Contradicting Florida’s Office of Insurance Regulation, a study from the RAND Corporation reports that the Affordable Care Act is unlikely to cause a hike in premiums for the individual market in this state or nationally.
The Rand study findings stand in stark contrast to the widely publicized predictions of Florida Insurance Commissioner Kevin McCarty. On July 30, the Palm Beach Post published a prediction from McCarty that customers in the individual market would see rate increases of 30 to 40 percent for next year. Newspapers across the state picked up the refrain.
McCarty at the time said the premiums would shoot up because insurance carriers will no longer be able to screen out customers who have health risks. The forecast applied only to 5 percent or so of Floridians who bought their own policies, rather than getting them through their workplace or some other source.
But researchers from the well-known, non-partisan Rand Corp. found something quite different when they modeled what will likely happen in Florida, one of 10 states they focused on.
In Florida and four other states, in an apples-to-apples comparison, “the law causes no change in premiums,” the study summary concludes. Among the other states, premiums for the individual or “nongroup” market were forecast to rise in three and go down in two.
RAND forecast that there would be little or no rise in premiums in the small group market in nine of the 10 states, including Florida. McCarty’s staff predicted a hike of 5 to 20 percent in small-group premiums.
“We conclude that the Affordable Care Act will lead to an increase in insurance coverage and higher enrollment in the nongroup market,” the authors wrote. “Our analysis suggests that comparisons of average premiums with and without the Affordable Care Act may overstate the potential for premium increases.”
McCarty’s analysis, led by Deputy Commissioner Wences Troncoso, forecast an influx of sick people into the nongroup market that would force up costs and premiums. The Rand team predicts that will be offset by an influx of healthy young people, motivated by the law’s requirement to get coverage and the subsidies available to those with modest incomes.
In Florida, the federal online Marketplace will make tax credits available on a sliding scale to individuals and families with incomes between 100 and 400 percent of the federal poverty level. (Families USA has posted an income reference chart, and the Kaiser Family Foundation provides a subsidy calculator.) The Marketplace is scheduled to be open Oct. 1 through March 31 for 2014 coverage.
The six researchers who performed the RAND analysis say they think the nongroup market in all 10 states will expand, growing from around 4.3 percent to about 9.5 percent. The small-group market, used mainly by businesses with fewer than 50 workers, will remain stable, they predicted.
They think that while some employers may drop coverage for workers, that will be offset by employers taking advantage of new “SHOP” exchanges. In the 33 states that are letting the federal government create and manage the exchanges, including Florida, the one for small businesses will be delayed for a year.
The study was commissioned by the U.S. Department of Health and Human Services. It was peer-reviewed.
–Carol Gentry, Health News Florida
Joe says
The study is wrong, mine just doubled!
Ron says
Insurance cost increases? That’s impossible. Glorious leader and tin god baroke obamma promised repeatedly that the Affordable Care Act would not cost Americans an additional dime.
Could obamma been lying??
Could obamma been dishonest??
Could obamma been a devious?
Could obamma been insidiously corrupt??
Could obamma been misleading?
Could obamma been guilty of prevarication??
Could obamma be the most dishonest, conniveing, low down U.S. president in history??
Could obamma be selling America down the road into distaster??
Could obamma been tricking people into dependency to secure their votes and accept the fraud of obammacare??
Hmmmm……
Christopher V. says
I do not know who is in any sample group regarding any insurance premium increases, small or large. I only know that my individual policy (BCBSFL) increased 20% on August 1st. These survey organizations should talk to real people, not just a group who makes their survey numbers say what they want.
Binkey says
The study is right, mine changed by $4
Nancy N. says
Did your benefits change? The ACA law mandates certain minimum benefit standards. If your previous policy wasn’t up to the minimum level mandated by ACA, your premium may have gone up because the policy must now include new benefits as of January 1st.. So-called “catastronphic” policies with massive deductibles that only cover huge medical incidents are no longer allowed. Benefits have to be available for everyday wellness expenses, and with lower deductibles.
A.S.F. says
The government is not trying to take advantage of you. Some insurance and pension management companies, as well as some employers (if you are still working), might. Leopards don’t change their spots. Entities that consistently put the interests of profit over people WILL try to take advantage, if they think they can spot ways to do so.
RHWeir says
Well, my wife is of the 5%:” The forecast applied only to 5 percent or so of Floridians who bought their own policies, rather than getting them through their workplace or some other source.” I don;t believe 5% is at all correct. A lot of employers do not provide and will not provide health insurance. The ACA does not require it this year and her employer has stated in 2015, no one will get 40 hours. Yeah, the premiums are going up. Let’s ditch the ACA, it’s as ineffective as this lousy, amateur local Chicago politician masquerading as the president. He’s as bad as W. We seem to be cursed since Bill left office.
Dave Shampine says
After thirty years of dealing with statistics there one constant truth that I’ve learned. Figures Lie and Liars Figure. You can twist the numbers to say just about anything that you want them to say to support you cause.
As far as Obamacare is concerned, I’m positive that this “truth” is used profusely by both sides of the aisle.
rickg says
That’s just one sample Joe and we don’t really know the particulars of the type of health insurance you may have. My preference would have been a single payer option which would have made those health insurance for profit companies tighten their collective sphincters a bit. The Legislature led by the Rs since 1998 has allowed insurance companies… yea all of them… to pick the pockets of Floridians for years whether the insurance be for home owner, health, automobile, windstorm etc… Insurance rates even before the ACA were always increasing… much more than the taxes I pay and why aren’t there protests about insurance rates???
Anacrust says
My BCBS individual coverage went from $117 to $142 on Aug 1st and I won’t be surprised if I see it raised again on Jan 1st.
A.S.F. says
I agree with you about single payer. The Republicans in Congress and their consituency, wouldn’t hear of it. I don’t know why we can’t put the needs of human beings, first and foremost, given that, whatever our politics, we are ALL human beings. We have met the enemy and he is us.
Sherry Epley says
Rick Scott, and no one else is to blame if your health insurance premiums start increasing more than usual. You are not going to believe this, but check it out for yourself.
Our “brain trust” of a governor, in May, signed into law a policy that strips our Insurance Commissioner of any powers to negotiate health insurance rates. No wonder he thinks the rates may increase. . . the door is now wide open!
http://www.tampabay.com/news/politics/national/politifact-did-florida-lawmakers-yield-authority-to-negotiate-rates-under/2135502