Tuesday, May 20, 2014

Survey: 83% of Actuaries Note That ObamaCare Has Increased Healthcare Costs

... Based on current data, most health insurance actuaries believe that the demographics of individuals moving onto the exchanges will create a riskier health insurance market. According to the study, 86 percent foresee a shift in the relative morbidity of the newly insured and predict a significantly less healthy group of people joining the exchanges.  Of those actuaries polled, 84 percent felt that the age mix was a cause for concern from a risk perspective, and 62 percent noted anti-selection was occurring. Further, 93 percent anticipate a spike in utilization by the newly insured due to ‘pent up’ demand among those who didn’t previously have or qualify for health insurance, in turn creating a riskier market. 
“Risk is going to be increasingly managed by medical providers. But hospitals are not going to have the actuarial ability to do that well, and most won’t have the financial reserves - they will need reinsurance,” said Howard Dean, former Governor of Vermont and former Chairman of the Democratic National Committee, at the recent Munich Health Symposium. 
Shifting Risk, Higher Costs 
The vast majority of actuaries (83 percent) noted that the overall impact of the ACA has been negative on health insurance costs. Additionally, nearly half of the respondents (45 percent) noted that there will likely be an increase in pricing for the commercial market in 2015, as a result of the ACA. 
“Expect premiums to go up, cost to go up, spending to go up, utilization to go up, and that will all be directly attributable to Obamacare,” said Bill Frist, former U.S. Senate Majority Leader, at the 2014 Munich Health Symposium....