“RATE SHOCK” Fact or Fiction

Since the passage of the Affordable Care Act one of the principle concerns has been: what will health insurance cost. The potential fallout from high price health insurance has been termed “RATE SHOCK”.

Stakeholders and advocates have voiced concerns over “Rate Shock” from very early on. The CEO of the CT Health Insurance Exchange, Connecticut’s Health Care Advocate and the Deputy Insurance Commissioner have all voiced concerns publically over what impact “Rate Shock” will have once the Exchange is open for business. It has been a discussion at Exchange Board Meetings.

So if “Rate Shock” is a real concern voiced by so many deeply involved in the success of health care reform, then why would the Universal Health Care Foundation of CT characterize “Rate Shock” as a “myth” and “scare tactic” in a recent blog post? Their position defies words and logic.

Their opinion that a “large majority” of the uninsured and underinsured will be eligible for Medicaid or subsidize is correct BUT there is a huge portion of our population that is going to need to buy health insurance with little or no subsidy -- in short they will be buying it retail.

If this portion of our population sees the health insurance options available as too expensive, they could simply opt out of buying coverage at all and just pay the penalty. This would not be good for the overall success of the Exchange and health care reform in general. In short, “Rate Shock” With Maryland’s Exchange just announcing their plans will reflect a 25% price increase, there is no reason to believe Connecticut will be any different.

Should we be “scared”? No.. Should we be informed, educated and involved? Yes.. Should legislation be passed directing the Exchange to use “Active Purchasing” Yes.. Should legislation be passed to adjust the “Medical Loss Ratio”? Yes. Should legislation be passed directing the Exchange to use “secret shoppers to insure we have true “network Adequacy”? Yes.. Should we work to make the best health insurance buying environment possible? Yes. Should we mischaracterize the reality of “Rate Shock” as a “myth” and “scare tactics”? No

Kevin Galvin Small Business For A Healthy Connecticut