Increases projected despite federal reforms
Sandra Emerson, Staff Writer
Created: 09/11/2010 09:41:20 PM PDT

The health care reform bill may actually lead to higher premiums over the next few years, contradicting claims by the bill’s supporters that the reforms would lower health costs.

National health expenditures are projected to grow two-tenths of 1 percent faster annually through 2019 as a result of the implementation of the Patient Projection and Affordable Care Act as well as other changes to health laws and regulations, according to a study released last week by Medicare’s Office of the Actuary.

The health bill was signed by President Barack Obama in March after heavy debate between Democrats and Republicans over the bill’s impact and costs.

The bill was said to lead to lower costs for health insurance, but according to numbers provided by the Office of the Actuary, Americans will spend $265 more for health insurance in 2019, when the final components of the bill are implemented.

Under new health care laws, national health expenditures per capita will grow from $8,388 in 2010 to $13,652 in 2019, it was estimated. Under the prior law, expenditures per capita would have gone from $8,289 in 2010 to $13,387 in 2019, it was estimated.

“That’s one of the things they all fought and bragged about was that they’re going to put everyone on insurance and at the same time save money,” said Dr. Dev Gnanadev, medical director of Arrowhead Regional Medical Center in Colton and former president of the California Medical Association.

“Tell me how you can add more people to insurance and save money?”

National health care costs are estimated to be 19.6 percent of the gross domestic product, three-tenths of 1percent higher than without the reform.

“The total health care spending will be 0.3 percent more in 2019 compared to without the health reform, and that’s adding 33million people into the system,” Gnanadev said.

One component of the health care bill likely to lead to increasing premiums is prohibiting insurance companies from discriminating against pre-existing conditions.

“The impact there on health insurance premiums is very difficult to estimate how severe that will be,” said Greg Thorson, public policy professor at the University of Redlands.

The market is based only on healthy insured individuals, but nonhealthy individuals will now be entering into the system, he said.

“These people can no longer be excluded from health insurance,” Thorson said. “I think we’ll see a very significant pressure on premiums in an upward direction.”

Also likely to lead to premium increases is the federal mandate for individuals to purchase insurance, Thorson said.

“Both of those will lead to significant upward pressure and that, in my opinion, is why the health care legislation, although it did a lot of good things, failed in one of the most fundamental tasks, to control costs,” he said.

Several provisions that go into effect this month will cause premiums to rise, said Betsy McCaughey, former New York lieutenant governor and author of “Obama Health Law: What It Says and How to Overturn It.”

One provision is what the president called “free preventative care,” she said.

“It’s not free,” McCaughey said. “That law now requires that you pay for a whole range of preventative services in your premium.”

Services such as colonoscopies, mammograms, smoking cessation programs and pap smears will be included in everyone’s coverage.

“That means if you chose to get that service you don’t have to pay a co-pay, but it’s not free. You’ve already paid for it,” she said.

Some insurance companies have already filed for rate hikes with the California Department of Insurance.

Health Net was approved for a 16 percent increase. Anthem Blue Cross will increase premiums by 13.5 percent and Blue Shield premiums are expected to rise by 18 percent.

Aetna has filed for a 19 percent increase in premiums, but the state Department of Insurance is still reviewing its request.

Aetna claims the increase is necessary due to provisions in the new health care legislation that go into effect this year as well as a jump in the cost of health care services.

“I think if you look at the trajectory of health care expenses in general it’s going up at an alarming pace,” Thorson said. “I don’t think it’s suggested that the alarming pace is going to slow with the health care legislation as new pieces are being put on, like covering adult children, college age kids.”