Anthem warns of premium increases
Anthem Blue Cross and Blue Shield says the problem with health-care reform is that people who avoid the proposed requirement to buy insurance won't pay a big enough penalty for doing so.
It's a key reason why a new study the insurer gave Virginia's federal legislators yesterday warns of premiums increasing by double-digit percentages.
WellPoint Inc., Anthem's parent firm, has spent $3.7 million lobbying in Washington this year, while the national Blue Cross Blue Shield Association has spent more than $3.9 million, according to disclosure reports compiled by the Center for Responsive Politics.
"There will be winners. However, there will be many more losers," said Burke King, president of Anthem Blue Cross and Blue Shield in Virginia, in a news conference announcing the findings.
Much of the increase would come because the penalties for avoiding buying coverage would be less than the likely premium rates for the healthy, he said. That means only less-healthy people would buy insurance, while the increased claims they would likely make would force rates up.
That effect accounts for about half of the 96 percent increase Anthem estimated a Richmond family of four would pay for individual coverage through a high-deductible policy, rising from $388 a month to $762.
That calculation excludes the effect of subsidies included in reform proposals that for a family with a gross income of $60,000 a year would mean a reduction of the net cost of insurance to $396, or a 2 percent gain, according to tables Anthem provided after the news conference.
The better benefits in the proposals also would raise the costs, as well as new rules banning insurers from charging women higher premiums than men and setting limits on how much more they can charge older people. In addition, new taxes on insurers would boost costs.
Anthem estimated that a small employer with eight employees in average health would see a 25 percent increase in rates, mainly because of benefit changes, the new rules for rates for women and older people, and taxes.
The company did not calculate any total statewide figures for premium changes, or an average figure, but King said it expected 70 percent of its customers would see premiums rise.
King said the premium estimates did not look at the impact on Anthem's profits.
For the first six months of the year, the company's Virginia profit rose 12.5 percent to $191.4 million from last year, according to the company's most recent filings with the State Corporation Commission's Bureau of Insurance. That's equivalent to 46 percent of the company's net worth, and a higher return on equity than all but one of the companies in the Dow Jones industrial average.
Contact David Ress at (804) 649-6051 or
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Reader Reactions
rvaman, the bottom line is the status quo is unsustainable. Insurance companies, even at your measly 3.5% profit, are nothing more than a money sucking middleman whose single goal is to maximize profits.
Translation: “I’m a typical Leftist, who can’t argue from the FACTS, only from FALLACIES (i.e. appeals to emotion, ad hominem, red herrings, etc.). Don’t bother me with numbers, laws, historical data, and all that other mumbo-jumbo. I don’t care! It’s what I “feel”!“
rvaman, the bottom line is the status quo is unsustainable. Insurance companies, even at your measly 3.5% profit, are nothing more than a money sucking middleman whose single goal is to maximize profits.
And to those who are against “socialized health care” - we already have it. It’s called indigent care; the most expensive type there is. It’s time to fix this horrible system we have, cut the fat out of the middle and make health care affordable to all citizens.
So, to me I see no plan. Not enough detail.
There’s a link to the plan itself…in the very first sentence:
http://www.cbo.gov/ftpdocs/107xx/doc10705/hr3962amendmentBoehner.pdf
rvaman: your logic makes no sense. I’m sure my boss would be happy to pay me less than what 1. they are willing to pay; 2. what the market says my job is worth.
I’m sure he would too. Have you asked him to do so?
No?
Then why would you expect anyone else to?
Get the point now?
Poor reasoning skills, typical of the brain-dead rightist.
See above, where I thoroughly demonstrate your poor reasoning skills…as well as your poor reading comprehension skills.
rvaman is typical of those who think insurance companies bilking the public for every penny they can is just peachy keen; it’s just capitalism at it’s finest.
Explain how “bilking” leads to a 3.5% profit margin.
Eliminating state line restrictions won’t solve a thing…
The Congressional Budget Office disagrees with you.
Care to list your credentials that make you a more qualified expert to speak to the matter?
The right answer is get rid of insurance companies entirely and go to a single payer co-op.
Really? Then do you care to explain this:
http://www.heritage.org/Press/ALAChart/images/011/ALC_011_2col_c.pdf
For nearly twenty years, govt has been been providing an ever-increasing share of health care services while private insurance’s share declines…AND YET…prices continue to rise.
Weird.
Here’s a nice illustration of the cost-curve of govt entitlements:
Funny…I must be missing the savings. Oh well, I guess it will be kicking in sometime after 2050, when nearly $1 out of every $5 that the entire US economy creates in year will be used to pay for just Social Security, Medicare, and Medicaid. And that’s not counting the skyrocketing costs that will be incurred by your “cost-saving” single payer system. Nor is it counting the fact that nearly 20% of every dollar collected by the federal govt will be going to paying just the interest on the debt.
rvaman is typical of those who think insurance companies bilking the public for every penny they can is just peachy keen; it’s just capitalism at it’s finest.
Eliminating state line restrictions won’t solve a thing; actually will make matters worse with more competition. Obama himself is wrong about this. Why? Because insurers with larger customer pools can negotiate a better rate with hospitals than those with smaller numbers; the smaller companies get squeezed out and end up dropping the insured who paid so much. The right answer is get rid of insurance companies entirely and go to a single payer co-op.
The status quo is not sustainable.
rvaman: your logic makes no sense. I’m sure my boss would be happy to pay me less than what 1. they are willing to pay; 2. what the market says my job is worth.
Poor reasoning skills, typical of the brain-dead rightist. Stop drinking the kool-aid, Greg and Rush have spiked it with their bodily fluids.
That said, I think the Republican plan has some merits—I say both sides give it a chance; and if it doesn’t reach certain benchmarks in terms of coverage and cost within 2 years, then they have to shut up and agree to implement some version of a public option.
rvaman:
that link gives no information to me on where 68 billion in reduction is coming from, well they give a list but no proof with the statements.
So, to me I see no plan. Not enough detail.
Analysis of the Republican plan by the Congressional Budget Office:
rvaman, that 3.5% margin is after paying millions of insurance workers…
Source that claim.
...and after expenses…
How novel! A business has expenses!
and of course bonuses ($38.125 million to Aetna CEO alone).
Which is agreed to buy the shareholders and executive boards…the same as in every other industry. And the actual dollars a particular company brings in, the higher such bonuses are.
Doctors waste 25% of their staff’s time on filling out complex insurance forms…
And the vast majority of those forms are required by insurance companies in order to be in compliance with GOVT REGULATION in the first place.
each different for each insurance company.
Thank the govt for that as well, since companies aren’t allowed to sell insurance across state lines. Get rid of that stupid law, watch the majority of those companies go away.
Billions of dollars are wasted; not a cent of which goes to actually making someone healthy.
You just described Medicare and Medicaid perfectly…which are far more wasteful than private insurers.
You obviously have something to lose if this leech is shut down. Which insurance company do you work for?
Nice red herring. Typical of a brain-dead Leftist.
What’s YOUR plan?
<a >Right here.</a>
Note the actual SAVINGS. And DEFICIT REDUCTION.
Next.
rvaman: Maybe if the insurance industry’s collective upper management took in a few million less in bonuses, and the companies spent less lobbying Congress, their profit margins would go up some.
Come back and tell us all when you march into your bosses office and demand less pay than 1) your employer is willing to pay and 2) the market says your job is worth.
rvaman: Maybe if the insurance industry’s collective upper management took in a few million less in bonuses, and the companies spent less lobbying Congress, their profit margins would go up some.
‘double-digit rate increases’ So what? I got one this year. I am not a supporter of a government plan, but unless someone can make a case and present legislation to reign in this kind of foolishness, then people are going to be stampeded into supporting a government plan. Republicans, do you hear me? What’s YOUR plan?
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