What drives insurance premium costs? It’s not what you think.

Before the House GOP health care bill to repeal and replace the Affordable Care Act stalled, there was some discussion by lawmakers to repeal the “essential health benefits.”  These were mandatory requirements created by the Affordable Care Act that most insurance plans must offer 10 specific categories of coverage, including things like prescription drug coverage and maternity care.  When the news leaked, it caused quite a stir – particularly among the political left but also among moderate Republicans.  Remember the outrage when a lawmaker suggested that men shouldn’t have to pay for maternity care?

Many attribute the demands of the House Freedom Caucus to pull the essential health benefits as the reason the bill stalled.  The reason they want the cut the benefits? Rising insurance premiums.

The Freedom Caucus has been pushing for those benefits to be removed because they believe that the coverage guarantees were largely responsible for driving up the price of health insurance.

So the question is whether these benefits actually drive increases in premiums, and whether eliminating them would actually bring premiums down.  The answer is pretty simple.

The true drivers of health insurance costs are hospital care, doctors visits, and prescription drugs.  Things like maternity care, substance abuse, and mental health treatment have a marginal impact on premiums.

As John Bertko, an actuary who worked in the Obama administration and served on the board of Massachusetts’ health exchange, put it: if you want cheaper insurance premiums, “you would either have very crappy benefits without drugs or physicians or hospitalization, or you would have roughly the same costs.”  Maternity care, mental health and substance abuse, “are probably less than 5 percent” of premium costs.

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About justgngr

the ramblings of a medical professional by day, judgmental ginger by night
This entry was posted in health policy, medicine, politics and tagged , , , . Bookmark the permalink.

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