Insurance 'Premium Rate Shock'
Next year, consumers and small businesses can expect what one health insurance CEO says will be, "Premium rate shock for 2014." As this happens, clinical laboratories and pathology groups are likely to find it even more difficult to collect co-pays, deductibles, and out-of-pocket fees from patients who had medical laboratory tests performed.
The premium rate shock remark was made by no less than Mark Bertolini, the CEO of Aetna, Inc. (NYSE: AET). In his speech at an investor conference, he predicted premiums would rise by 20% to 50% next year before the government subsidies are applied. In some markets, rates could double, he added.
Aetna is not alone in seeking steep hikes in health insurance premiums. Blue Shield of California is seeking a rate increase of 12% to 20% for more than 300,000 individuals, The Los Angeles Times reported. These new rates would go into effect in March, the company said.
The New York Times also published a story on this development, noting that health insurers nationwide are winning double-digit increases in premiums for some customers. "Particularly vulnerable to the high rates are small businesses and people who do not have employer-provided insurance and must buy it on their own," The New York Times reported.
For pathologists and clinical laboratory managers, such increases mean patients may have less money to cover deductibles and co-payments for medical laboratory tests. Labs would then need to invest more time and money in collecting these payments. Also, health premiums are likely to rise sharply for those clinical laboratories that offer health insurance in the small group market.
One reason insurance costs are rising is the requirement under the Affordable Care Act (ACA) that older consumers can be charged no more than three times as much as the youngest consumers, said Robert Laszewski in his blog at Health Policy and Market.
Currently, the underwriting standard is that older consumers are charged about five times more than young adults. Even though these rate bands were narrowed under the ACA, insurers still expect older Americans to have a greater need for healthcare than younger Americans do. Thus, premiums for younger Americans may rise dramatically, Laszewski explained.
Laszewski predicts that individuals can expect a 30% to 40% increase in what they pay for health insurance. That cost includes premiums, deductibles, and copayments. He based this estimate on an informal survey of health insurers he conducted late last year.
READ FULL SOURCE ARTICLE: 03/04/2013
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