As one of the state’s largest health insurers, Anthem Blue Cross and Blue Shield in Wisconsin has taken a look at the various health reform proposals in Congress.

The full actuarial report based on Anthem Blue Cross and Blue Shield’s analysis can be found and printed out at the link here. The analysis presents real rates being charged to real individuals and groups now and shows how those rates are generally expected to change for new purchasers post-reform, without any adjustment for the increase in medical costs over time.

Among the report’s findings:

• A healthy 25-year old male in Milwaukee could expect to see up to a 199 percent premium increase;

• A family with two kids and an average health status up to a 122 percent premium increase;

• A 60-year old, less healthy couple up to an 11 percent decrease; and

Small employers would see premium increases or decreases based upon their employee population’s age and health status. For example:

• Younger/healthier group of eight: 53 percent premium increase

• Average age/health group of eight: 17 percent increase

• Older/less healthy group of eight: 11 percent decrease

These results reflect increases directly related to the proposed legislation. What makes this actuarial analysis different is that it uses actual cases, not averages, and specifically includes the impact of subsides on premiums.
Overall, Anthem Blue Cross and Blue Shield actuaries found that the impact of health care reform on insurance premiums in Wisconsin will vary significantly by market, with certain proposed reforms resulting in lower-risk groups facing increased premium costs post-reform and higher-risk individuals and groups facing decreased premium costs post-reform.

Other notable findings in the report include:

A strong individual mandate is central to achieving goals of health reform. Study after study has demonstrated that without an effective individual mandate, traditional guaranteed issue requirements result in the opposite outcome of the goals of health care reform — higher costs, fewer choices, and more people uninsured. Without a strong individual mandate, market reforms will have a direct impact on premiums which will exceed any aggregate savings that can potentially be achieved through other elements of the proposed legislation. If there is not a mandate, younger, typically healthier members of the insured pool will forego coverage and the overall health status of the insurance pool will deteriorate. In turn, this will cause premiums to rise in the employer-sponsored market.

Higher costs for small employers and individuals. Purchasers of average age and average health are expected to face higher premiums post-reform, and approximately 70 percent of small employer purchasers are expected to face higher premiums
post-reform.

Tax on “rich” benefit plans will be felt broadly. Nearly one in every 10 groups would be impacted by the tax in the first year after its introduction. Over 20 percent of small employer groups would be subject to the tax by 2019, with the average impact on their premium a 3.7 percent increase. Furthermore, the Congressional Budget Office estimates this tax will cost employers more than $200 billion from the time it is introduced until 2019.

Healthcare costs in Southeastern Wisconsin still higher than average

The Greater Milwaukee Business Foundation on Health Inc. recently concluded that southeast Wisconsin healthcare commercial premium costs are 9 percent higher than the average cost in the Midwest.

“This is a vast improvement since our study of 2000 data when we were 55 percent higher and the study of 2003 data when we were 39 percent higher than our colleagues in comparable Midwest states,” says Ron Dix, the Foundation’s executive director.

A number of factors are believed to contribute to the higher costs, including a higher average age of patients, the slightly richer plan designs offered by southeast Wisconsin employers and higher provider payments in the region.

In real dollars, total per employer, per year healthcare premium costs in southeastern Wisconsin for 2006 and 2007 (the years examined in the study) averaged $7,946 and $8,204 respectively. In comparison, average Midwestern premium costs were $7,136 and $7,536. Nationally, employers paid average premium costs of $7,002 in 2006 and $7,390 in 2007. For a copy of the complete report, definitions and appendices visit: www.gmbfh.org.

More Featured Articles