and made simple statements—why transparent administrative costs do not include what the CEO and their senior management are getting paid; inquired as to why insurance companies pull a “bait and switch” method with Marketplace plans, in other words your insurance plan is no longer being offered, therefore another plan becomes the option at a higher premium and different benefits; why is it so difficult to understand “the language” of the insurance companies, even though many testified everything is in understandable layman’s terms; the amount of “surplus” money each insurance company has in its coffers, albeit we were informed that money is just not laying around in a savings account,(one can only wonder if some of it is being used in large sporting arenas across the state in the form of marquees or even being used to sponsor sporting teams or events); why Marketplace plans offer for instance the co-pay or insurance for a particular service a percentage of an unknown, for instance 30% co-insurance after the deductible, as far as I know there are no cost listings for treatment in healthcare facilities; why medical providers’ treatments are decided not by their lengthy medical education and experience, but rather by what the insurance company “thinks” is the “right” treatment; having been involved from the first time enrollments were available, the premiums have increased already by at least 35% to 40% up until now; and lastly, per the insurance companies, special enrollments for the Marketplace are relatively easy to get, not in my current experience.

I will always say that the Affordable Care Act has been able to offer several life lines to folks who would not ever have insurance through their employers, would always be denied insurance due to pre-existing conditions (yep I was too short and too fat before the ACA to get individual coverage), vital preventive services, and no caps any longer for necessary treatments.

And to the gentleman who asked about dropping any bombs during his presentation, I wanted to advise him if his company’s significant rate increase were approved, the bombs that would be dropped would be of those in the trenches for the subscribers to decide if they would put food on the table or have a roof over their head instead of paying the increased premiums. Many would consider it to be easier to go without and pay the necessary penalty. And if that is the case, doesn’t that put us right back to square one. At some point, someone, somewhere has to step up and say no matter your status in life in this country, you should have reasonable healthcare coverage.

There is still time to voice your opinions, (final decisions are due out in October), either at or submit in writing to:

Teresa Miller, Insurance Commissioner
Pennsylvania Insurance Department
1326 Strawberry Square
Harrisburg, PA 17120

One comment

  1. Thank you for your post. The ACA was and continues to be a valuable piece of legislation, but as you note needs a lot of work. The people benefiting from the Act are the Insurance companies.

    I for the first time am looking for health insurance outside of an employer sponsored plan and it is mind blowing. Most of us have shopped for car insurance, home owners and other type of insurances, but generally have not had to ‘shop’ for healthcare if we were employed. The Affordable Care Act/Marketplace has provided a tool for people to ‘shop’ to find insurance that can meet their needs. The system is not perfect, but it is a start and all stakeholders, need to share their experiences and insights how to make it better.

    The key issue that I keep hearing as to why the insurance companies are pulling out of various sectors is that number of insured people are too risky so the cost of care is impacting the profits of insurance companies. Also, young, healthy people have not joined so the base is not there to support the system. My question is why are the insurance companies not advertising to the market they need to have join. They have marketing departments that can do this and raise the base. Also, all insurance companies have case management departments, wellness coordinators, and other professionals who can help those with chronic diseases better understand their conditions and manage them better. What are they doing for their dollars? They need to be held accountable for the work they do as payers and for the providers they have as part of their networks. In my mind, they should not get a penny increase in their rates till they show their outcomes for the work they are doing. The consumer is being held hostage and that has to change.

    Betty, I agree with you that the forum you attended needs to be state wide and encourage people from all viewpoints to participate. I would like to find/and will search for this type of meeting in Florida, as I would go to it and share my experience and be part of the solution. Thanks for your post.

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