Last August, I wrote an op-ed in the Philadelphia Business Journal decrying the Commonwealth’s rush to impose a mandate for autism treatment costing $36,000 per patient. (Note: this is a specific, new, treatment, not autism treatment that health plans already cover.) I figured the annual cost of the treatment would be about $3 billion, state-wide.
At the time, the bill was flying through the Assembly, with the enthusiastic support of Gov. Rendell. Since then, it has stalled in the Senate health committee, opposed by Pennsylvania’s health insurers. An article in the Lancaster Intelligencer-Journal explains why. As usual, the article focuses on how much campaign money the committee chairman receives from health insurers (as if the other legislators, who support the legislation, receive none).
According to the article, the health insurers claim that the mandate will increase premiums by six percent. The Pennsylvania Health Care Cost Containment Council (PHC4), the government agency that reckons these things, claims it will be only one percent.
Whoops. Unfortunately, although the bill has been floating through the legislature for a year now, PHC4’s report is still secret. (The Lancaster I-J got a leaked copy). The Insurance Federation of Pennsylvania, which represents all insurers, not just health plans, has an ineffective website, with no public analysis of its position.
So, which claim is more accurate? Pennsylvania has about 8 billion privately insured residents. At $5,000 per head, that results in costs of about $40 billion. As noted above, I’ve estimated the state-wide cost of the new mandate at about $3 billion, which is 7.5% of current costs.
So, the insurers’ claim that the new mandate will add 6% to health insurance premiums is pretty conservative, I’d say. But if PHC4 ever releases its report, we can see why this government agency thinks it would be significantly less.
Is there a lesson here? If you want transparency in health care costs; don’t wait for government to provide it.