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KFF survey finds higher deductibles in 2012

Posted on June 19, 2012 | No Comments

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The Kaiser Family Foundation released a nationally representative survey of 500 health insurance agents and brokers working in the individual and small group markets which explores their outlook on market trends and views on the Affordable Care Act (ACA). The survey finds that many agents are seeing steep increases in premiums and deductibles for individuals and small businesses purchasing health insurance. When asked to estimate what they expect to be the typical premium increase in 2012 based on what they have heard from insurers, four in ten agents (39 percent) say they expect premiums to increase between 11% and 20% and another third (33 percent) expect them to increase between 6% and 10%. Deductibles are also increasing: about half of agents (51 percent) report that currently, the most common deductible amount for single coverage plans is $2,000 or more, compared to one in five who say deductibles were in this range two years ago.

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A new poll conducted by the The Associated Press and the NORC Center for Public Affairs Research suggests that high deductibles remain a significant barrier to health care for many privately insured Americans. The survey finds that of privately insured adults under age 64, about one in five said they don’t go to a doctor when they are sick despite having health coverage. A similar number of survey respondents reported going without preventive care and cutting back on retirement savings, or having to use all their savings for care. These issues were particularly acute among the 26 percent of respondents with high deductible plans. Consequently, about half of those surveyed said they preferred higher premiums over higher out-of-pocket costs.
A new survey conducted by the Kaiser Family Foundation (KFF) discusses the experience of individuals that were enrolled in the individual health insurance market prior to the Affordable Care Act (ACA), and then switched into the ACA health insurance Marketplace. The survey found that 46% of these individuals have lower premiums after switching to the ACA Marketplace, while 39% have higher premiums. Additionally, about 50% of these "plan switchers" received cancellation notices from their insurance issuers because their plans were deemed non-compliant with the ACA prior to the issuance of the transitional policy. The survey also indicated that affordability is still an issue for individuals enrolled in ACA plans, as 6 in 10 of those surveyed fear their plans may become unaffordable in the future.
In their 2011 Employer Health Benefits survey, the Kaiser Family Foundation (KFF) and the Health Research & Educational Trust (HRET) found that annual insurance premiums for family coverage were over $15,000 this year, which is up more than 9% since last year. This increase is also significant because it outpaced both general inflation and workers' wages. The survey also found that 1 in 4 workers (23%) are members of health insurance plans that changed their cost sharing requirements for preventive services as a result of the Affordable Care Act (ACA), and 31% of workers are enrolled in plans that changed the preventive services offered because of the ACA. Additionally, 2.3 million young adults have been added to their parents' insurance plans in accordance with the provision in the ACA allowing children to be covered on their parents' plans until age 26.
A new Commonwealth Fund report found that insurance premiums increased by an average of more than 40 percent nationally from 2003-2009, which is over three times the rate that median incomes rose during the same time period. The report, "State Trends in Premiums and Deductibles, 2003-2009: How Building on the Affordable Care Act Will Help Stem the Tide of Rising Costs and Eroding Benefits," also found that on average, deductibles rose almost 80 percent from 2003-2009. However, the report shows how effective implementation of the health reform could save more than $3,000 annually by year 2020 if premium growth is slowed by just 1.5 percent a year.
Today, the U.S. Department of Health and Human Services (HHS) Secretary Kathleen Sebelius announced that HHS has deemed insurance premium increases in five states as "unreasonable." HHS determined that Trustmark Life Insurance Company has proposed unreasonable health insurance premium increases in five states—Alabama, Arizona, Pennsylvania, Virginia, and Wyoming. The excessive rate hikes would affect nearly 10,000 residents across these five states. To make these determinations, HHS used its “rate review” authority from the Affordable Care Act (ACA) to determine whether premium increases of over 10 percent are reasonable. In these five states, Trustmark has raised rates by 13 percent. HHS determined that the rate increases were unreasonable because the insurer would be spending a low percent of premium dollars on actual medical care and quality improvements, and because the justifications were based on unreasonable assumptions.
On May 5th, 2010 Secretary Sebelius issued a press release urging the re-examination of recent rate increases after California rejected Anthem Blue Cross increases. The Secretary called on States to strengthen their regulatory rate review authorities. See the press release here.
An earlier Implementation Brief provided an overview of the Disclosure and Review of Unreasonable Health Insurance Premium Rate Increases, which was established by §1003 of the Affordable Care Act (ACA) by adding §2794 to the Public Health Service Act (PHSA). On May 23, 2011, the Centers for Medicare and Medicaid Services (CMS) of the U.S. Department of Health and Human Services (HHS) published a final rule (with comment period) establishing a rate review program of “unreasonable” health insurance premium rate increases and implementing requirements for health insurance issuers regarding the disclosure and review of such unreasonable premium increases.
Over the past decade, health insurance premiums have doubled (with particularly sharp increases in the small group and individual markets), making insurance coverage unattainable for millions of Americans. News stories have reported that some health insurers have sought to increase premium rates as much as 50 percent.