Student insurance cost going up


By Eric Dent



Eric Dent Contributing columnist


If you have a child in college, I know you share my relief that tuition increases have slowed down recently. This fall, however, brace yourself.

Fayetteville State University, where I work, has announced that the cost of the mandatory student health insurance policy will go up by 28 percent. The University of North Carolina at Pembroke has announced an increase of 29 percent. Correction: Neither increase was “announced.” These charges will simply appear, silently, on the bill. This isn’t a problem for students who are under the age of 25 and can be covered by their parents’ policies, but that doesn’t fit much of the student profile of these two campuses. This is just the tip of the iceberg for the Affordable Care Act, which continues to have devastating consequences across the United States.

Alaska was the first state to reach the “death spiral” — as costs go up, insurance providers leave the market, causing costs to go up for those that remain, who then leave, and so forth. Although the federal government is providing about $2 trillion in subsidies over a 10-year period, Alaska had to provide additional subsidies to keep rates low enough for the sole remaining provider, after three other companies pulled out.

Let me mention a change in a federal program that could bring $870 million to Robeson County over the next 10 years. If the ACA were terminated and the projected subsidy was paid to each county on a per person share, that’s how much we would get. Can you imagine how $870 million could transform our county? Since my column two months ago, three additional state-established nonprofit providers have gone bankrupt. Normally, these organizations announce they are closing their doors at the end of the year, fulfilling their contracts with people, but Oregon’s organization closed immediately, leaving 20,000 people to try to find new coverage. That likely means changing doctors and certainly means starting all over with meeting deductibles. Oregon set up two of these organizations and both failed. Only eight of the original 23 organizations are still in business and the ones still alive reported losses of $202.3 million on June 30. The 15 bankrupt companies were “loaned” $1.5 billion of taxpayer money, which is now gone forever.

A very interesting research report came out using pre-ACA data, but we know the outcome is even worse since the ACA was implemented. It showed that the total compensation for low-wage workers actually increased more during 1996-2006 than it did for the top 1 percent. However, the percentage of that compensation forced into health care coverage went up 97 percent for the low-wage workers and only 7.5 percent for high-wage. Consequently, the cash portion of compensation for high-wage workers increased more than low-wage. The costs of health insurance and health care are insidious and appear in unexpected ways.

Humana is the latest large organization to announce that it will participate in no more than 11 states in 2017, down from 19 in 2016. To try to stay alive, health insurance companies are trying to cut costs by merging (Anthem with Cigna, Aetna with Humana), but the Obama administration is currently blocking these mergers because they will reduce competition in the marketplace, a necessary component of any cost-effective economic transaction.

Geisinger, a small, home-grown insurance provider in Pennsylvania, has previously been held up by the Obama Administration as the model for others to follow. It lost $30 million last year even though it received a 20 percent increase in premium rates. It is requesting a 40 percent increase in rates for 2017.

Lately, providers in many states have submitted their rate increases for next year — 17.7 percent in Florida, 15.8 percent in Virginia, 38 to 43 percent in Iowa; New Hampshire’s second largest provider is asking for 45.2 percent.

It is no wonder that in the latest Real Clear Politics poll only 39.2 percent of the country supports the ACA. It is sucking so many resources from us with no measurable health benefit yet. Think of how much the poor, or the environment, or our infrastructure could benefit if we used that $2 trillion in a way that helped our country much more.

Eric Dent Contributing columnist
http://robesonian.com/wp-content/uploads/2016/08/web1_Eric-Dent-1.jpgEric Dent Contributing columnist

By Eric Dent

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