It’s not hard to be skeptical about some of the claims we hear from the Department of Health and Human Services about the Patient Protection and Affordable Care Act, especially on questions about whether the exchanges will be ready in a couple weeks or so.
Last week, we heard something that left many of us with even deeper doubts about whether we’re being fed a bunch of hooey.
A report released by HHS said 6.8 million consumers had saved an estimated $1.2 billion on health insurance premiums in 2012.
Wow, that's incredible, right? As in, not credible, perhaps.
This happened, according to HHS, thanks to the rate-review provisions of the PPACA.
Under these provisions, carriers are supposed to submit for review and justify any proposed health insurance premium increase of 10 percent or more.
In her latest canned offering, HHS Secretary Kathleen Sebelius was quoted saying, “thanks to the health care law, we are seeing that holding insurance companies accountable is leading to increased competition and saving billions of dollars for consumers across the country.”
Holding carriers accountable? Let’s remember, please, the law allows federal officials to question certain premium rate hike proposals, but they can’t stop carriers from implementing them anyway.
In any case, Sebelius continues with a prediction that has a very good chance of blowing up.
“This type of competition and transparency,” she said, “will continue in the health insurance marketplace, or exchanges, where Americans will be able to shop for and compare plans side-by-side to find the one that fits their needs and budget.”
If true, all of this sounds good, right? Especially if you’re an employer straining to cover the costs of your employees’ ever-climbing premiums.
As anyone in the employee benefits business knows, this is a critical time for HHS. With just days left before the exchanges open for enrollment on Oct. 1, we shouldn’t be surprised to see HHS highlight what sound like positive results.
Given all that’s at stake, I thought it might be a good idea to ask just how HHS came up with these figures.
Here’s what I found in the methodology notes in the report on which HHS based its press release. (By the way, wading through the next few paragraphs is going to take your full focus, but I think it is best you hear this in the government’s words, not mine).
“For 2012, rate filings with a limited number of covered lives were submitted in five out of 43 states in the individual market and two out of 37 states in the small group market, and thus were excluded from the analysis.
“Rate filings that combined small and large groups were not included in the analysis because the rate changes and covered lives specific to the small groups are not always available. …
“(The Office of the Assistant Secretary for Planning and Evaluation) manually cleaned the data to correct rate filings that were out of scope, or contained similar or duplicative entries, missing or incomplete filings, or incorrect data on requested and/or approved rate changes. ASPE then compared the cleaned … data with an ASPE database of individual market rate changes for 15 states (available from state websites).
“After revising the Rate Review Grant data for incomplete or incorrect data and comparing the RRG data with the ASPE database, 7.5 percent of rate filings for individual policies were revised, which affected 26.6 percent of total covered lives.
“ASPE does not have a database for small group rate increases but checked available data on several state websites for rate filings that had unusual entries. After cleaning the RRG data, 11.3 percent of rate filings for small group policies were revised, which affected 23.7 percent of total covered lives.”
Look, I’m no statistician, but I don’t think you need a mathematics degree to question a figure based on as much manipulated and perhaps seriously compromised data as what these guys were looking at.
If that doesn’t leave you wondering, then consider the small acknowledgement by the ASPE team itself at the bottom of the report.
“A limitation to this method for estimating savings by state is that it assumes that each affected enrollee in these plans paid the statewide average premium, which may not be likely when small numbers of enrollees are affected. Another limitation is that the savings are applied to a full year of premiums, even though many rate increases go into effect mid-year.”