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In reply to the discussion: Obama says Sanders' supporters helped undermine Obamacare [View all]pnwmom
(109,035 posts)Romneycare was actually working out well in MA, after some initial bumps.
http://www.factcheck.org/2011/03/romneycare-facts-and-falsehoods/
What Happened to Premiums?
Claim: Premium costs increased.
One of the main claims Republicans make about the federal law is that it will drive up premiums. (In fact, as weve often noted, the Congressional Budget Office predicts the federal law wont have a significant impact on premiums for most people.) But what has actually happened in Massachusetts?
The truth about premiums is that theyve gone down for those who buy their own insurance (in what had been the so-called individual market), and the health care law is given credit for several reasons. And while premiums have gone up for large employers who buy coverage for their workers (the so-called large group market), theres no clear evidence that the law was the cause. As we mentioned, the law attempted little cost control, and Massachusetts premiums, and those nationwide, have been rising for years before the law was passed. The law has had one clearly negative impact on small businesses who bought coverage in the small group market. Their premiums have risen faster than before, a small part of which can be attributed to the laws workings. This has been a major disappointment because small businesses had been hoping for a decrease.
Lets start with the individual and small group markets: After the law was passed, the state merged these markets, which benefited individual rates and hurt small business rates. Its simply a matter of a less-healthy risk pool getting a boost from a more well-rounded risk pool. The worst risk pool is the individual risk pool all by itself, explains Brandeis Doonan. If you add the small group market to that, its better for individuals and worse for small business.
How much did that raise premiums? Its not clear. One prediction, cited in a report conducted for the state Division of Insurance, estimated a 1.0 percent to 1.5 percent impact, but theres not good information on what exactly the impact turned out to be. Jon B. Hurst, president of the Retailers Association of Massachusetts, told us: It was a factor. But, I dont know that theres any one major silver bullet for increasing premium costs.
SNIP
The individual market, meanwhile the one MITs Gruber had called deeply broken saw a major drop in premiums, as much as a 40 percent decline, according to some figures. The individual market itself more than doubled in size, says Gruber. Young, healthy people came into the market and bought less generous (hence, cheaper) plans than the sicker individuals who had been in that guaranteed issue market. The typical nongroup market in the country has people buying really crappy products, Gruber says. But in Massachusetts, the opposite was true the sick were buying good products. With the health care law and the individual mandate, people were buying down, says Gruber, not buying up.
Premiums would show a smaller drop if adjusted for the less generous average policy, he says. But however you want to look at it, premiums went down. Lets compare what people in the pre-merger individual market spent per person per month for a premium in 2006 and what those in the post-merger market spent in 2008. Those numbers went from $437 to $360, an 18 percent decrease. (See page 103 of this Division of Health Care Finance and Policy report.)