Affordable Care Act Scene 2 - Insurance Premiums

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<p>“As the law was originally envisioned, more than half of the uninsured people in the United States – 24 million or so, according to the Kaiser Family Foundation – who would be getting insurance through Obamacare would have been getting Medicaid. Anyone who makes less than 138% of the poverty level – about $27,000 for a family of four – isn’t eligible for federal subsidies to buy insurance, so Medicaid is effectively their only option.”</p>

<p>Half of the Obamacare participant population. That’s the plan. </p>

<p>LasMa, health insurance was never a free market product. It’s far less so now. That is just silly.</p>

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<p>Half of the uninsured population would get insurance through Medicaid, because programs for poor people are for poor people. Recall, in order to be eligible for Medicaid, a single person has to earn less than about $16K/year, and a couple less than about $21.4K. </p>

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<p>Free market forces are what prevented sick people from getting insurance before ACA. Insurers deemed them to be unprofitable.</p>

<p>Poor people may or may not have been unprofitable, if they could pay the price of admission. But free market forces set the price of admission at a certain level which they couldn’t pay.</p>

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<p>I’m still not seeing how wider networks are more costly to the insurance companies. Doctors who want to be in a network accept the fee schedule the insurance company is offering for patients in that network. It doesn’t matter if they’re Picasso doctors or not; they all get the same compensation. So where are the costs to the insurance companies in offering wider networks, or conversely the savings in narrowing the networks?</p>

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<p>Half the uninsured is different than half the ACA population. </p>

<p>Wellspring, I think the article gives some basics. The Picasso hospital wants a higher reimbursement for an appendectomy- the prior example was Seattle Children’s, 23k versus 14k. Which do the majority of families want their insurer to cover? </p>

<p>If Cedars and the CA carriers could agree, Cedars would be on the list. </p>

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<p>Wellspring, the networks are typically narrowed exactly to the providers willing to accept the offered reimbursement. Typically, it’s not that Dr. Feelgood, the Happy Shot Medical Clinic and Forest Resort Hospital and Casino are willing to accept Acme Insurance’s reimbursement, but are maliciously excluded from Acme’s network. Rather, Dr. Feelgood, Happy Shot and Forest Resort are NOT willing to accept the offered reimbursement, and that’s why they are excluded.</p>

<p>Use Fang’s Razor here: insurance companies are not idiots. They know that at a given premium, a wider network is more attractive than a narrower network. So they would have no reason to exclude providers who were willing to participate in their network at the network reimbursement level.</p>

<p>Now, all this assumes perfect information between providers and insurers. There are undoubtedly some cases where somehow some providers get mistakenly excluded. But in general, insurers are not excluding wide swathes of providers who would be willing to accept the reimbursement offered, because the insurers would have no reason to do that and every reason not to.</p>

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<p>And one of the issues behind this is, are all those docs really suffering some significant economic shock by compromising with the carriers? With respect:
“a Medical Group Management Association report using 2010 data, found that the average compensation for radiologists was $471,253 and for pediatricians it was $192,148, Kaiser Health News reports.”</p>

<p>For a long time, this thread argued what % of charges docs get reimbursed, that it was too low. But that focused on what they recoup based on what they charge. There needs to be some evaluation of whether what they charge is truly reflective.</p>

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<p>The only reason why this law hasn’t totally imploded or been rescinded is because at least 90% of the insured population has been exempted from the law due to waivers or delays unilaterally imposed by the govt. If Obamacare had been fully implemented on Jan 1 as originally contemplated, you would have seen a rebellion in the US, something on the order what France experienced during the reign of King Louis. Okay, that may be exaggeration but I can promise you if 30 or 40 million people had lost their insurance, all h*ll would have broken loose. If these narrow networks and huge fee increases for the unsubsidized non-grandfathered in the individual market had affected more people, I am sure this law would have been radically overhauled. </p>

<p>Although it is counterintuitive, I wish the entire dumb law had gone into effect for everyone (no exceptions) on Jan 1. Not only would it have forced changes to Obamacare, it would have surely punished the politicians responsible for this mess. </p>

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<p>I can see why a provider might not want to be included in a network if the compensation is too low, although my personal experience in a medical office indicates that the compensation would have to be extremely low for a provider to decline the opportunity to participate in the network. Most providers want to be in most networks,not least because if they are only in some networks, but not all, it falls to the front desk people to screen patients seeking appointments, which is difficult to do accurately and also turns the people in your office who should be drawing patients in into people turning them away. Most docs want more patients, not fewer, and are willing to accept a lower allowance for some patients who have Insurance A because they have lots of patients with Insurance B which has a higher fee schedule. And my experience also indicates that providers have no power to dictate what the insurance companies allow for whatever procedure code-- you either accept the fee schedule or you’re not in the network. </p>

<p>But where is the cost savings for the insurance company in narrowing the network? </p>

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<p>If the insurance company is able to negotiate a lower reimbursement with providers by excluding some providers who demand a higher reimbursement, then the insurance company will be able to offer lower premiums. And if the insurance company offers lower premiums, they will get more customers, and then they will make more money.</p>

<p>Edited to add: There is no cost savings to the insurance company (that I can think of) in narrowing networks just for the sake of having narrow networks. Moreover, in all the articles that detractors have posted about narrow networks, there are quotes from doctors or provider groups saying that they have declined to participate in some networks because the reimbursements are too low. So I think we are justified in concluding that the narrow networks are tied to lower reimbursement levels.</p>

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<p>Wellspring… again – NO insurance companies are trying to make their networks exclusive or “narrowing” it. What has happened in California is that the insurance companies are imposing more modest reimbursement allowances for their network providers. Many hospitals, facilities and providers don’t want to agree to the more modest rates. So then what the insurers do is is set the base rate they are willing to pay most providers, and then in order to provide an adequate network, they negotiate whatever higher rate they need to in order to bring in specialists or a surgery center or whatever piece is missing from their network-- but that doesn’t mean they are going to pay a higher rate for everyone. The insurers are “buyers” and they are buying what they can afford. </p>

<p>Where I live, a policy from Blue Shield costs more than a policy from Anthem, because Blue Shield includes the local Sutter hospital and its affiliated practice groups, and Anthem doesn’t. So I pay +$50 a month for a policy that lets me go to the hospital I want - with Anthem I could only go to the Catholic hospital, which is not as good and also has much longer wait times for services.</p>

<p>But Anthem probably sells more policies precisely because it can offer a lower cost premium (and because it managed to make it very difficult for policy-buyers to determine who was in their network, something that might not entirely have been an accident). </p>

<p>My own doctor doesn’t want to take the new policy because in the past, as an “in-network” doctor, if she billed $150 for a visit the insurance company paid her $117. Now the new policy wants to pay her less – I don’t know how much less, but let’s say hypothetically that they want to pay her $105. As an out of network doctor, she gets paid the “usual and customary” rate – which actually is a little bit better than the negotiated rate ($122) – so she benefits by being out of network. (I’m getting these numbers by looking at a billing statement from my doctor, so they are real numbers.) So why should my doctor take the new policy? She’s better off just accepting “UCR” from my insurance. She’s only one doctor in a sole practice – and she is busy enough - so she isn’t going to worry if she loses a couple of patients along the way. And since my doctor’s billings for routine care are only a small fraction of my deductible, I don’t have all that much motivation to change. </p>

<p>It’s a different issue for larger medical groups – but there are plenty of patients to go around. It is better for them to negotiate the best rate they can with a given insurance company. So if I change doctors, I’ll go with the group that accepts Blue Shield but not Anthem … because I have BS. That group is happy - they are getting lots of new BS customers. Meanwhile, Anthem does whatever negotiating it needs to do with different providers who are willing to work with them.</p>

<p>This is NOT a new thing. People who have employer coverage have had this network issue for years – large employers who are footing the bill to insure hundreds or thousands of employees are very cost conscious. </p>

<p>That’s why we have Kaiser in California. Most people I know with employer coverage have Kaiser. This is true now and it was true in 1970 when I first moved to California. Their employers chose Kaiser because Kaiser offered them better rates. Kaiser is by definition a restricted network. </p>

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<p>“This is NOT a new thing. People who have employer coverage have had this network issue for years – large employers who are footing the bill to insure hundreds or thousands of employees are very cost conscious.”</p>

<p>This is BS. I have employer coverage and it covers almost every doctor and hospital in Ca and even outside Ca. Same was true for my individual coverage prior to Obamacare.</p>

<p>What I find interesting is how many here love to theorize about this issue of networks, but I actually had individual insurance prior to Obamacare, lost my policy because of Obamacare and now have group insurance. Unlike the people who have all kinds of theories regarding this issue, I actually spent countless hours investigating the networks by calling hospitals, doctors and insurance companies. I actually was speaking to high level executives of the insurance companies, not the customer agents who know diddly. People can say whatever they want but the networks for individual insurance are radically different from what it use to be.</p>

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<p>Oh, FGS, it’s not new. Google. The % of employer plans going with narrowed networks has been increasing every year. Again, this isn’t only about YOU and YOUR plan.</p>

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<p>Google. LOL. This is the problem with some of you. OMG. I can’t stop laughing. This thread is addictive.</p>

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<p>GP, it’s not BS. In my most recent post I referred to the fact that my H’s network of available providers was much smaller than mine. His “insurer” (BCBS) was really just acting as third party administrator, and in fact his employer was self-insuring everything behind the scenes. His choice of docs was restricted far more than mine. </p>

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<p>I know life is difficult for you, Flossy, and you have trouble finding out the facts about narrow networks.</p>

<p>Here, let me Google it for you:</p>

<p>A 2012 article in Managed Care magazine reports:

<a href=“Sitemap - Managedcaremag.com”>http://www.managedcaremag.com/archives/1202/1202.narrow_networks.html&lt;/a&gt;&lt;/p&gt;

<p>A 2011 article from the LA Times:

<a href=“A shift toward smaller health insurance networks”>http://articles.latimes.com/2011/apr/03/business/la-fi-cheaper-insurance-20110402&lt;/a&gt;&lt;/p&gt;

<p>Again from Managed Care magazine, this time from 2011]:

<a href=“http://managedhealthcareexecutive.modernmedicine.com/managed-healthcare-executive/news/return-narrow-network?page=full#sthash.LLesE35B.dpuf”>http://managedhealthcareexecutive.modernmedicine.com/managed-healthcare-executive/news/return-narrow-network?page=full#sthash.LLesE35B.dpuf&lt;/a&gt;&lt;/p&gt;

<p>The BS here is being served to us by GP, who seems to believe that if it didn’t happen to him, it can’t possibly have happened to anyone else. He is mistaken, as these three articles, and the many other ones you would find it you bothered to use Google, can attest to.</p>

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<p>Yup, that’s googling.
Flossy, if you’re saying your crystal ball is good enough, we win and the argument is done. You can predict the lottery and not worry about healthcare costs.</p>

<p>Also, CF:
“…the percentage of employers offering a high performance or tiered network option nationally increased from 16% in 2010 to 20% in 2011. The change was most dramatic in the West where employer health plans, including a high performance option, more than doubled between 2007 and 2011 from 13% to 33%, with most of the increase coming in the last year.” (Pre-2013.)</p>

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<p>No, Lf I don’t have a crystal ball. I think that was LasMa. But, if you are now saying that Obamacare isn’t shrinking networks that’s just denying a very well-accepted reality. I know what Googling is , thank-you. But, it’s not healthy when it becomes a virtual reality. imho.</p>

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<p>So then the articles are wrong, Flossy? Articles published in 2011 which say that 33% of employers in the West were offering narrow networks at that time-- those articles are wrong? </p>

<p>We are saying that insurers are narrowing networks because buyers, whether individual buyers or corporate buyers, prefer narrower, cheaper networks to wider, more expensive networks. And we are saying, and providing evidence, that this was already true before Obamacare. People like to save money. Businesses buying insurance for employees like to spend less money buying insurance for employees. If there were no ACA, insurers would still be offering narrow networks because people want them, though the ACA is accelerating the trend in the individual market.</p>

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<p>Yes, if googling were part of your info gathering, you would see plenty of analyst commentary that this is not a new ACA phenomenon. But we realize that each time we point out what happened pre-ACA, some can’t believe it. And, that GP didn’t experience it, as if that was the litmus test.</p>

<p>How many doctors do you folks need on your list? </p>