Consumers should brace themselves for increasing costs of yet another key component of most families’ budgets: the price of health insurance premiums. Even if Congress can’t get its act together to extend coronavirus pandemic-related subsidies for millions of Americans covered under Obamacare, insurers in individual marketplaces across 13 states and Washington, D.C., are looking to raise rates an average of 10% next year.
Those are the annual findings of the Kaiser Family Foundation, which scrutinized preliminary rate submissions for Affordable Care Act policies sold on public marketplaces in the District of Columbia, Georgia, Indiana, Iowa, Kentucky, Maryland, Michigan, Minnesota, New York, Oregon, Rhode Island, Texas, Vermont, and Washington state, the AP reported.
The foundation offered a key footnote to its early warning about spikes in the cost of health coverage, which for several years now had remained low:
“As these rates are preliminary and we do not yet have data for every state, the actual average percent increase in premiums will not be known until early fall. It is also the case that the overall average increase in premiums is often different from the average increase in the benchmark silver plan, which is the basis for calculating subsidies for Marketplace enrollees.”
Still, if early indicators hold true, two factors will be big drivers in the spike in health insurance costs: that familiar menace of inflation, or the forecast of “rising prices paid to providers and pharmaceutical companies.” The other cause: what experts call “utilization” changes.
As Larry Levitt, executive vice president for health policy with the Kaiser Family Foundation, explained this issue to the AP:
“We’re at a point in the pandemic where people are using health care that they may have put off before. We have a double whammy right now of people using more care and inflation throughout the economy.”
So, in case anyone may have missed recent history with the pandemic and the U.S. health system: The system proved costly when the coronavirus slammed it and patients stayed away from all but emergency treatment. Taxpayers forked over billions of dollars in emergency pandemic aid to keep the system afloat, pushing U.S. health spending to new records. Now, as patients return to more ordinary and regular dealings with the system, it again is extracting a lot from regular folks’ wallets — for the very reason that they are getting care. Got it?
It’s fat city at the top in U.S. health care
If the prospect of spiking coverage costs, combined with spiraling medical debt, are not enough cause to make U.S. patients and their loved ones apoplectic enough, would it be too much more to take in a new, deep dive by Stat, a science and medical news site, into CEO pay in the industry? Alas, much of the reporting rests behind a paywall. But the site provides this information:
“Health care’s top executives sat comfortably atop their perch during the second year of the pandemic, cushioned more than ever by the rising fortunes of their stock ownership. The CEOS of approximately 300 health care companies collectively took home more than $4.1 billion in 2021, according to a Stat analysis of hundreds of financial filings.”
Stat reporter Bob Herman, in a separate story that is publicly visible, fills in a few details about health care’s big rollers raking in Brobdingnagian bucks:
“There were a lot of massive pay packages [in the information Stat reviewed], but none was bigger than the $453 million haul by Regeneron Pharmaceuticals CEO Leonard Schleifer. That’s the equivalent of almost 100 private business jets. The analysis focused on publicly traded companies (we can get new, crisp images of distant galaxies, but we apparently can’t have an up-to-date central database of tax filings for nonprofit hospitals and insurers). Some of the main findings: CEOs made an average of $15.3 million last year, while the median was around $7 million. Importantly, more than 80% of the overall group’s compensation came from the actual realized gains of stock awards and options. Compensation stories are more than gawking at the wealth of powerful people. They are a reminder of the incentives of the health care system, the end game for attaining that wealth: Sell more drugs, open more facilities, perform more procedures, adopt more technology, document more medical codes, raise more prices, conduct more mergers — do more, often in service of the stock price.”
The Daily Caller peers behind the Stat paywall to provide context about the have and have-not world of health care pay, repeating this reporting on the front-line care providers, their valiant struggles during the pandemic, and the far lower compensation they receive:
“Health care workers weren’t so fortunate [as their chiefs]. Average household income in the U.S. is just shy of $70,000 per year, and although it’s higher among health care workers, it’s still dwarfed by CEO pay. For example, the median salary of Regeneron employees was about $150,000 per year, according to Stat. The median provider salary at a sampling of 27 health care companies examined by Stat was even worse, coming in at around $45,000 annually.”
In my practice, I see not only the harms that patients suffer while seeking medical services, but also their struggles to access and afford safe, efficient, and excellent health care. This has become an ordeal due to the cost, complexity, and uncertainty of treatments and prescription medications, too many of which turn out to be dangerous drugs.
Health insurance is a necessity for people to protect not only their well-being but also to safeguard their financial health. Coverage allows patients — all of us who are one devastating illness or injury from calamity — to share bankrupting costs and risks in a welcome and collective altruism. Under the current system, the insurance itself is key because it, for example, unlocks significantly better rates for therapies because insurers negotiate better rates with doctors, hospitals, labs, and other providers. The uninsured get gouged for the highest rates, even though they are least able to pay — and providers don’t do much to let them know they might qualify for charitable care at lower costs.
The benefits of coverage, of course, have been eroded by not only policy costs but also by employers, for example, offering workers a diabolical deal: As health costs have risen, companies have shoved greater insurance costs on to workers, who then must choose between higher or lower monthly premiums but also higher deductibles (out pocket expenses they must pay before their insurance kicks in). Skyrocketing premiums and deductibles have put health coverage further out of reach for too many, while medical debt also is growing as a shame of our health care system.
The midterm elections will be in full swing, imminently, meaning that Congress — already deeply riven and doing all too little now, frankly — will be paralyzed. Lawmakers are grinding away at legislative legerdemain that could extend the pandemic’s more generous financial support of the poor, working poor, and middle-class who reply on Obamacare for coverage. Republicans and a stubborn few Democrats — um, Joe and Krysten — could send the country into the midterms, confronting the reality that record numbers of Americans who have gotten coverage under the ACA would struggle to afford their policies or even lose them.
We have much work to do to ensure that health care is a right not a privilege in this country, and that it is safe, affordable, accessible, effective, and excellent.
