Scoreboard Update: The Pro-Reform Team Pulls Ahead


The Affordable Care Act survived another constitutional challenge yesterday, this time in the state of Washington. Judge Gladys Kessler dismissed a lawsuit brought in June that claimed that the individual mandate was unconstitutional. Kessler is quoted in her 64 page opinion:

“The individual decision to forgo health insurance, when considered in the aggregate, leads to substantially higher insurance premiums for those other individuals who do obtain coverage,” Kessler wrote. “Thus, the aggregate effect on interstate commerce of the decisions of individuals to forgo insurance is very substantial.”

This case makes the score 3-2 in favor of the ACA. It’s still early and remember what Yogi said, “It ain’t over ’til it’s over”. Keep checking back for more HCR updates.

Health Insurance Rate Expectations for 2011 UPDATED


Back in September, I predicted that health insurance rates for 2011 would see approximately the same amount of growth as they did in 2010, just under 15% (14.8% was my prediction). Really going out on a limb, right? For the last 4 years the average national health insurance increase has been in the double digits and averaged 10.3%, while last year we saw increases locally in the 15-20% range.

Well now there is a new report out compiled by Weiss Ratings (an independent rating agency) showing that health insurers saw total national medical expenditures decrease by 1.6% for the first nine months of 2010. This report corroborates what we were hearing earlier about utilization.  That 1.6%  represents a $3.7 Billion decrease from 2009. Based on the current trend, Weiss expects expenses for the entire year will decline as much as $9.8 Billion or around 3% from 2009. This is great news for most insurance companies as it means that they collected much more in premium than they paid out in claims which means that they’ve seen their profits increase greatly this year. And it’s already reflected in their stock prices. As a group, health insurers paid out only 71% of premiums on medical costs. In other words, they had a Medical Loss Ratio (MLR) of 71%. Under the new health care reform law, insurers will be required to have an MLR of 80% for small groups and 85% for large groups or pay policy holders a refund. Unfortunately, that portion of the law doesn’t take effect until 2011, so no soup for you!

Hopefully, insurance companies will pass along at least a portion of these savings onto their customers. Based on the above info and the scrutiny that insurance companies have been facing over the last year due to the new law, I am expecting insurance companies to reduce their increases fairly substantially from my earlier prediction of 14.8%. My new prediction is that we will see increases in the 5-7% range with my exact prediction coming in at 6.4%. That’s right! We’re still going to see increases (due to medical inflation and higher utilization as the unemployed return to the work force) but they will be in the mid-single digits, which will practically feel like a rate cut once employers tweak their medical plans. Again, this is a prediction based on the average increase for all insurance companies around the country. Locally, some businesses may actually see REAL decreases (maybe a percent or two).

Grandma Gives Birth to Her Grandson


Okay, this has nothing to do with insurance or health care. At least not directly. But it’s a fascinating story and I have to share it. Last week, in Chicago, a 61-year-old woman gave birth to her own grandson. She served as a surrogate for her daughter who had trouble conceiving. According to the story:

Childbirth remains a rare event for post-menopausal women, but the number of such births has risen in recent years due to wider use of in vitro fertilization and other assisted reproductive technologies. According to state health department records, the oldest woman to give birth in Illinois was 58 when she had her baby in 2006. But data on births after 2008 are not yet available.

Now, a couple of questions spring to my mind right away. First, I was curious to know whether she was the oldest woman to ever give birth? Turns out, no. In India, there are two women who were age 70 when they gave birth. One of them gave birth to twins!

Okay, second question. Was the delivery covered by the grandmother’s insurance policy? Hopefully she had insurance — she’s too young for Medicare. If so, I wouldn’t be surprised if the insurance company denied it the first time it got  processed. Grandma better get ready to make a few phone calls to explain this one.

In any case, best of luck to Grandma, baby and the new mom and dad!

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