Affordable Care Act Scene 2 - Insurance Premiums

Parent Cafe
2101

<p>“And who is going to buy that product? Only the people who are pretty sure they have $50K in bills coming up. Thats the death spiral.”</p>

<p>That is incorrect. </p>

<p>Anthem would be in big trouble under your scenario, right?</p>

<p>I should go short Anthem.</p>

<p>bluebayou, yeah terrible start. The technology issues are terrible. ACA is eventually going to succeed or fail based on the payment for healthcare system. That is going to take years to figure out.</p>

<p>Interesteddad, hmmm 1.3 million. How many health insurance companies exist in NH?
I think one of the problems is how do you get insurance companies to play in less populated areas?</p>

2102

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Well that is not true. But as dstark points out, this is becoming too political.</p>

2103

<p>GP, this is an Anthem problem. It is not going to take 3 years for Anthem to get its list out.</p>

<p>This forum is used by people for different reasons. I think venting is a great reason to post, but the post should be printed in a different color so readers can decide if they want to read some poster venting or actually get some information.</p>

<p>I may want to read venting posts at times myself. I like to vent. But sometimes, I just want to read the facts. </p>

<p>1 percent becomes 100 times over. :slight_smile: I would like to skip those posts. Why exaggerate so much? If an argument makes sense, there wouldn’t be the need to blow things way out of proportion.</p>

<p>When somebody exaggerates, the argument loses steam.</p>

<p>This is my vent. I see a lot of venting so this is mine. This post should be in a different color. Red would be too much and would attract too many eyes. I think a pale green would
suffice. :)</p>

2104

<p>Do you guys understand people who live paycheck to paycheck? </p>

<p>They don’t know what ACA or subsidy is. They think they can’t afford health insurance so they go to the ER if their kid has a fever for 3 days. They do however all seem to manage to have an I-phone, which I can’t afford so I find this strange, but it’s beside the point. Anyway, they go on a website and see $600.00 and they go away. Many, don’t even care about threats of fines and penalties. They don’t pay parking tickets. They were promised free healthcare and this is too complicated. Meanwhile, many people who have been playing by the rules are facing huge hikes they were promised would not occur. And I’m not hearing much in the way of explanation.</p>

2105

<p>Actingmt, pale green post. :)</p>

2106

<p>Sorry! I don’t know how. But I’m feeling better. Thanks.</p>

2107

<p>Lol…feeling better is good.</p>

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<p>All of them? Really? </p>

<p>Huh. It’s funny. I can count the number of people I know “living paycheck to paycheck” that have an iPhone on my hands. In fact, many of them I know constantly have them (their phones, often a dumb phone) OFF because they have pay-as-you-go-phones and they can’t pay.</p>

<p>So I think the better question is, do YOU understand those TRULY living “paycheck to paycheck”?</p>

2109

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<p>There’s an entire thread for that ;)</p>

2110

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Some of them, sure. I mean, I cannot claim to understand all people, but I have certainly lived paycheck to paycheck for significant chunks of my adult life, and know many other people who have done the same.</p>

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Actually, many of them do. They are the ones getting into the nuts and bolts of this system, and a lot of them understand it better than you think. Because living paycheck to paycheck does not necessarily mean either stupid or ignorant.</p>

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Yep, because that what poverty is like. I got laid off 5 days before my first daughter was born. When you are living like that, you simply cannot afford to do everything you know you should do, and that sometimes means putting things off until they are emergencies. And you can hit that level even if your only luxury is an occasional snickers bar.</p>

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I never had an iphone either, nor the equivalents when I was dirt poor. Are there people abusing the welfare system? Sure, just like there really are some rich people who got that way through deception and a lack of ethics, but that is not the norm.</p>

<p>I would suggest that the next time you see someone who is on subsidies who has an iphone, you ask them how and why they got it. When I was on food stamps and welfare, I still occasionally found enough money for the occasional luxury - you hit the right stores at the right times and you can find some really nice, used stuff for surprisingly cheap. You might be surprised how cheap you can get an iphone if you are willing to take a used model on a pay-as-you-go plan. You might also be surprised how expensive land lines are and how difficult it is to get a job without a valid phone number. The differential cost of that iphone over the “minimum” phone might be less than you think.</p>

<p>My daughter always had presents at birthdays and Christmas, thanks to the money I squirreled away by couponing, stocking up during sales, and buying used. That we could do so did not mean we were not poor, it just meant we were not absolutely destitute.</p>

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It is true that when you are broke you tend to care less about government fines, simply because the government will not try to get blood out of a stone (thanks to the end of debtors’ prisons). You worry more about the collection agencies.</p>

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Fine, here are some explanations:</p>

<p>We still have a private system of health insurance. The laws are new and, being so politically charged, highly susceptible to change. This equals risk, and in the face of difficult to quantify risk, private health insurers are raising rates and increasing reserves. You can blame the insurers for this part, along with the politicians who like to foster constant uncertainty rather than make a law and let is stand.</p>

<p>In many cases, the type of health insurance is changing dramatically. For some people, the coverage they have been receiving has been quite bare-bones and had to be significantly increased to meet the new standards. Please note that this increase is both the “fault” of Obamacare at the same time that it is fiscally prudent. Eliminating under-insurance has the same costs and benefits of insuring the uninsured, and is a good bet overall even when it raises your rates.</p>

<p>A good chunk of the purported increases are due to hyperbole, ignorance, or laziness, or (quite often) a combination of the three. The snafu with the exchanges hasn’t helped anything, but a lot of the numbers that I have seen have simply not been accurate. Hannity (I think) had a few people complaining about the cost of their coverage, and someone trying to check their numbers got substantially different results using the information the people provided.</p>

<p>And last but not least… the rates were soaring anyway. Long before Obamacare existed, back when everyone was wondering why this junior Senator from Illinois was talking at the convention, rates were increasing dramatically and people were wondering how many employers were going to drop insurance all together.</p>

2111

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<p>Hey if you have information on this risk pool link to it. </p>

<p>As it is, its a pig in a poke. Many of the largest insurance companies decided to sit this out. Or to only put their toe into one market. Others decided to contain costs as much as possible by building very narrow networks. </p>

<p>2014 will be the first years with actual data but even that would be very limited. And it would be skewed to the high users since at worst the young healthy types arent going to face a tax until April 2015. </p>

<p>Thats a lot of keg stands to forgo.</p>

2112

<p>“And who is going to buy that product? Only the people who are pretty sure they have $50K in bills coming up.”</p>

<p>Really? Those are the only people…</p>

<p>Cosmicfish, I appreciate your post.</p>

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<p>[Key</a> Facts about the Uninsured Population | The Henry J. Kaiser Family Foundation](<a href=“http://kff.org/uninsured/fact-sheet/key-facts-about-the-uninsured-population/]Key”>Key Facts about the Uninsured Population | KFF)</p>

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<p>You really dont see that there is an important difference between universe of all uninsured and people who self-select to enroll in insurance through an arduous process? </p>

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<p>What are the scenarios where you would buy health insurance with a $40,000 premium?</p>

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Who has a $40,000 premium?</p>

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<p>The only surprise to me is that your accountant didn’t know that – this isn’t news, it’s written right into the law about the tax credit. Didn’t you have only a few employees? Why don’t you consider buying the HSA but telling your employees that you will find the bank account for only 2 years? Then, in year #3 when your share of the insurance increases, the responsibility for funding their HSA accounts will shift to them. If they haven’t spent money on health care costs, they will still have a nice reserve in their accounts – and you will make decisions for 2016 based on the landscape at that time. </p>

<p>Short-term, non-recurring credits for employers are pretty common in the tax code. The idea is to encourage employers to take certain actions, not to subsidize them forever. </p>

<p>Keep in mind that the employer mandate only applies to companies with 50+ employees. I do think that with the exchanges, many smaller employers are going to find it more cost-effective to encourage their employees to buy off the individual exchange, and spend the money they save on health insurance premiums on salary increases. Since lower paid employees will be eligible for subsidies, that may be a win-win – I mean, it may be that the employee who is earning a salary that equates to about 300% FPL for their household size may be paying far less in premium dollars than the employer was paying for any plan.</p>

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<p>I said we know nothing about the composition of these new risk pools, which is true.
dstark claimed we didnt have zero data
I said that I suppose its nominally true that there probably is an upper bound on how much healthcare these new enrollees would use but that for practical purposes is useless. </p>

<p>At some point you cant make an insurance product that anyone would buy if the utilization is too high. </p>

<p>Who would spend days and days trying to access a web site for a product they dont anticipate using? Very few. Therefor the sign ups are likely to be people who anticipate a need for health care expenditures. </p>

<p>The 2014 rates will be set based on whatever this current crops utilization rate is. And there will only be partial year of data available to work from. </p>

<p>I found that an interesting situation. The 2014 rates could increase enough to force more people out before the pools ever have a chance to stabilize.</p>

2118

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No one has direct access to IRS tax information. It works more along the lines of credit card validation.</p>

<p>With a credit card, when someone places an order on one of the web sites that I run, the site owner never sees or has access the credit card number, nor is it stored anywhere on the company’s server. (It could be - like Amazon stores your number – but I won’t build sites with that capacity for security reasons-- it’s easier for me to just tell my clients to stay out of the credit-card-number storage business. I don’t want my clients to face the potential liability if their system is hacked. I try to make the system secure against hacking, but no system is invulnerable.). Anyway, when someone clicks the “submit” button, the credit card number + vcode is transmitted to the merchant processor, which checks the number against the zip code & whatever info it deems significant, and then returns an authorization. So the only thing the merchant ever sees or gets is typically the last 4 digits of the credit card and an authorization code. Secure connections are used throughout, which means that the data is encrypted as it is transmitted. </p>

<p>With the tax verification for Healthcare.gov, the identifying info (name, social security #) & reported household income is transmitted over a secure connection to IRS-- probably to a separate server that IRS has set up for this function - and the IRS returns with a result based on whether the numbers are “reasonably” consistent. So it doesn’t have to be an exact match - but if the person reports that they earn $30K and AGI for 2012 was $32K, it probably comes back with an OK and the system moves onto the next step. </p>

<p>If there is a big discrepancy - the applicant reports household income of $25K but AGI in 2012 was $45K – then the response is a FAIL. (Of course I don’t know actual response codes, but the point is that there will be some sort of status code – possibly along the lines of VERIFIED, FAIL, NOT FOUND, etc.) The health care site never sees the actual numbers – that is, they don’t know whether the FAIL is because the AGI in 2012 was $45K or $300K or $10K – they just know that there is is not a match, and so the system then kicks in with whatever the next step is for verification. (A request of some sort directed to the consumer). </p>

<p>So neither HHS or the insurance companies are getting the financial data – they are simply using a system that can verify for them, or not. </p>

<p>I’d note that no one is required to provide any financial data at all-- you can skip that part if you don’t want to apply for an advance tax subsidy. (I don’t know how the Healthcare.gov site is structured, but the Covered California site clearly gives that option). If you buy via an exchange you would be eligible for the year-end credit whether or not you submitted financials in the beginning. But obviously you need to provide financials, and those need to be verified, if you want the government to be paying part of your insurance premium on January 1. </p>

<p>I’d note that there was a LOT of concern in the drafting of the statute and regs about privacy – it definitely is something that was debated and considered.</p>

<p>In my opinion, this is probably the major stumbling block in getting the sites to work – that is, I think things may be breaking at the verification step when the APIs on the exchange computers are trying to communicate with the IRS database.</p>

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<p>There is only one insurance company participating in the exchanges – Anthem. When I shopped for individual policies two years ago there were two options, either in the private market or in NH’s state exchange for people who couldn’t get private insurance. </p>

<p>I did read that Harvard Pilgrim (a major player in Mass) plans to enter the NH market next year.</p>

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<p>And the Navigators stake in making sure the risk pool that they are passing off to the insurance companies is what?</p>

<p>The people who need the health services are the ones who are going to sign up.</p>