Dan Froomkin and Meg Carpentier have been looking at all the ways that health insurers will likely game the system in the next four years, before the new rules go into effect and how to get out of complying with them after.
Carpienter sums them up:
1. Raising premiums
There is absolutely, positively no prohibition on companies raising premiums at outrageous rates until 2014 — so they’re not going to stop....
2. Kicking people out for pre-existing conditions
The insurance industry may have relented about using pre-existing conditions to determine children’s eligibility, but ... the way they floated the idea that the law didn’t really totally require them to accept children with pre-existing conditions is a hint that they’re desperately looking for a similar loophole in 2014 and beyond.
3. Changing your insurance plan
...They’re busy shutting down and restricting access to managed care plans (HMOs) and pushing current customers into high-deductible plans, where customers have to pay all expenses out of pocket before the insurance company picks up a dime. ...[C]ustomers pay a (relatively) small premium each month and then the first $2,500 of their health care each year before the insurance company begins to cover a percentage of the costs of their medical care.
4. Making life more difficult for doctors
One great way to reduce insurance company payouts is to make it more difficult for doctors to file claims, which insurance companies are already planning on doing.
5. Tightening up internal practices
That’s a euphemism for giving patients and doctors enough of a run-around trying to get bills paid to convince them to give up asking for reimbursements.
6. Marketing only to healthy people
...[I]f they make certain drugs hard (or impossible) to find on pharmaceutical formularies, or put up physical barriers to obtaining the insurance, they can (and likely will) keep more elderly and sick people from even applying for their insurance.
7. Re-label current overhead expenses at health care
When the reform finally takes full effect in 2014, insurance companies will have to spend 80 percent of their premiums on care for their customers. Thus, in order to make more money, they’ll have to increase the money you spend on care, or figure out a way to classify expenses currently deemed “overhead” as “health care for you.”...
8. Taking full advantage of the unhealthy behavior premium
In the reform, insurers are allowed to makes premiums 50 percent more expensive for consumers who engage in “unhealthy” behaviors, which was intended to allow them to continue charging smokers higher premiums. But there are lots of behaviors deemed “unhealthy.”...
9. Charging old people as much as they can
The law allows insurers to charge people between 55 and 65 (the current age of Medicare eligibility) three times more than people 54 and under. So on their fifty-fifth birthdays, some customers could get new, higher insurance bills that put readjusted mortgage bills to shame — and there won’t be anything remotely illegal about it.
10. Lobbying to make the most of the loopholes that exist and create others
It likely goes without saying that all the money and lobbying time that went into watering down health care reform and trying to keep it from passing aren’t just going to stop flowing to Washington. Rather, as the Department of Health and Human Services spends its time promulgating rules to govern the various reforms in the bill, lobbyists will simply switch their focus from the Hill to HHS....
We're seeing some of this already. Aetna and Cigna have announced steep rate increases in response to reform. Meanwhile, it appears that WellPoint is trying to cook their books a la number 7 above.
Consumer Reports is calling for an investigation into WellPoint in light of an electronic message the company sent “to investors describing how it would simply re-label administrative costs as ‘medical care’ in response to the new health reform law.”
In the March 17th message, WellPoint — the nation’s largest insurance company — announced that it has reclassified some of its administrative costs as medical spending in order to increase its medical loss ratio (MLR, a techinical terms which measures how much insurers spend on administrative spending v claims). The ratio is closely monitored by Wall Street investors and the new health reform law “requires that insurers spend at least 80% of customers’ premiums on medical care in the individual insurance market, and 85% in the employer/group market.”
The insurers backed down on covering children with pre-existing conditions because of the huge political and media backlash against them. Basically, their timing really sucked--announcing their intention to flout the new law just hours after it passed, when everyone was still paying attention, was a colossal misstep on their part. The problem going forward is that, as we move on to other issues, the level of public scrutiny on them will likely decrease. Few are going to be paying as much attention to the behind-the-scenes rule-making process as we all did on the law-making process.
Which means, health insurance reform isn't over, and Congress is going to have to keep acting. The first step should be repealing the anti-trust exemption for insurers, if nothing else than as a message to the industry that this is not over.