I read this in the paper and then Googled, the most recent article was this one
Is it possible to discuss this without being shut down for TOS violations? I’m mainly th Hong about people who use the ACA insurance, what will happen to the insurance next year? What will happen to all users if, at some point in the next few years, the ACA marketplace crumbles? Ability to buy a new plan with health issues? Ability to afford a plan?
This is very concerning and much is unknown. Whatever people’s political views, they need to pay attention to what is happening.
This is about the White House shutting down the risk adjustment payments, which require insurers who have healthy insured populations to reimburse insurers who have sicker populations. It’s not a cost to the government. Risk adjustment is put in place so that insurance companies won’t try to game the system by only enrolling healthy people; if they do, they have to pay off the other insurance companies that cover the sick people.
The decision is retroactive. Insurers who were owed money (and who, presumably, were depending on getting it) will now not be paid. Some insurers might decide to leave the market, or go under, because they needed the money.
Risk adjustment has not previously been controversial. Both Medicare and Medicaid have risk adjustment.
That is a very biased article and it does not even discuss why this is happening. One problem with nationalizing healthcare is that the courts get involved. Various courts have issued conflicting rulings about the appropriate methodology for calculating the payments. So the payments are being held up.
The average healthy person would be better off going without health insurance and buying stock in United Healthcare.
I heard an NPR report with the person who started the lawsuit. He thinks that ultimately, this will make it fairer for the small companies to compete. https://www.npr.org/2018/07/08/627119658/trump-administration-suspends-insurance-payments-under-affordable-care-act
It makes no sense to me that they would just shut down payments while they are trying to come up with a new system, except for the relationship of the ACA and the current administration. I won’t go further.
Can you please provide links to the court cases that issued conflicting rulings about the appropriate methodology for calculating the payments, @WISdad23?
The New Mexico court case that the administration relied on did not issue any ruling at all about the appropriate methodology for calculating the payments. Rather, it said that CMS had not adequately explained its methodology. This article (which you will probably also say is biased) explains the ruling in the New Mexico case and the Justice Department’s options: https://theincidentaleconomist.com/wordpress/taking-a-dive-on-risk-adjustment/
Yes, but…
…of course, the de facto guarantee encouraged some insurers to purposely underprice their actuarial estimates to gain market share and are now claiming that the formula is unfair. The federal Judge in NM agreed.
btw: yes, I know that the RA was supposedly capped, but from what I’ve heard from those in the ins biz, the previous Admin gave the insurers a wink-and-nod that they would push to raise the RA pool if necessary.
Not sure why you would assume that I would think the article was biased.
In any case, I think it illustrates my point - healthcare is now a bottomless pit of government rules and bureaucracy. Read the article and notice the “stakeholders”: government, district court of New Mexico, judges, the Justice Department, the Tenth Circuit, the Supreme Court. Nowhere in the article does it mention stakeholders such as: patient, doctor, hospital. Healthcare has been abstracted into a massive governmental mess. Regardless of your politics, one thing is certain - there will be political battles over healthcare now that government has taken over.
“The average healthy person would be better off going without health insurance and buying stock in United Healthcare.”
Really?? Are you going for hyperbole here? Sounds like a real roll of the dice. Heaven forbid you have an accident and good luck if you find out you’re not as healthy as you thought and come down with cancer or some other major ailment. One of the most common reasons for personal bankruptcies is crushing medical bills. All well and good if you have substantial assets but for the average American it would a) crush them financially and/or b) pass the costs along to those who do have insurance in terms of higher costs. There is no free lunch here. Someone needs to pay.
All the more reason that one’s financial planning should have the goal to enter the capitalist class (where one can live off of one’s investment income and assets indefinitely without depending on others, including Medicare) as soon as possible.
However, most Americans will not enter the capitalist class and will retire into the dependent class, relying on others (Medicare, Social Security, relatives, charity) for their financial needs.
A third option: universal healthcare like most of the developed (and often developing) world.
The federal judge in NM did not agree. Do not make claims about this suit unless you know what it says. Here is the ruling: https://theincidentaleconomist.com/wordpress/wp-content/uploads/2018/07/Order.pdf
As you can see, the judge ruled that “HHS’ use of statewide average premiums in its risk adjustment methodology is not contrary to law, but is arbitrary and capricious…” Note that arbitrary and capricious is a technical term here. The judge ruled that HHS was arbitrary and capricious because it did not adequately explain and justify its decision to make risk adjustment budget neutral.
Bagley says that risk adjustment is by definition budget neutral.“It’s totally senseless to compel CMS [the part of HHS that makes the rules] to explain something that was obvious to the agency and to every stakeholder in the process.”
Returning to the claim about insurers intentionally underpricing, I don’t understand how it would be beneficial for an insurer to purposely underprice its premium, in this regime. An insurer who purposely underprices will end up with a healthier mix of insured, and a bigger market share. Then, because it has healthier customers, it will be a payer, rather than a receiver, in risk adjustment. So the premiums already don’t have to cover costs, and then the insurer has to pay part of the premiums to other insurers because it has healthy customers. This is good why?
Apparently what the de facto guaranteed did was encourage some insurers, like the plaintiff in this case, to purposely underprice and then sue the government because the risk adjustment would make their underpricing unsuccessful financially.
That requires depending on politics in favor of that. Since that is unlikely (regardless of where you stand on the issue), taking individual action to work toward joining the capitalist class may be necessary for your own sake (regardless of whether you do any political activity on this issue).
Yup, I am just going to sign myself up for that capitalist class. (Hope they have financial aid for me.)
I found all the articles to have some slants or biases.
And my thoughts today are not about the politics and the lawsuits, nor even about what things will look like in ten years. Instead I am wondering what each of those ten years will look like for people using ACA and making choices. Especially people thinking about early retirement, no longer having work place provided health care, making a well-considered choice based on the ACA option. What if that person/couple has a health issue and could not get coverage without the ACA; what if the premiums double/triple.quadruple and the well-considered choice is now a huge mistake.
Most government programs have a huge component of arbitrary, like FAFSA #s allowing a grant when that income lets one live large in Nebraska and be low in come in San Francisco. In that same way, the day to day & year to year effects of these changes are going to hit some people harder than others.
Today it was also announced that grants to non profits that assist people in signing up for healthcare – of any kind, but they are targeting ACA-inclsuive groups ---- grants will cease.
The pre-existing issue is particularly worrisome when you notice that your preexisting condition could exclude you from any coverage at all, if you lose or change jobs. Back in the day, a new employer could impose a waiting period of 30-90 days before you are covered. It’s possible that with all the damage to ACA, that will be the case again, and that “waiting period” will constitute being uncovered. And that entitles an insurer to deny you coverage at all.
But we don’t know yet. We can’t know, yet. Insurance is based on guessing odds, and that is a very difficult thing these days. So me and mine are stockpiling money and praying for mercy.
MODERATOR’S NOTE:
We’ll give it a shot. However, I’ve already deleted 8 that crossed the line. Weill, it was actually two, and then 6 back and forth responses to them.
Isn’t that what I posted?
You are off into the weeds here, CF. Sure the plaintiff needed a legal reason to sue, and arb & capricious fits the bill. In essence, the feds were unfair to the plaintiff per them. (You say tomAto, I say tomahtoe.)
btw: the WSJ article mentioned in the vox article reports that a federal Judge in MA did not find that feds to be arbitrary and capricious and “upheld” the formula.
Let’s not talk about the legal stuff, someone, somewhere is going to decide the answer by which we will be required to abide, not much any of us can do about that. But what can anyone do/recommend the people buying insurance do?
The bottom line is if you rely on the individual market to purchase health insurance your rates are going to increase substantially because of this. I read 20%-25% but I can’t remember where. In addition, many insurers will be leaving the market because millions of people will choose to go without because it will be unaffordable, leaving only the most desperate (sick people) purchasing insurance. Insurance companies are not in the business of losing money, so they will simply stop offering individual policies. You will be lucky if you have one company insuring where you live and it will be way more expensive than what you paid this year.
If I were the OP, I would start job hunting immediately for a job with benefits.