August 1, 2013
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Insurance Commissioner Ralph Hudgens' claims about insurance rates are overblown


On Tuesday, Georgia Insurance Commissioner Ralph Hudgens sent a letter to Health and Human Services Secretary Kathleen Sibelius asking her to delay the deadline for approval of the plans to be sold in the Health Insurance Exchange in Georgia. He claims the delay is needed because the plans submitted by the insurance companies who will be participating in the Exchange were too expensive, including some plans showing an increase in premiums of up to 198%. These claims are overblown and do not reflect an accurate picture of the Exchange in Georgia. Here's a look at Commissioner Hudgens' claims and the facts he did not mention:


Claim: Insurance rates in Georgia will rise by up to 198% because of the Affordable Care Act.

Facts: In an article in the Augusta Chronicle, Commissioner Hudgens admitted that the 198% figure was based only on one plan that is no longer available and which had a $5,000 deductible. Such a rock bottom health insurance plan cannot really serve as an accurate comparison to the comprehensive coverage that will be available in the Exchange.

Claim: The Affordable Care Act is causing insurance rates to rise in Georgia

Facts: The health insurance plans offered in the new Exchange will not affect the majority of insured Georgians who already have health insurance through their employer. Georgians who have not been able to purchase insurance previously because of a pre-existing condition will now be able to do so. Figures reported in today's Atlanta Journal Constitution show that the average rate for an Exchange plan in Georgia will be about $300. Even with some regional disparities rates will still be more affordable than most plans in the current individual market. Furthermore, individuals with an annual income of $48,000 or less and families of four with an annual income of $94,000 or less will be eligible for subsidies in the Exchange that will make their premiums significantly more affordable. Finally, it's important to keep in mind that insurance companies want people to enroll in these plans, adding a further incentive for them to keep rates reasonable.

Claim: Insurance rates for young people are going to double because of the Affordable Care Act

Facts: Some young and healthy people will see a rise in their insurance rates, because the coverage in the Exchange plans is more comprehensive than most insurance available in the current individual market. However, those increases will be offset by premium subsidies available to the majority of young people who are making entry level wages. Furthermore, people under 30 years old who do not want comprehensive coverage will be able to purchase low-cost catastrophic coverage that will satisfy the mandate that all Americans purchase health insurance. And young people under 26 can remain on their parents' plans. Thus, young people will actually have several affordable options.


Two insurance companies pull out of Georgia's Health Insurance Exchange

Aetna and Coventry announced late last night that they will be pulling out of Georgia's Health Insurance Exchange. Georgia's Exchange will open for enrollment on October 1 and will now have five companies offering competing plans: Alliant, Blue Cross and Blue Shield, Humana, Kaiser Permanente and Peach State.  Look to future issues of the Health Watcher for updates as more information becomes available.


Update on employer mandate implementation delay

In the last issue of the Health Watcher, we reported on the federal government's decision to delay enforcement of the employer mandate for one year. In a recent report by the Congressional Budget Office, that delay is expected to cost taxpayers $12 billion and leave one million fewer Americans with health insurance than had been expected. Although the reasoning behind the delay is to give more businesses time to prepare for compliance, it is clear that postponing enforcement has serious negative consequences. It is therefore crucial that the Administration and Congress work together with private businesses over the next year to resolve all remaining issues in order to avoid further delays in the implementation of this important part of the law.