Why Are All Health Insurance Rate Increases 9.9%?

Because a rate increase of 10% or greater will be reviewed under Obama-Care.

A recent report (http://www.buckconsultants.com/portals/0/publications/press-releases/PR-...) has found that across the board the rate increases in 2012 will be just below the threshhold requiring government review. Excerpts:

Buck Consultants, A Xerox Company
April 5, 2012
Small Comfort: Health Care Costs Projected to Increase Less Than 10 Percent, First Time in Decade

Costs for all types of medical plans are expected to increase by 9.9 percent for 2012, according to a survey by Buck Consultants, A Xerox Company (NYSE: XRX).

In a national survey of 129 insurers and administrators, Buck measured the projected average annual increase in employer-provided health care benefit costs. Insurers and administrators providing medical trends for the survey cover a total of approximately 109 million people.

Health insurers use trend factors to calculate premium rates, and large self-funded employers use these trend factors to budget their future health care costs.

Buck’s National Health Care Trend - 24th Survey

9.9% - Preferred Provider Organization (PPO)

9.9% - Point-of-service (POS)

9.9% - Health Maintenance Organization (HMO)

9.9% - High Deductible Health Plan (HDHP)

This was an entirely predictable phenomenon, as Dr. Don McCanne has demonstrated by his comment a couple of years ago (find it here: http://www.pnhp.org/news/2010/december/is-hhs-serious-about-controlling-...). Excerpt:

PNHP
December 21, 2010
Is HHS serious about controlling insurance premiums?
Quote of the Day comment by Don McCanne

As far as setting a threshold for selecting the level of unreasonable premium increases which would be reviewed, Health and Human Services (HHS) has decided that plans with less than 10 percent premium increases would not be reviewed. That is a level well in excess of measures of medical cost inflation. Imagine compounded premium increases of 9.99 percent per year on top of premiums that are already unaffordable.

My comment:

The unintended consequences of Obama-Care are piling up. We cannot fix the problem of exploding health care costs by propping up the health insurance business model, including allowing them unfettered rate increases of just less than 10% each year. The health insurance business model is the problem in American health care, it can not be the solution.

Dr. Joe Jarvis