President’s Remarks on Lower Premiums
If you’re watching the President’s remarks now, he just claimed that Medicare Advantage rates will go down next year. What he did not point out was that “the core benefit package will cost seniors an extra $13 per month,” according to an article in this morning’s Wall Street Journal. In other words, while premiums may go down slightly, co-payments and deductibles will go up.
The President also claimed that refunds being distributed in North Carolina are a sign the law is working. In reality, however, as yesterday’s this morning’s Politico Pulse explained, the refunds are being granted only because the Blue Cross policies will end in 2014 as a result of the health care law. Insurers generally pre-fund a portion of claims costs expected over the lifetime of a policy (i.e., applicants pay more in Year 1 so they will pay less in Year 5 or Year 10). But because the health law unexpectedly shortened the time horizon of some individual policies to end in 2014, the pre-funding mechanism Blue Cross had in place will no longer be needed, resulting in the refunds. (An article from Inside Health Policy explains this issue.) In other words, “If you like your current coverage, you won’t be able to keep it – but you’ll get some of your money back.”