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Actuaries: Most States Will See Double-Digit Jumps In Individual Claim Costs

03/27/13

  11:01:29 am, by MedBen5   , 246 words,  
Categories: News, Health Plan Management

Actuaries: Most States Will See Double-Digit Jumps In Individual Claim Costs

Ohio is one of many states that could see a huge spike in claim costs for individual health policies – as much as 80%, says a new report by the Society of Actuaries.

According to the Associated Press, financial risk analysts concluded that while some states will experience declines, the overwhelming majority will see double-digit increases in their individual health insurance markets. On average, insurance companies will have to pay out 32% more for medical claims under the Affordable Care Act.

The Obama administration criticized the study, saying that it focuses one just one piece of the puzzle, ignoring tax credits and other cost relief strategies in the law. Increased insurer competition when state exchanges go live on October 1 will also help to reduce insured costs, administration officials said.

Recently retired Medicare chief actuary Rick Foster said the report does “a credible job” of estimating potential enrollment and costs under the law, “without trying to tilt the answers in any particular direction.” He added, however, that the conservative nature of actuaries would make them more apt to focus on a worst-case scenario.

The study did not estimate costs for employer insurance plans, which will not be similarly affected – at least, not directly. But the rise in claim costs will inevitably result in higher individual premiums… which, as the administration pointed out, will be covered in part by tax credits. So while the impact won’t be as immediate, taxpayers will ultimately pay for the cost bumps as well.

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