America’s Health Insurance Plans commissioned consulting firm Oliver Wyman to make some predictions about what will happen to health insurance once the Affordable Care Act is implemented. According to the report, premiums are going to increase, because health insurers are going to build into premiums the costs of new taxes that are being levied against them by the ACA. Meghan McCarthy has the story here. T
his isn’t really news in the sense that it was most certainly anticipated, but it does raise an important question: Will the people stand for it? We’ve seen the popular backlash that occurred with managed care in the 1990s, and we’re watching similar opposition unfold with the Occupy Movement and the displeasure being voiced over large banks charging fees for debit card use. There’s no reason that people shouldn’t vote with their feet if their insurer threatens to pass the tax on to the consumer. An insurer that opted not to do so would win favor among the people.
Unfortunately, most of our coverage is obtained through the group market. Collective action could stop the practice, but a handful of dissenters would likely find themselves faced with a choice: Pay the increased premium or lose your coverage. Hopefully the provision of the ACA requiring that 80 to 85 percent of premiums collected are spent to cover medical claims will keep this sort of behavior in check, but if this teaches us one thing it’s this: Insurance companies exist for the sole purpose of making as much money as possible. The question is: What do they do to earn it?