Actuary report not reassuring

As the federal government moves to implement the Affordable Care Act, cost and access concerns are coming to the fore.

As a general proposition, people brace themselves for an increase when it's time to renew their health insurance policies. Annual increases have become as routine as rain in April.

But price hikes will be especially brutal next year, according to a recent report by the Society of Actuaries, because heavy implementation of the Affordable Care Act begins on Jan. 1, 2014.

The society's report predicted that the overwhelming number of this country's 50 states will see double-digit increases for individual health insurance. Members of group insurance plans are not expected to face such substantial increases.

Illinois is among the states to be hardest hit by price increases, an estimated 50.8 percent by 2017. Over that same period, prices are expected to increase 62 percent in California, 80 percent in Ohio, and 20 percent in Florida. A handful of states, like New York, may see price declines.

There is no question that the Affordable Care Act, known popularly as Obamacare, will reduce the number of uninsured. The report estimated the number of currently uninsured will fall from 52.4 million to 32.4 million as people take advantage of a variety of options to obtain health insurance, including enrolling in Medicaid and purchasing insurance from new health insurance exchanges.

However, aside from rising prices, it's hard to anticipate the specific outcomes.

For instance, some people may opt to defy federal law and not purchase health insurance, preferring instead to pay a nominal fine for failing to do so.

Rather than pay higher rates, employers also may opt to pay fines that would be less than their employee health insurance costs, forcing employees to find insurance on their own.

Curiously, Obamacare provides perverse incentives that encourage both individuals and employers not to purchase insurance for themselves or their employees by making fines less costly than insurance.

Some have speculated that's because the real intent of the legislation is to move the country gradually to a government-run health care system, similar to those in Canada or Great Britain. But that is just speculation.

All that is certain right now is the uncertainty surrounding the implementation of Obamacare.

But the signs are not encouraging, particularly with respect to cost and service providers.

The U.S. Senate last week expressed its symbolic support for repealing one of the key sources of financing Obamacare, a tax on the gross receipts of medical device makers. People can look forward to a big fight on the issue between President Obama and bipartisan majorities in the House and Senate.

Further, surveys indicate that many doctors are preferring to work less or retire rather than dealing with the sea changes required under this vast expansion of government control of the health care system. According to National Review, a 2012 survey of nearly 14,000 physicians shows a "silent exodus of physicians from the work force."

"Physicians are working fewer hours, seeing fewer patients and limiting access to their practices," according to the survey, which went so far as to predict that the equivalent of 44,000 doctors will leave the work force.

Perhaps things won't work out as expected. Perhaps President Obama's uniformly positive predictions of life under Obamacare will be realized. Everyone should hope so because the alternative theories posed in reports like the one from the Society for Actuaries are almost uniformly unpalatable.

Sections (2):Editorials, Opinion
Categories (2):Editorials, Opinions

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