The White House has accused WellPoint Inc. of “cherry picking certain policies and ignoring major aspects of reform” in a collection of analyses of how health reform might affect some of the states it serves.
WellPoint, Indianapolis, (NYSE:WLP) has developed impact analyses for 14 states where it is especially active.
WellPoint analysts focused mainly on the effects of provisions such as bans on medical underwriting and increases in health care and health plan fees and taxes.
“There are other elements in health care reform that may, over the long-term, have a lesser and indirect impact on premiums in the private market that are not specified in this analysis,” WellPoint says in the summary of results for Missouri.
But, unless Congress makes sure that all people, and especially young, healthy people, really have to own health insurance, the underwriting rule changes and the new fees will affect premiums in ways that “will exceed any aggregate savings that can potentially be achieved through other elements of proposed legislation,” WellPoint says.
Having individuals and small groups buy subsidized coverage through an insurance exchange might, for example, reduce insurance company administrative costs, but “the assessment to fund the exchange would roughly offset any reduction in insurer administrative costs,” WellPoint says.
In Missouri, for example, average health premiums likely would fall 11% for older, sicker individuals, and 26% for small employers with older, sicker employees, but average premiums would increase 122% for typical individuals and 18% for typical small employers, WellPoint says.
Government subsidies would affect the rates that individuals actually pay.
In a post-reform world, a 60-year-old couple with health problems and an annual income of 150% to 200% of federal poverty level might pay just $178 per month for coverage, or 77% less than under pre-reform rules.
If the couple had an income of 300% to 350% of the federal poverty level, it would pay $672 per month for coverage, or 13% less than under pre-reform rules.
In New York state, which already requires insurers to sell individual and small group coverage to all comers, without using health status to set rates, the situation would be somewhat different, WellPoint says.
There, the proposed underwriting changes would have little or no effect, and measures such as new fees and subsidies would have a significant effect. Combined, those measures could increase the average cost of coverage 82% for individuals and 6% for small employers, WellPoint says.
With subsidies included, the cost of coverage would fall 40%, to $204 per month, for a family of 4 with income from 200% to 250% of the federal poverty level, and increase 24%, to $421 per month, for a family of 4 with income of 300% to 350% of the federal poverty level.
For a family of 4 with income of 400% of the federal poverty level and no access to subsidies, the monthly cost would increase 82%, to $619 per month, WellPoint says.
The White House says in a “Reality Check” post on its blog that saysWellPoint is wrong..
“Constructive debate on health care is always welcome,” Jesse Lee, a White House blogger, writes. “Unfortunately, what we’ve seen out of the insurance industry over the past few weeks can’t be categorized as either ‘constructive’ or even a ‘debate’ but rather a misinformation campaign designed to confuse and distract attention from those who are seeking real health care solutions.”
The WellPoint state health reform impact analyses use the same kind of selective approach that America’s Health Insurance Plans, Washington, and the Blue Cross and Blue Shield Association, Chicago, have used in their recent impact analyses, Lee writes.
“Among the policies that WellPoint’s study consciously ignores: special policies for young adults including premium credits and a special ‘young invincibles’ plan; reinsurance to lower the cost of catastrophic care; and the benefits of creating a new health exchange,” Lee writes.
By improving and expanding access to health coverage, health reform would “reduce the $1,000 hidden tax tens of millions of Americans pay for the uncompensated care of the uninsured,” Lee adds.