Affordable Care Act Scene 2 - Insurance Premiums

Parent Cafe
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<p>It looks to me like the pricing on the exchanges is pretty much in line with the pricing that had already been in effect in the ultra-high price individual market. I suspect the net net for the insurance companies is that this whole reform will drive a significant number of customers from lower price employer group products to higher price individual products (the exchanges). That’s a win for the insurance companies.</p>

<p>There has to be a win somewhere or the system is unsustainable. The insurance companies always could have offered uncapped/no pre-existing condition limit health care policies. They just knew that consumers would not accept the prices that would result from that. In effect, the new law is forcing consumers to accept those prices.</p>

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<p>Late to today’s conversation, so I’m responding to a much earlier comment. Someone up thread posted that the ACA law was not passed in the same process as other laws since it was passed through “reconciliation”. </p>

<p>Anyone who thinks passing laws through reconciliation is unique should look up what “Cobra” stands for. We’ve thrown that word around a lot in this thread and it seems not everyone knows what it means.</p>

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<p>However it was passed, the law is the law. But it was always unpopular and the broken promises and broken website are not winning over any new fans. That’s just reality.</p>

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<p>Some consumers. But most people get subsidies. And that’s going to be the win, right there.</p>

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<p>“Some consumers. But most people get subsidies. And that’s going to be the win, right there.”</p>

<p>Only if the subsidies consist of money made out of thin air. The money comes from somewhere, perhaps it will be in the form of debt paid by our children and grandchildren. Unless, of course, the Treasury can print it faster.</p>

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<p>Sorry, busdriver, I didn’t make myself clear. When I said “win”, I was talking about a constituency for the law. Some people on the individual market, including some people here and people I know in real life, are paying a lot more for their insurance. But most people are paying less-- because they have subsidies. </p>

<p>How subsidies are being paid for is another issue, and one that I think is outside the scope of this thread.</p>

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<p>Your speculation is off base. Actually, it looks like the reasons the sites have been crashing and stumbling under relatively mild traffic demands is too much, overly complex security measures. Online security is resource-intensive, and systems that rely on multiple pieces of data being verified are more likely to reject than confirm requests – so then you get a cascade of issues like people not being able to complete transactions because the system times out, difficulty creating, confirming, and changing account passwords, etc. A higher level of encryption is also more resource intensive --when you read about a type of encryption that refers to a bit number (e.g. 128-bit encryption) – that refers to the bandwidth size of the authorization keys. The bigger the key, the more data being transmitted back and forth. It adds up and it slows everything down. Here’s a wikipedia article with some good graphics that should give you a good sense of what is going on behind the scenes when you send data over a strongly encrypted system:
[Advanced</a> Encryption Standard - Wikipedia, the free encyclopedia](<a href=“http://en.wikipedia.org/wiki/Advanced_Encryption_Standard]Advanced”>Advanced Encryption Standard - Wikipedia)</p>

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<p>I understand, cf. I am happy that people who couldn’t afford insurance before, or were going broke paying for it, can get some help. It just always drives me nuts when there is the implication that somehow this subsidy just magically appears from nowhere, and that it isn’t going to cost anything. That somehow this is going to save many millions of dollars, when the reality is, the insurance companies will still get their massive cut from the taxpayers.</p>

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<p>calmom, I think you are a little too trusting and overly supportive of this system. I realize many of us are overly negative too, including me. First it was, the system is crashing because there is so much interest. Now, it’s that the security is too complex. You believe whatever you like, but I will wait until everything shakes out, and not believe anything until they actually get it fixed. I was in the military long enough not to buy the, “Trust us, we’re the government. We’re here to help.” I hope they get it fixed before people are fined for products they are unable to sign up for.</p>

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<p>ACA is paid for…</p>

<p>Poetgrl listed some of the taxes that will help pay for ACA.</p>

<p>According to the CBO, ACA will cut the deficit over the next 20 years. These are projections. The projections could be wrong, but at least the projections are done by actuaries and not by people who feel…</p>

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No, the system is crashing because the complexity of the sites and the data being communicating magnifies the load created by moderately high traffic. I’m not forming my opinion based on public statements; my opinion comes from a relative level of sophistication about how web sites and transmission of data works. </p>

<p>The fact that the web site crashes or hangs doesn’t indicate a lack of security – if the data is lost in transmission it is really frustrating for everyone, but the data is lost for everybody. Encrypted data can’t be read unless there a successful completion of the transmission. </p>

<p>I don’t want to engage in an online debate over this – but I do know enough about what goes into constructing this type of system to also know where the weak points are. Plus I know what type of information the system asks consumers to enter. The information is quite minimal–the main piece of info that is risky is the social security number, and of course there is no way they could set this up without asking for that. Other than that, it’s pretty much the sort of info people are entering online all the time with banking transactions or credit applications.</p>

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<p>“Actually, it looks like the reasons the sites have been crashing and stumbling under relatively mild traffic demands is too much, overly complex security measures.”</p>

<p>That sentence that I quoted from your post is why I said, “The security is too complex”. I was just quoting you. Apparently “overly complex security measures” is completely different from, “The security is too complex.” Ah, now I understand.</p>

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That may be the result in your state, but I don’t think that is what is going on overall. My sense is that the full price is coming in at something closer to the 70% level - that is, higher than the cheapest rates but well under the “ultra high” levels. I don’t have specific data, I just know from previous shopping and from anecdotal information what prices were and am seeing what they are now. </p>

<p>Again, I am in a high rate area and I am seeing an increase in my rates. But I just have an awareness that I was getting a preferred rate – so I view it more like the cost of an airline ticket. Over the years, I have typically been able to get myself or family members on a round trip flight west/east coast flight for $350 or less. But I never was under the impression that it was the average cost for an airline ticket – I understood that I was buying discount tickets and often juggling the flight schedules to fit the availability of discount seats. So if there was some new law passed requiring that everyone be charged the same price for the same type of seat – I’d assume that I’d be paying more for all airline tickets. </p>

<p>I personally was paying $400 a month for a high deductible policy. If nothing had changed, my rates would have gone up to $580 next year, with the increase being based on my age. That’s assuming that the insurance company would not have increased rates, but historically they increased rates every year – so more likely I would have been paying around $620. Now, if I buy a policy from the same company, I’ll be paying $650. </p>

<p>So I’m not exactly dancing for joy, but I don’t think the <em>average</em> 59-year-old California premium buyer my rates. I think I had a cut rate, in the same way that I understand that I pay less for auto insurance because of my “good driver” discount. So I think that rate I am now seeing is probably significantly below the average that was being paid before – it’s just that I had rates that were deeply below average. There were some people who did not have preferred rate status who were paying rates well above average. My guess is that the average rate was also somewhat higher than median rate, because of a smaller group of hard-to-insure people who were paying exorbitant rates. (In other words, if 5 people age 35 have insurance, 3 are paying $300, 1 is paying $500, and 1 is paying $800 - you have a median of $300 but an average of $440 – so if the insurance company starts selling the same policy at $420 – it looks like a big increase to the 3 who were paying $300 – -but it’s actually an overall premium cost reduction in aggregate). </p>

<p>The complicating factor is that so many were previously excluded from the market. I don’t know how you assign a premium value to the person who previously couldn’t buy insurance at any cost – but those people are now all being brought into the pool of insurance buyers.</p>

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<p>busdriver, I don’t understand the point of your post – I was trying to explain why complexity of security is tied to server load. They are not two separate things – they are one and the same, because the security magnifies the impact of the load.</p>

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<p>So, not very many transactions, but instead of having four bits per transaction you have 200, something like that?</p>

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<p>calmom, the point of my original post is that the reasons that we are given for the problems with the websites are changing, and I’ll wait for the final analysis before making a conclusion. You confused me when you said the system was crashing because of overly complex security measures, and then right afterwards said it wasn’t because of security that was too complex. But, that’s pretty trivial, I guess. I’ve seen people refute a point they just made in the next sentence, and I’ve said the opposite of what I meant before. My point is, if for some reason me or my kids decide to seriously look into the exchanges, we’ll wait until the dust has settled and everything is fixed. That may take a long time.</p>

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<p>Well, kind of – except that you are confusing bits with data transmission. A “bit” is a piece of data being transmitted. A “file” is the discrete type of information being sent – so typically when you visit a web site you are loading multiple files, such as the main page text, a separate file for each image including small icons, separate files for style sheets, cookies, and javascript programs – all of which are invisible to you but essential to page function. </p>

<p>Internet transmissions are sent in “packets” which are limited in size. A short piece of code might be transmitted in a single packet, but a large file such as an image or web page may be broken down into dozens of separate packet. </p>

<p>So when a person “visits” a web page, loading a single page could mean that 30 “files” were transmitted, and that it took 120 “packets” to deliver that single page. When a form is filled out and you click transmit – you have the same thing going on – you can be submitting several separate “files”, each of which may require multiple “packets” to be transmitted.</p>

<p>The reason secure encryption slows it all down is that another file with an encryption key has to go along with the transmission – the more secure the encryption, the larger the key. But without the encryption key, the data sent is unreadable. </p>

<p>I’d add that the practice of encrypting & decrypting also is time-consuming and tends to slow the process. </p>

<p>So I think your question would be more accurate if you referred to the number of “packets” rather than “bits”. The bits are what is in the packet.</p>

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<p>Calmom, got another question for you. Since I need to have insurance on Jan 1, I will need to make a decision by Dec 15. If I decide sometime between Jan 1 and March 31 that I want to change my insurance because of additional information provided to me regarding provider networks, will I be allowed to transfer or am I stuck with the plan I selected prior to Dec 15 for all of 2014?</p>

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But I didn’t ever say that. I tried to explain how complex security measures magnify the impact of server load, because you seemed to think that it was an either/or situation – and I’m saying that’s all part of the same issue. The simpler the web site, the more traffic it can handle. </p>

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That makes sense – for the same reason that if there is a power outage in your neighborhood, it can be a problem if when power is restored, everybody’s appliances all go on at once. So visitors who are just poking around and looking are using up resources and making the experience slower for everybody. </p>

<p>It will be fixed. It’s not an unfixable problem. I think they need a queue and throttle system.</p>

<p>That is, first people would set up an account – the only thing that would happen with account set up is that they would create user name and password, and supply an email address. (That’s easy). </p>

<p>After that was done, when they were ready to apply for insurance, they would fill out a financial form (if they wanted a subsidy), and submit the data-- but they would NOT get an instant response. Instead, they would get a notice that their data was queued for submission, and perhaps a time estimate. They would log off. They could come back later and check to see the status of their application, and they would receive an automated email that would notify them when the status had changed. The system could also be programmed to send repeat notices daily until they did come back-- the nag system would help bring back people who were less motivated on their own to complete the process. </p>

<p>That would mean that people would be logging off the system more quickly, and the system would not be slowed down by the processing tasks. The queues would probably be long during peak hours, but then the system could catch up overnight. </p>

<p>Anyway, just my idea. Probably not particularly easy to build the architecture for that system on top of what they currently have, though I would say that it is really, really, easy to redirect traffic from an old server to a new one. So they could actually start from scratch, build and test a whole new system, and then simply make the “click here” buttons point to the new system when it was ready. If the web pages on the new system were designed to look like the old system, then users would never even know that there was a new backend – they’d just see that things were working a lot faster than before.</p>

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<p>GP, did Blue Shield tell you that they would automatically roll you into a new policy Jan 1 if they didn’t hear from you? That’s what they told me – so if you aren’t expecting a subsidy, one option might be to simply let that rollover happen, and if it turns out that you want the Anthem policy or another option on the exchange instead, then you can use the exchange to enroll up to March 31st, and then just notify BS that you are cancelling. </p>

<p>I’ve heard contradictory information, but I think that if you select a policy on the exchange but don’t pay for it, you can change any time up until March 31-- but that once you do pay on the exchange you will be locking into that policy.</p>

<p>But you can ALWAYS cancel a policy – since I am assuming from your question that you would probably be moving from one company to another, you could probably even do the switch off-exchange. That is, in my above scenario, if Anthem’s open enrollment period is until March 31, then as far as Anthem is concerned, you can apply up until that date.</p>