Highmark CEO: Health-care law to raise costs most for small businesses, self-insured
Health insurance costs for small businesses and those who buy their own plans could rise dramatically in 2014 when the government fully implements the health care law, Highmark Inc.'s CEO said on Thursday.
William Winkenwerder, who has led the state's largest health insurer since June, said the biggest cost increases likely will affect young healthy people who buy their own insurance.
Premiums for that group could double or triple because of changes under the federal Affordable Care Act, Winkenwerder said during an hourlong news conference at Highmark's Downtown headquarters. The nonprofit Blue Cross Blue Shield company counts 4.9 million members in Pennsylvania, Delaware and West Virginia.
Insurers across the country will raise prices on young, individual insurance buyers and some small businesses because of rules under President Obama's health care reform, such as requirements that the highest premium not be more than three times the cheapest premium and that men not pay less than women, Winkenwerder said. He said women of child-bearing age are more expensive to insure.
Insurers don't have a choice about whether to raise prices, he said. “By my reading of this, we're compelled to do this.”
Winkenwerder said cost increases are “going to be significant” for businesses.
America's Health Insurance Plans, a Washington industry group for the nation's health insurers, released a study on Thursday that said Pennsylvanians will pay about $9 billion more for insurance over 10 years from a tax on premiums that starts in 2014.
“This tax will add a financial burden on Pennsylvania families and small businesses at a time when they can least afford it,” said Karen Ignagni, the group's CEO.
An estimated 30 million uninsured Americans will gain access to health coverage under the law, according to the White House.
The law requires that virtually all Americans have health insurance starting in 2014, whether they get it through an employer or buy it themselves. Known as the individual mandate, the provision will be enforced by the Internal Revenue Service, which will require anyone filing a tax return to prove he or she has coverage.
By 2016, the uninsured will pay a penalty of $695 or 2.5 percent of household income, whichever is greater, according to the Congressional Budget Office, which estimated in September that about 6 million Americans would choose to pay the penalty two years after the mandate takes effect.
Cost increases under the law could be so large for some people that it would be cheaper for them to drop coverage and pay the penalty, Winkenwerder said.
In addition to the increases likely to hit some small businesses and healthy individuals, taxes in the law on medical device and pharmaceutical sales will result in higher premiums, Winkenwerder said.
To combat those costs, he said Highmark is developing insurance products that would allow access only to lower-cost medical providers and give patients more information about costs.
For example, Highmark's Community Blue product, available starting next month, can be up to 25 percent less expensive but doesn't include access to UPMC, the largest health system in Western Pennsylvania.
Winkenwerder declined to talk about Highmark's pending deal to acquire financially-troubled West Penn Allegheny Health System, Pittsburgh's second-largest hospital operator. The two organizations are trying to finalize a deal, which hinges on reducing West Penn Allegheny's $1 billion in debt and pension liabilities, possibly through bankruptcy.
Alex Nixon is a staff writer for Trib Total Media. He can be reached at 412-320-7928 or firstname.lastname@example.org.
Add Alex Nixon to your Google+ circles.
Show commenting policy
TribLive commenting policy
You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.
We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.
While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.
We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers.
We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.
We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.
We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.
We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.
- FDA revises food safety rules due out next year
- Ferrari growth would benefit Fiat
- Alibaba stock soars in frenetic trading debut
- GlaxoSmithKline’s $492M fine is largest in China
- Stocks drift amid Alibaba’s IPO drama
- Chrysler roars back with latest 200
- Parasitic load issue solvable with some probing
- CNG autos slow to make inroads into U.S. market
- Range Resources to pay $4.15M fine, close old gas drilling impoundments
- Chevron gets first OK from Pa. sustainable drilling group
- Pa. unemployment rate rises to 5.8 percent