Fox News used a flawed study to falsely claim that the Affordable Care Act (ACA) will increase health insurance market premiums by 88 percent in the state of Ohio, ignoring the counter effect of the premium tax credit subsidy and deceptively suggesting that premium increases will affect the state's entire population.
Fox & Friends First Claimed That Health Insurance Premiums Will Increase by 88 Percent in Ohio
Fox Host Heather Childers: “Premiums Are Going To Rise 88 Percent.” On the June 11 edition of Fox & Friends First, host Heather Childers claimed that the ACA will cause Ohio health insurance premiums to increase by 88 percent, citing recent comments from the Ohio Department of Insurance and Ohio Republican Rep. Bill Johnson. [Fox News, 6/11/13]
But The 88 Percent Premium Increase Comes From A “Flawed” Study Hyped By Critic Of The Healthcare Law
Ohio Department Of Insurance Headed By Republican Critic Of Obamacare. The Ohio Department of Insurance, which has hyped the 88 percent figure from a March 2013 Society of Actuaries study is headed by Republican Lt. Lt. Gov. Mary Taylor, a critic of the ACA:
The department is headed by Lt. Gov. Mary Taylor, a Republican critic of the law known widely as Obamacare. She said last week that her department estimates the cost to cover health care insurance will rise an average of 88 percent in Ohio for 2014.
“We have warned of these increases since a state-specific study in 2011 indicated Ohio would be significantly impacted by the ACA,” Taylor said. “The department's initial analysis of the proposed rates show consumers will have fewer choices and pay much higher premiums for their health insurance starting in 2014.” [Cleveland Plain Dealer, 6/8/13]
HHS And Insurance Experts Criticized Society Of Actuaries Study As “Flawed.” Insurance experts and the U.S. Department of Health and Human Services (HHS) argue that the Society of Actuaries report relies on confusing and misleading information to arrive at a “flawed” conclusion:
To compare today's costs for individual policies with those likely in 2014, the state relied on 2013 estimates from the Society of Actuaries, using a study that the U.S. Department of Health and Human Services, or HHS, disputes as flawed.
The Society of Actuaries, based in Illinois, is an independent group serving professionals who measure and manage risk, and says it provided its estimates to help state officials nationwide project costs. CNN reported earlier this year that the society used an insurance company subsidiary to help calculate estimates, but the society stood by its work and said the analysis was reviewed by its membership.
HHS continued its criticism this week and, with other critics, said the state should have used actual 2013 figures rather than those from a study. Outside groups trying to replicate or better understand Taylor's figures said they found it impossible and questioned some of the figures in the study. [Cleveland Plain Dealer, 6/8/13]
New Republic: The 88 Percent Figure Is “Useless.” According to New Republic Senior Editor Jonathan Cohn, the 88 percent figure relies on averages of bids submitted by carriers without considering other key factors, such as varying benefit levels and how many people might enroll in different plans:
By the way, plans like these help explain why the 88 percent figure is so useless. To come up with the figure, the Insurance Department literally took an average of the different bids that carriers submitted. Officials paid no attention to how many people might enroll in different plans, nor did they account for the varying benefit levels. “We don't know how many people buy this coverage today and how many of them actually get the very low premium that is being cited,” says Sarah Lueck, a health policy analyst at the Center on Budget and Policy Priorities who went through the Ohio filings. “I question how valid this is as a basis for comparison.” [The New Republic, 6/11/13]
Only A Fraction Of Ohio Population Will See Increase In Premiums; Many Will See Decrease
Individual Policies Make Up “A Relatively Slim Portion Of The Insurance Market.” The alleged 88 percent increase in premiums will only affect those with individual policies, who made up less than 4 percent of the state's population in 2010. According to a 2011 study by Milliman, Inc, a consulting firm that worked with the Ohio Department of Insurance to estimate the effects of the ACA, only 350,000 out of 10 million Ohioans had individual policies in 2010. The majority of Ohio residents are covered by group plans, which are typically offered by their employers.
[Milliman Inc, 8/31/11]
ACA Will Decrease Premiums For Many At-Risk Groups. The 2011 Milliman study found that although premiums will increase for healthy young men in the individual market, other demographics in the individual market will likely “experience a significant premium decrease.” Moreover, the ACA will lower insurance costs for many low-income households:
In the individual market, a healthy young male (with benefit coverage at the market average actuarial value pre and post-ACA) may experience a rate increase of between 90% and 130%. However, a 60 year old with chronic health conditions may experience a significant premium decrease.
This report estimates that the highest health insurance take-up rates among the currently uninsured will occur for the lowest-income populations, with take-up rates decreasing as household income increases. For low-income households, insurance coverage will be significantly less expensive due to the expansion of Medicaid coverage and the availability of premium and cost-sharing subsidies through the exchange. [Milliman Inc, 8/31/11]
Alleged Premium Increase Ignores Effect Of Premium Tax Credit Subsidy
Healthy, Young People Whose Premiums Will Rise Are Eligible For Tax Credits To Offset Added Costs. The ACA takes into account that premiums will likely rise for young people in the individual insurance market by offering a tax credit subsidy to offset costs:
Most of the young, healthy people whose premiums will rise under President Obama's healthcare law will be eligible for tax credits to help with the added costs, according to a new analysis.
The analysis, released Thursday by the consulting firm Avalere Health, found that two-thirds of young, uninsured adults will be eligible for subsidies under the healthcare law.
In California, which recently released the preliminary rates for plans in its insurance exchange, young people would see a lower-than-expected increase in the cost of the cheapest plan.
Those who receive subsidies from the federal government would often pay even less than they're paying now, and some poor young people might not have to pay a premium at all, California officials said.
Nationwide, two-thirds of uninsured people younger than 30 will be eligible for subsidies, Avalere said. Overall, 46 percent of all uninsured people will likely qualify for some level of subsidy. [The Hill, 6/6/13]