No, Your Insurance Premiums Are Not Going To Skyrocket

Journalists report what they hear but often lack the background knowledge to really evaluate the information. This is especially true in health care, where journalists typically do not understand the complexity of the field. This creates great opportunities for those who want to play the ref, such as insurance companies talking about the Affordable Care Act. This is seen in a story at The Hill today claiming Obamacare premiums will skyrocket.

We have seen many other predictions of terrible things happening and they universally have failed to occur. Even the IT problems with the opening of the exchanges were quickly fixed. This falls into the same category, but of course conservative bloggers who prefer articles which reinforce their biases over facts have spent the day repeating it. When conservatives gloat over such claims, keep in mind that they are partially responsible for any future rate increases by putting out a misinformation campaign designed to dissuade people from signing up–including campaigns outright saying not to sign up.

It is always best to avoid panic with articles such as this. When predictions are made it would be best to simply wait until later in the year to see what happens, but obviously that doesn’t fit in with life in the blogosphere. At least wait a few hours as more information comes in. After the story began to spread, Ed Kilgore responded with a good take on this:

I’m sure many of you saw a certain headline from The Hill today: “O-Care premiums to skyrocket.” At first I thought the source was The Drudge Report.

If you actually read the accompanying article by Elise Vieback, the rather alarming assertion is mostly a collection of blind quotes from “health industry officials.” Yes, one former Cigna executive went on the record to say his “gut” tells him premiums could go up, which is of course very convincing. Otherwise the closest Vieback gets to attribution is an “insurance official who hails from a populous swing state.”

In an updated version of the article, Vieback does quote by name two experts—who deny the whole premise of her story.

And the “premiums to skyrocket” claim directly contradicts a variety of on-the-record assessments by health insurance executives—e.g., Aetna CEO Mark Bertolini, Wellpoint president Joe Swedish, and Cigna CEO David Cordani—that the Obamacare premium structure is working out relatively well. And the most reliable independent study, from the Kaiser Family Foundation, concluded that the much-feared “death spiral” of premiums that Vieback seems to be predicting as a reality for much of the country is very unlikely to occur.

Particularly in its revised form, Vieback’s piece has a number of “to be sure” qualifiers that undermine the headline. But it’s the headline that will get big coverage today—to be sure—maybe on Drudge Report itself. And it’s pretty clear which political constituency is driving the “story.”

I further discussed the reasons why the conservative death spiral scenario is not realistic last month, including quoting from the Kaiser report mentioned by Kilgore.

We also have to keep in mind the fact that double digit increases annually were common in the past in the individual market so there might be increases which are not out of line with past events. I once even had to change policies because of a tremendous jump in rates. I was able to find alternative coverage, but that is not true of everyone who lost their coverage in the days before the Affordable Care Act.

The insurance companies also do have a legitimate concern here, even if they are playing the refs with scare stories. They have to make predictions a year ahead of time as to what their costs will be to set premium rates. It was understandable that Obama gave into political pressures and made changes in the Affordable Care Act, but this also does make it harder for insurance companies to predict future costs. Allowing people to keep their old junk policies longer does adversely affect their calculations. The changes made will probably result in higher rates for legitimate reasons–but most likely much, much smaller than this article makes it sound.

Update: Even though it is posted at The Hill, it looks like this article might be considered just another piece of unsubstantiated garbage from the right wing noise machine. Elise Viebeck, writer of the article, did an internship at the right wing National Review.

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