30 May 2013
Like the cool contradiction to the Santa Ana winds, a fresh sigh of relief was felt across Los Angeles last week when Covered California unveiled new rates for health insurance, showing the opposite of a sticker shock (for sticker shock, see above picture). The reality was more like a sticker tickle: a stickle if you will. More specifically, the opposite of when study groups, like the Society of Actuaries (SOA) forecasted 62% rate increases in California by 2017. So if SOA is SOL, who's to trust?
As mandated by Obamacare (Affordable Care Act), all individuals must have health insurance by 2014 or pay an annual tax. By October 1st, 2013, each state must operate a public marketplace called an Exchange (ours is Covered California) where carriers compete against each other to showcase the best, most affordable plans. Due to the nature of Obamacare, plans must meet essential health benefit requirements and be subject to tax credits (subsidies) for consumers who make between 100% and 400% of the Federal Poverty Level. That's right. If you're one of 3 million in California who qualify for subsidies, by enrolling in a plan offered by Covered California, subsidies will slash the price for health insurance. That important detail was somehow left out of some health care cost predictions earlier this year.
After Covered California unveiled new health insurance plans last week, proving health insurance in California would cost significantly less than predicted, some investigations followed. Why did "independent" groups like SOA tell prices would skyrocket 62%? Unfortunately it appeared 100% of Society of Annuities ignored subsidies in calculating the costs for future health insurance. Who funded such shoddy research? OptumRx, a subsidiary of UnitedHealth, one of the largest healthcare carrier in the country, who has a history of leaving out data to skew consumer perception.
In 2009, a Senate Commerce Committee discovered why consumers were paying so much to visit doctors outside of their network. For years, healthcare providers used a database from UnitedHealth's subsidiary, Ingenix to determine how much patients should pay to receive out-of-network care. The problem was Ingenix deleted high costs for out-of-network visits from their database, essentially saving doctors billions and overcharging patients in the process. Again, this didn't just affect UnitedHealth patients and networks. Any carrier who used the database overcharged patients, including such huge companies as Aetna and Cigna. UnitedHealth admitted no wrongdoing, but closed the database anyway and used an independent group's model instead.
Last week, UnitedHealth showed its true colors (or numbers) by backing out of the Covered California marketplace they smeared in the first place. What other major carriers backed out? UnitedHealth's buddies, Aetna and Cigna. Was is it really worth it when truth prevailed in the end? The world may never know....