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On the Third Hand: Rates

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The Commonwealth Fund is distributing a paper on how states have implemented the Patient Protection and Affordable Care Act (PPACA) premium rate rules.

Justin Giovannelli, a researcher at the Georgetown University Health Policy Institute, and two colleagues have described how each state is tweaking the PPACA individual health insurance age-rating, geographic rating area and tobacco surcharge provisions.

PPACA now prohibits health insurers from using personal health information in decisions about whether to issue coverage, and it forbids insurers from using personal health information other than age and tobacco use when pricing the coverage. The law also limits insurers to charging the oldest enrollees three times more than it charges the youngest enrollees.

Giovannelli and his colleagues found that some states adopted tighter age-rating and tobacco surcharge rules than PPACA requires.

See also: D.C. exchange bars tobacco surcharge

On the one hand: The paper will be helpful to anyone who wants to know how states have tweaked the rate rules.

On the other hand: To me, what’s disturbing about the paper is that the authors talk about states’ efforts to minimize “premium shocks for consumers,” but never mention how much the rate rules increased rates for young, healthy consumers who earn too much to qualify for subsidies, or how the rules could affect insurers’ claim risk.

The analysts seem to treat the insurers as genies that can pay whatever claims the PPACA drafters, state regulators and consumers wish for them to pay.

On the third hand, the researchers could say that the genies are simply outside the scope of their article. But the genies have been awfully quiet about claims, and maybe it would be good for someone to knock on their lamps and see how they’re doing.


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