Cumberland Times-News

March 26, 2013

Study has flaws, says Md. official

brian witte
Cumberland Times-News

— ANNAPOLIS — Medical claims costs in Maryland could jump 67 percent for residents’ individual policies by 2017 under the federal health care overhaul, according to a study released Tuesday by the nation’s leading group of financial risk analysts. But a Maryland official said the study is flawed, because it doesn’t consider state-level policy decisions that will have a big impact on costs.

The increase cited in a report released Tuesday by the Society of Actuaries said much of the reason for the higher claims costs is that sicker people are expected to join the pool. The projected 67 percent increase is included in a hypothetical scenario in which all states decide to expand Medicaid under the overhaul.

The greater costs could mean higher insurance premiums for residents who will buy individual policies through Maryland’s health benefit exchange. The report did not project medical claim costs for employer-sponsored plans, which cover the majority of workers

But a Maryland official said the report used a one-size-fits-all-approach that skews what actual costs will be. Carolyn Quattrocki, executive director of the Governor’s Office of Health Care Reform, cited several factors expected to have an effect on rates in Maryland that are not considered in the report.

For example, Maryland is planning a gradual transition of high-risk enrollees into the state’s health exchange, a new insurance market that will offer residents a choice of private health plans.

Quattrocki also said Maryland has a very large high-risk pool compared to other states, so the state has already taken care of many of its sickest residents. As a result, people who will gain coverage are not expected to be as sick as those in other states, Quattrocki said.