The PPACA - Implementation Phase I

[mookie1995]

Re: The PPACA - Implementation Phase I

Health insurers, including UnitedHealth Group Inc. and Aetna Inc., held private sessions with insurance brokers and agents, warning them that individuals and small businesses could see a spike in their premiums in 2014, when most of the provisions of the Affordable Care Act are due to kick in, The Wall Street Journal reported. UnitedHealth told brokers in a private presentation in February that premiums for some consumers who buy their own plans could increase up to 116%, while small-business owners could see rates go up as much as 25% to 50%. Aetna told its national broker advisory council that individual plan rates could increase 55% on average, and gave a figure of 29% for small business rates. Blue Cross and Blue Shield of North Carolina also talked to brokers on expected premium increases.


A Florida Senate committee recommended that the state strip the Florida Office of Insurance Regulation of its power to set rates for insurers under the Affordable Care Act and instead give that authority to the federal government, The Associated Press reported. Those in favor contend that given the uncertainty surrounding the federal act, the FLOIR may have a hard time determining reasonable rates.

[FlagDUDE08]

Re: The PPACA - Implementation Phase I

Health insurers, including UnitedHealth Group Inc. and Aetna Inc., held private sessions with insurance brokers and agents, warning them that individuals and small businesses could see a spike in their premiums in 2014, when most of the provisions of the Affordable Care Act are due to kick in, The Wall Street Journal reported. UnitedHealth told brokers in a private presentation in February that premiums for some consumers who buy their own plans could increase up to 116%, while small-business owners could see rates go up as much as 25% to 50%. Aetna told its national broker advisory council that individual plan rates could increase 55% on average, and gave a figure of 29% for small business rates. Blue Cross and Blue Shield of North Carolina also talked to brokers on expected premium increases.


A Florida Senate committee recommended that the state strip the Florida Office of Insurance Regulation of its power to set rates for insurers under the Affordable Care Act and instead give that authority to the federal government, The Associated Press reported. Those in favor contend that given the uncertainty surrounding the federal act, the FLOIR may have a hard time determining reasonable rates.

I actually saw a Facebook picture on this, and it said that only two states will not see a significant increase because the insurance prices are already insanely high. I'm in one of them, while Vermont is the other. Once again, the perils of the Vampire State, although it's interesting that others are rising to the occasion.

Giving the power to price to the feds is an inherently bad idea, because of a Constitutional regulation that the price must be the same across the board. This will create the scenario described in the economics thread; I'm not going to bother echoing it here.

[Rover]

Health insurers, including UnitedHealth Group Inc. and Aetna Inc., held private sessions with insurance brokers and agents, warning them that individuals and small businesses could see a spike in their premiums in 2014, when most of the provisions of the Affordable Care Act are due to kick in, The Wall Street Journal reported. UnitedHealth told brokers in a private presentation in February that premiums for some consumers who buy their own plans could increase up to 116%, while small-business owners could see rates go up as much as 25% to 50%. Aetna told its national broker advisory council that individual plan rates could increase 55% on average, and gave a figure of 29% for small business rates. Blue Cross and Blue Shield of North Carolina also talked to brokers on expected premium increases.


A Florida Senate committee recommended that the state strip the Florida Office of Insurance Regulation of its power to set rates for insurers under the Affordable Care Act and instead give that authority to the federal government, The Associated Press reported. Those in favor contend that given the uncertainty surrounding the federal act, the FLOIR may have a hard time determining reasonable rates.

I call bull*****, and here's why. Insurers have two issues under ACA. Everybody needs to have insurance (good thing for insurers) and you can't deny people insurance for prior disabilities (bad thing for insurers).

So, insurers get a flood of healthy people paying premiums who aren't using the system all that much, and a bunch of older sickly people as an offset. The benefit for the insurers is, the older sickly people are most likely being subsidized by the feds while the younger healthy people aren't. So, why the rate increases unless its to line the insurers' pockets?

[FlagDUDE08]

Re: The PPACA - Implementation Phase I

I call bull*****, and here's why. Insurers have two issues under ACA. Everybody needs to have insurance (good thing for insurers) and you can't deny people insurance for prior disabilities (bad thing for insurers).

So, insurers get a flood of healthy people paying premiums who aren't using the system all that much, and a bunch of older sickly people as an offset. The benefit for the insurers is, the older sickly people are most likely being subsidized by the feds while the younger healthy people aren't. So, why the rate increases unless its to line the insurers' pockets?

The rate increases would be to cover the risk they must assume because "you can't deny people insurance for prior disabilities". Sure, the lack of elasticity of the product will allow for some different pricing, but that is also offset by the fact that states still have multiple insurers (at least I assume they do). In addition, who says that you can't change the pricing paradigm to just gouge the freeloaders that try to get insurance once they get sick? Sure, you can accept them, just charge them more. If that's not allowed, then the insurance price will end up going above the tax amount, thereby causing what you colloquially referred to as "doomsday".

[FreshFish]

Re: The PPACA - Implementation Phase I

So, insurers get a flood of healthy people paying premiums who aren't using the system all that much, and a bunch of older sickly people as an offset. The benefit for the insurers is, the older sickly people are most likely being subsidized by the feds while the younger healthy people aren't. So, why the rate increases...?

A "flood" seems overly optimistic....a "trickle" more likely.

Your question was already answered in the articles, you know. The subsidies are not included in the premium, they are used to pay the premium.

Great plan so far, eh? : "PPACA imposes costs that cause premiums to go up 85% and subsidies will cover 75% of that increase."

Oops, Congress has never been known for its actuarial acumen, what makes you think they'd suddenly discover how to do calculus when they can't even do basic arithmetic?

[LynahFan]

Re: The PPACA - Implementation Phase I

I call bull*****, and here's why. Insurers have two issues under ACA. Everybody needs to have insurance (good thing for insurers) and you can't deny people insurance for prior disabilities (bad thing for insurers).

So, insurers get a flood of healthy people paying premiums who aren't using the system all that much, and a bunch of older sickly people as an offset. The benefit for the insurers is, the older sickly people are most likely being subsidized by the feds while the younger healthy people aren't. So, why the rate increases unless its to line the insurers' pockets?

You're making a pretty big assumption that the additional premiums paid by previously uninsured people will equal the additional payments the insurers will make to cover people who were previously uninsured (including those with high costs who had been deemed uninsure-able). In fact, it would be quite shocking if those two sums did happen to exactly cancel out.

[Rover]

You're making a pretty big assumption that the additional premiums paid by previously uninsured people will equal the additional payments the insurers will make to cover people who were previously uninsured (including those with high costs who had been deemed uninsure-able). In fact, it would be quite shocking if those two sums did happen to exactly cancel out.

But that's the deal the insurers struck with the Obama administration over the legislation. In order for them to support coverage for the previously uninsurable, they demanded that a requirement be but in there to get the younger healthy people added to the pool. If that doesn't cancel out as you say, they shouldn't have agreed to it then, right?

[FlagDUDE08]

Re: The PPACA - Implementation Phase I

But that's the deal the insurers struck with the Obama administration over the legislation. In order for them to support coverage for the previously uninsurable, they demanded that a requirement be but in there to get the younger healthy people added to the pool. If that doesn't cancel out as you say, they shouldn't have agreed to it then, right?

You're still making a huge assumption that the penalty to not join will be higher than the amount it will cost to join. From what I've heard, the penalty is smaller, meaning people aren't going to join.

[Rover]

You're still making a huge assumption that the penalty to not join will be higher than the amount it will cost to join. From what I've heard, the penalty is smaller, meaning people aren't going to join.

Aren't you undervaluing or compeletely not valuing actually having insurance though?

This is completely random, but if it'd cost you 500 bucks a month for insurance, and currently you pay zero and have none, you might be okay with that. However, lets say the law goes into effect and now doing nothing costs you 250 bucks as opposed to paying 500. At that point one might say its better to shell out the extra 250 and have insurance than to do nothing but still end up paying. So, the question isn't the difference between insurance costs and tax penalty. Its if the tax penalty is lower than what you think having insurance is worth and the monthly premium which you're paying anyway.

[FreshFish]

Re: The PPACA - Implementation Phase I

Here's where one of the bigger messes is most likely to occur:

People read that they can enroll in an insurance plan at any time they want, and pre-existing conditions will not interfere with their ability to be offered coverage at standard rates. They think they'll game the system and wait until they are sick before buying insurance. then they get into an accident. Sure, they can buy insurance afterward, but none of their injuries will have occurred while they were covered, and so they will still be on the hook for all the treatement for those injuries anyway, just as if the law hadn't been passed.

If anything, the law will probably in practice exacerbate the problem of people not having coverage when it is most needed because people don't understand the details about pre-existing conditions. The press says you can buy insurance and pre-existing conditions will be covered. That's just plain wrong!

The law says you can buy insurance at any time and pre-existing conditions cannot be used as a reason to deny you coverage. The law does NOT say that coverage must be offered retroactively. Coverage is only offered on a go-forward basis.

[St. Clown]

Re: The PPACA - Implementation Phase I

Here's where one of the bigger messes is most likely to occur:

People read that they can enroll in an insurance plan at any time they want, and pre-existing conditions will not interfere with their ability to be offered coverage at standard rates. They think they'll game the system and wait until they are sick before buying insurance. then they get into an accident. Sure, they can buy insurance afterward, but none of their injuries will have occurred while they were covered, and so they will still be on the hook for all the treatement for those injuries anyway, just as if the law hadn't been passed.

If anything, the law will probably in practice exacerbate the problem of people not having coverage when it is most needed because people don't understand the details about pre-existing conditions. The press says you can buy insurance and pre-existing conditions will be covered. That's just plain wrong!

The law says you can buy insurance at any time and pre-existing conditions cannot be used as a reason to deny you coverage. The law does NOT say that coverage must be offered retroactively. Coverage is only offered on a go-forward basis.

Take this for what it's worth.

I was listening to a radio show a few weeks ago (months now?), and a couple guys who claimed to work for insurance companies called in and said that their companies would avoid the very scenario you're discussing by making it so insurance wouldn't be effective for something like 15 days or a month after the contract is signed. That way they could avoid the situation where guy breaks an arm, calls the insurance company to get coverage, and then goes to the hospital an hour or two later.

[joecct]

Re: The PPACA - Implementation Phase I

Take this for what it's worth.

I was listening to a radio show a few weeks ago (months now?), and a couple guys who claimed to work for insurance companies called in and said that their companies would avoid the very scenario you're discussing by making it so insurance wouldn't be effective for something like 15 days or a month after the contract is signed. That way they could avoid the situation where guy breaks an arm, calls the insurance company to get coverage, and then goes to the hospital an hour or two later.

But, if you come down with the Big C, the pre existing clause could be a benefit.

To be fair, I think the best bet is a quarterly (semi annual / annual?) open season, where you have 1 month to sign up for insurance then it is effective the start of the next quarter. For example, Open Season runs 2/15 - 3/15 and coverage starts 4/1.

[FlagDUDE08]

Re: The PPACA - Implementation Phase I

Here's where one of the bigger messes is most likely to occur:

People read that they can enroll in an insurance plan at any time they want, and pre-existing conditions will not interfere with their ability to be offered coverage at standard rates. They think they'll game the system and wait until they are sick before buying insurance. then they get into an accident. Sure, they can buy insurance afterward, but none of their injuries will have occurred while they were covered, and so they will still be on the hook for all the treatement for those injuries anyway, just as if the law hadn't been passed.

If anything, the law will probably in practice exacerbate the problem of people not having coverage when it is most needed because people don't understand the details about pre-existing conditions. The press says you can buy insurance and pre-existing conditions will be covered. That's just plain wrong!

The law says you can buy insurance at any time and pre-existing conditions cannot be used as a reason to deny you coverage. The law does NOT say that coverage must be offered retroactively. Coverage is only offered on a go-forward basis.

Did you ever watch "The Case of the Purloined Policies" from the Mathnet segment of Square One TV? Although it's not an exact case, a policy is taken out for a fake vehicle, and a couple days later the "vehicle" is conveniently reported stolen, in order to collect money.

[FlagDUDE08]

Re: The PPACA - Implementation Phase I

Take this for what it's worth.

I was listening to a radio show a few weeks ago (months now?), and a couple guys who claimed to work for insurance companies called in and said that their companies would avoid the very scenario you're discussing by making it so insurance wouldn't be effective for something like 15 days or a month after the contract is signed. That way they could avoid the situation where guy breaks an arm, calls the insurance company to get coverage, and then goes to the hospital an hour or two later.

If I were head of an insurance company (and unfortunately I'd pretty much need a monopoly to do this; could probably only get away with it in rural areas), I'd require a coverage minimum. i.e. If you buy a policy, you must keep it for at least two years, with a termination fee of triple the remaining premiums excepting in the cases of death or transfer of permanent residence to a state in which my company's conglomerate does not offer coverage.

[FreshFish]

Re: The PPACA - Implementation Phase I

To be fair, I think the best bet is a quarterly (semi annual / annual?) open season, where you have 1 month to sign up for insurance then it is effective the start of the next quarter. For example, Open Season runs 2/15 - 3/15 and coverage starts 4/1.

Yes, that is very sensible. Had there been any grownups with real world experience involved in drafting the law, that would have been a sensible way to set it up. You have to buy the insurance in advance to be covered for anything that happens, and if everyone had the same open enrollment window, then insurance companies could price their offerings with some semblance of reliability.

Under your plan, pre-existing conditions don't stop you from being eligible to buy health insurance at "standard" rates during the open enrollment window.

Another element that will be very unpopular as it becomes better understood is the lack of age banding. You'd think they could at least do a "18 - 40 / 41 - 55 / 56 - 70 / 71 and older" kind of deal or something like that to make the rates more palatable.

Best would be a linkage between premium and lifestyle choice: cigarette smokers should pay more than non-smokers, for example.