Yet more evidence that the rate of increase in health insurance premiums is about to accelerate comes from Scott Fidel of Deutsche Bank, who reports that Federal Employee Health Benefits Program rates “will increase more substantially in 2010 due to higher rates at both the Blues and for-profit MCOs.” FEHBP premiums are a leading indicator of commercial rate trends, Fidel notes.
FEHB premiums will accelerate by 10.4% on average in 2010, the highest average increase by our estimation since 2003. FEHB pricing has historically been a powerful leading indicator of Commercial pricing trends so the double-digit average rate hike could prove to be a material data point relative to forward pricing.
I’ve already reported on the hefty rate increases sought by health plans in the individual market (see prior post). And Buck actuary Harvey Sobel noted back in June (see prior post), “There are signs that we’re going into another cycle of high trends,” with health insurers possibly raising rates in light of the economic downturn, Cobra expansion, mental health parity legislation and potential healthcare reform. All of which suggests that just prior to reforms kicking in (c. 2013), the health insurance industry may be flush once more. Advice to industry: better to cut a deal on reform now rather than later.
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[...] With private insurance pricing their plans below the public option, the public option is the one that gets to control overall prices in the exchange. No other alternative proposed would be able to do this. The latest alternative – allowing people to buy health care from the system members of Congress use – certainly doesn't. The system members of Congress use – called Federal Employee Health Benefit Plan (FEHBP) and run by the Office of Personnel Management (OPM) – has just as much rate inflation as any other insurance market in this country, and is seeing its rates increase by over 10% next year. [...]
[...] With private insurance pricing their plans below the public option, the public option is the one that gets to control overall prices in the exchange. No other alternative proposed would be able to do this. The latest alternative – allowing people to buy health care from the system members of Congress use – certainly doesn’t. The system members of Congress use – called Federal Employee Health Benefit Plan (FEHBP) and run by the Office of Personnel Management (OPM) – has just as much rate inflation as any other insurance market in this country, and is seeing its rates increase by over 10% next year. [...]
[...] With private insurance pricing their plans below the public option, the public option is the one that gets to control overall prices in the exchange. No other alternative proposed would be able to do this. The latest alternative – allowing people to buy health care from the system members of Congress use – certainly doesn't. The system members of Congress use – called Federal Employee Health Benefit Plan (FEHBP) and run by the Office of Personnel Management (OPM) – has just as much rate inflation as any other insurance market in this country, and is seeing its rates increase by over 10% next year. [...]
[...] the “good kind of market” that Klein says is working for well for federal employees – have risen substantially faster than premiums in the private insurance [...]