By Paul C. Barton, Gannett
WASHINGTON - With less than seven months until President Barack Obama's health care reforms take full effect, Tennessee Republicans in Congress contend steep premium increases, job losses and denial of access to needed care lie in wait for constituents.
But liberal policy analysts say such claims reflect an insurance industry scare campaign and that significantly increased access and more competitive and stable premiums will be the story.
No matter which side proves right, the consequences for the state could be immense.
"Some states are clearly in better shape to implement the act and to assist their residents in getting coverage in a timely fashion than are other states. It could be ripe fodder for election campaigns," said Bruce Oppenheimer, Vanderbilt University political analyst. "And once people start reaping the benefits, it will be near impossible to remove or repeal those benefits."
Making the case for pending rate shock, the state's Republican lawmakers cite projections such as:
• BlueCross-BlueShield of Tennessee, the state's largest insurer, saying premiums will go up an average of 30 percent for individuals and 10 percent for small businesses.
• A Society of Actuaries projection that medical claims costs will go up an average of 46 percent per subscriber in Tennessee and an average of 32 percent per subscriber nationally.
• The American Academy of Actuaries projecting premiums on individual policies for ages 21-29 will increase an average of 42 percent while those for ages 30-39 will increase an average of 31 percent.
• A report from the Republican-controlled House Energy and Commerce Committee - "The Looming Premium Rate Shock" - summarized rates 17 large insurers say they plan to charge in 2014 and projects average premium increases of 96 percent nationwide for new entrants in the individual market and up to 50 percent in the small-business market.
The state's largest insurer, BlueCross-BlueShield, said the law will provide coverage for hundreds of thousands who lack it now.
"We think that's a really good thing," said Roy Vaughn, vice president for corporate communications. "We're going to make sure it works as well as possible for Tennessee."
Rates have been rising.
Advocates for reform say congressional Republicans and insurance companies are distorting what's going to happen by focusing on rates for younger Americans, and not even portraying those accurately. They also say it's unfair to tie recent rate increases to the reform law.
"Health insurance premiums have been going up by double digits for most Americans for years," said Wendell Potter, a former Cigna executive turned industry whistleblower. He said companies routinely raise premiums in part "to ensure a certain profit margin."
They also raise rates, he said, to "purge" small businesses who report significant medical costs among their employees, something the Affordable Care Act would stop.
In a letter to Rep. Marsha Blackburn, R-Brentwood, Potter suggested purging likely was behind the rate increases she cited for small firms in her district. He said he has gotten no response.
Ron Pollack, head of Families USA, a health care advocacy group, called it "a convenient thing" to attribute rate hikes to the act. His group and others say early returns from states that already have set up their own health exchanges or centralized marketplaces - instead of leaving the task to the federal government as Tennessee has - show even more competitiveness in premiums than expected.
Further, they add, rate-shock surveys coming from conservatives and some industry sources feature proposed rates, not those regulators necessarily would approve or that consumers ultimately would pay.
And policies they cite focus on those sold to younger Americans who can't get coverage through an employer or government program, defenders of the health law contend.
"Unfortunately, those tactics are being used again, this time to scare people into believing that their premiums will skyrocket, if we don't perform radical surgery on the the health care law," Potter said.
The entire individual market, he said, involves only about 15 million people out of a U.S. population of 315 million. And he said the proposed rate increases don't account for offsetting federal subsidies, available to those with incomes less than 400 percent of the federal poverty guideline: $45,960 for an individual and $94,200 for a family of four. The subsidies, awarded by the Internal Revenue Service in the form of tax credits, will go directly to the insurers.
As a result, a majority of those 20-29 who buy coverage in the individual market already easily would qualify for either "significant premium credits" or perhaps Medicaid, the federal-state program for the poor, according to the Center on Budget and Policy Priorities.
BlueCross-BlueShield of Tennessee estimates 70 percent of state residents fall under the 400 percent of poverty level line.
For most who take part in the exchange, "their cost of individual coverage will go down," said Vaughn, the BlueCross-BlueShield spokesman.
Only "some relatively small number of people" in the individual market - "the young and healthy who already enjoy the best rate from insurers - are likely to face a higher premium in 2014, the CBPP says.