The White House has accused WellPoint Inc. of “cherry picking certain policies and ignoring major aspects of reform” in a collection of analyses of how health reform might affect some of the states it serves.
WellPoint, Indianapolis, (NYSE:WLP) has developed impact analyses for 14 states where it is especially active.
WellPoint analysts focused mainly on the effects of provisions such as bans on medical underwriting and increases in health care and health plan fees and taxes.
“There are other elements in health care reform that may, over the long-term, have a lesser and indirect impact on premiums in the private market that are not specified in this analysis,” WellPoint says in the summary of results for Missouri.
But, unless Congress makes sure that all people, and especially young, healthy people, really have to own health insurance, the underwriting rule changes and the new fees will affect premiums in ways that “will exceed any aggregate savings that can potentially be achieved through other elements of proposed legislation,” WellPoint says.
Having individuals and small groups buy subsidized coverage through an insurance exchange might, for example, reduce insurance company administrative costs, but “the assessment to fund the exchange would roughly offset any reduction in insurer administrative costs,” WellPoint says.
In Missouri, for example, average health premiums likely would fall 11% for older, sicker individuals, and 26% for small employers with older, sicker employees, but average premiums would increase 122% for typical individuals and 18% for typical small employers, WellPoint says.
Government subsidies would affect the rates that individuals actually pay.
In a post-reform world, a 60-year-old couple with health problems and an annual income of 150% to 200% of federal poverty level might pay just $178 per month for coverage, or 77% less than under pre-reform rules.
If the couple had an income of 300% to 350% of the federal poverty level, it would pay $672 per month for coverage, or 13% less than under pre-reform rules.