AHIP's newest complaint – First thoughts

I’m being inundated with emails asking for my thoughts on the AHIP bombshell over the weekend that reform as prescribed by the Senate Finance Committee will raise the rates for health insurance by more than $4000 by 2019.

Look, I simply have to read the full report before I weigh in.  So give me some time to squeeze that into my day.  But here are some initial thoughts:

  • I think this is a likely reaction to the watered down mandate penalties.  The only way the insurance companies can swallow the loss of individual ratings was to get 47 million new customers.  If healthy people can opt out too easily, this is bad for insurance companies.  So they’re pressuring the Finance Committee to think about that.
  • This may be a shot across the bow for those seeking reform to give more concessions to the insurance companies, much like doctors and pharma have received.
  • On the other hand, I think this may possible backfire.  The insurance companies seem to be saying that they will be completely unable to contain the costs of insurance.  Ummm….  isn’t that the argument everyone makes for the public option?  Many believe that we need the public option to compete with private insurance so that they will be forced to find a way to lower costs.  Am I missing something here?

More later after I’ve fully digested the report.

UPDATE: I should have been more explicit.  AHIP claims premiums will go up $4000 above what is expected.  In other words, they say the bill will add an additional $4000 to whatever crazy amount we expected premiums would already go up already.  I imagine if premiums went up only $4000 total by 2019, we’d all be thrilled.

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