Ad­vo­cates seek to cut costs of health in­sur­ance

Law­mak­ers hear pro­pos­als, com­plaints at hear­ing

Baltimore Sun - - MARYLAND - By Mered­ith Cohn mered­ith.cohn@balt­sun.com

State law­mak­ers heard from con­sumer ad­vo­cates Wed­nes­day on how to slow pre­mium in­creases for those buy­ing health in­sur­ance on the state ex­change, pro­pos­als that might also mod­er­ate costs for the ma­jor­ity get­ting cov­er­age through an em­ployer.

Nearly 163,000 Mary­lan­ders got their in­sur­ance this year through the on­line health ex­change cre­ated un­der the Af­ford­able Care Act, and the ma­jor­ity get fed­eral sub­si­dies to help pay for it. But some must pay the full freight of in­creases rang­ing from 20 per­cent to 30 per­cent next year, and law­mak­ers were con­cerned about the long-term sus­tain­abil­ity of the in­sur­ance pro­gram and the af­ford­abil­ity of health care gen­er­ally.

“We have to look at the cost driv­ers of health care,” said Del. Su­san W. Krebs, a Car­roll County Repub­li­can, dur­ing a hear­ing on in­sur­ance rates called by the House’s Health and Gov­ern­ment Op­er­a­tions Com­mit­tee and the Se­nate’s Fi­nance Com­mit­tee. “We’re just pay­ing for more of the same sys­tem ev­ery­one is say­ing is too ex­pen­sive.”

The hear­ing came as the fed­eral health law, in­for­mally known as Oba­macare, be­came an is­sue in the pres­i­den­tial cam­paign af­ter fed­eral reg­u­la­tors said mi­dlevel health plan costs na­tion­ally would rise about 25 per­cent.

Leni Pre­ston, pres­i­dent of the ad­vo­cacy group Con­sumer Health First, told law­mak­ers that the state could con­sider adding a public op­tion if Congress failed to act. An­other op­tion sug­gested was merg­ing the small-busi­ness and in­di­vid­ual mar­kets to widen the risk pool.

Mary­land In­sur­ance Com­mis­sioner Al Red­mer told law­mak­ers his agency ap­proved big rate in­creases this year be­cause ex­change con­sumers were sicker and thus costlier than in­sur­ers imag­ined. He said en­rolling more young healthy peo­ple would help.

“If we don’t get the young folks, I don’t know if we’ll ever reach equi­lib­rium,” he said.

Other ad­vo­cates noted that ex­change of­fi­cials are al­ready tar­get­ing healthy peo­ple who have avoided en­rolling with mes­sages about avail­able sub­si­dies and penal­ties for go­ing with­out cov­er­age. The fed­eral penalty for 2016 is 2.5 per­cent of house­hold in­come or $695 per adult, which­ever is higher.

Vin­cent DeMarco, pres­i­dent of the Mary­land Cit­i­zens’ Health Ini­tia­tive, called the health law suc­cess­ful be­cause it cut the state’s num­ber of unin­sured in half to 6.6 per­cent last year from 14.5 per­cent be­fore the 2010 law.

But he agreed fixes are needed and called for tar­get­ing a big cost driver: pre­scrip­tion drug prices.

He said the law­mak­ers could re­quire drug com­pa­nies to dis­close spend­ing on re­search and devel­op­ment to jus­tify price hikes and to no­tify the public of price in­creases so com­pa­nies could face scru­tiny.

Some con­sumers who don’t qual­ify for sub­si­dies say the weight of in­creases is al­ready bur­den­some.

Michael De­lauter, a Fred­er­ick County lawyer who buys cov­er­age on the in­di­vid­ual mar­ket, said he paid a monthly pre­mium of about $535 for his fam­ily of five in 2013. The bill rose to more than $989 this year and will go to $1,613 in 2017 — a 63 per­cent in­crease.

That’s with one fewer fam­ily mem­ber on the plan and a de­ductible that more than dou­bled to $13,100, he said. Chang­ing plans means re­duced doc­tor choice and maybe not much sav­ings.

“If a pres­i­den­tial can­di­date ran on the po­si­tion that he or she had a great way to help the poverty-stricken get health in­sur­ance — just tax the sole pro­pri­etors and small-busi­ness own­ers an ad­di­tional $15,000 or $20,000 each year — he or she would be laughed off the stage,” De­lauter said. “And yet that is ba­si­cally the ef­fect of the ACA.”

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