Health Law Hardly At Fault For Rising Premiums When health insurance companies delivered the bad news this fall about next year's premium increases, many blamed the new health overhaul law. But industry experts say that the health law accounts for only a small part of the increases.
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Health Law Hardly At Fault For Rising Premiums

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Health Law Hardly At Fault For Rising Premiums

Health Law Hardly At Fault For Rising Premiums

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Here in the U.S., businesses and individuals are getting notices from their health insurers about next year's premium rates. A lot of people are getting big increases this year.

NPR's Julie Rovner reports.

JULIE ROVNER: Dan Thystrup makes paddleboats at his small company in North Webster, Indiana. He's been doing it for 20 years. He's also been providing his employees with health insurance during that time.

DAN THYSTRUP: So we thought that was a good way of keeping employees and all that.

ROVNER: But no more. Tystrup cancelled his firm's - including his own - coverage, when he got word that his premiums were going to double. Part of the reason, he said, was that his group has gotten smaller and therefore more expensive to cover. But he was also told that costs were going up because of the new health law.

THYSTRUP: But with all the new regulation that would made it more expensive for insurance companies.

ROVNER: Thystup is far from the only small business whose premium increases are being blamed on the new health law. Celinda Lake runs the Democratic polling firm Lake Research. She appeared on a panel, yesterday, with fellow Democratic poster Stan Greenberg.

CELINDA LAKE: Our premiums have went up 20 percent. Stan's premiums have gone up 20 percent. And my broker told me that it's because of the health insurance reform.

ROVNER: But is it really?

JAY ANGOFF: It would be inaccurate and silly to blame it on the new law.

ROVNER: Jay Angoff oversees the insurance industry for the U.S. Department of Health and Human Services.

ANGOFF: To the extent that insurance companies blame the new law for rate increases, they know better. They've said themselves, that the new law would only raise rates by between one or two percent.

ROVNER: And even those increases, says Angoff, would pay for a number of valuable new benefits.

ANGOFF: They get the assurance that companies will no longer be able to cancel their coverage when they get sick. They get the assurance that there are no lifetime limits. That is, they have the assurance that coverage will be there when they need it. Kids can stay on their parents' policies until they're 26. Kids with pre-existing conditions can get insurance.

ROVNER: But all those benefits, together, still shouldn't drive up premiums by anything close to what some insurers are suggesting, Angoff says. Robert Zirkelbach of the insurance industry trade group America's Health Insurance Plans, concedes that the law isn't the major driver of premium increases for next year.

ROBERT ZIRKELBACH: In fact, the evidence is very clear that the rise in medical costs is a key factor in driving up health insurance premiums.

ROVNER: But Zirkelbach says there are some cases where premiums could rise significantly because of the new benefits the law requires.

ZIRKELBACH: Many people already have the new benefits that are required in the law, as part of their current benefit packages. So they're not going to see near an impact as people who have chosen less comprehensive policies in exchange for a lower monthly premium. So for those people who have less comprehensive benefit packages today, they're going to see a much larger impact in their premium as a result of health care reform.

ROVNER: In other words, if your plan has to add a lot more benefits, you might get a bigger jump in premiums. Insurance industry consultant Bob Laszewski says, for sponsors of the bill, there's both good news and bad news. The good news...

ROBERT LASZEWSKI: The new law is not responsible for any significant price increases. Maybe a couple points.

ROVNER: And the bad news?

LASZEWSKI: We just spent two years of enormous political capital in this country and we pass something called health care reform that isn't going to bring our costs, and therefore our insurance premiums, under control.

ROVNER: HHS's Angoff says there are some provisions of the law that will help control costs. He points to new rules that give states the ability to better examine and even reject proposed premium increases, for example, and a new HHS website that will let consumers compare health insurance prices, head to head. But not many other experts are convinced those things will have much of an effect, or not nearly what's needed, to get prices under control.

Julie Rovner, NPR News, Washington.

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