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March 15, 2013 at 09:50 AM
Republicans on the House Energy & Commerce health subcommittee today tried to move the focus of Patient Protection and Affordable Care Act (PPACA) discussions toward the nuts and bolts of implementation.
Wendell Potter, a former Cigna Corp. (NYSE:CI) executive who supports PPACA, talked at a subcommittee hearing on PPACA costs about how PPACA might have helped the family of Leslie Elder, a woman who faced bankruptcy and foreclosure because of a combination of Hodgkin’s lymphoma and an inability to qualify for health insurance.
The current efforts to change PPACA rules to “hold down costs” really exist to “help insurance companies meet profit goals,” Potter said.
Another witness, Christopher Carlson, an actuary at Oliver Wyman, suggested that the actual effects of PPACA might be different what supporters of the law expect.
Actuaries at Oliver Wyman — a consulting firm controlled by an insurance broker — are estimating, for example, that a new PPACA premium tax that will start in 2014 could increase health premium prices significantly all by itself, Carlson said.
PPACA drafters included the provision to raise money for PPACA programs, and to recoup a share of what drafters assumed would be a windfall health insurer profits as a result of new PPACA health insurance purchase subsidies.
The total tax revenue is supposed to start at $8 billion in 2014 and rise to about $14 billion in 2018.
“We estimate that the impact of these taxes will be to increase premium rates by 1.9% to 2.3% in 2014, and by 2.8% and 3.7% in years 2018 and later,” Carlson said.
Because the tax is not deductible for federal taxes, the insurers will probably collect a total of $73 billion in extra premiums to cover the $60 billion cost of the payments to the government, Carlson said.
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If PPACA works as drafters expect, new PPACA insurance rules meant to make coverage more accessible for older, sicker Americans will ban use of most personal health information in decisions on whether to sell an individual coverage. The law also will set new limits on use of health information other than age and location when carriers are pricing individual and small-group coverage.
Those rules may increase coverage prices for some young, healthy consumers with incomes high enough that they do not qualify for the new PPACA coverage subsidies, but most young adults will benefit from the changes, and new PPACA coverage standards will ensure that the coverage young people do have is solid coverage, Potter said.
Today, many young people with so-called affordable coverage have policies that will leave them with huge bills if they ever become seriously ill, Potter said.
