Affordable Care Act Scene 2 - Insurance Premiums

TatinG · April 28, 2014, 12:48am

“Narrow” is undefined. I don think most employers narrow networks are as narrow as those in ACA. If they were, then the press has completely overlooked it.

Narrow also isn’t just numbers. Narrow means excluding the hospitals that treat cancer, as many of the top cancer hospitals are not covered because they are expensive. Narrow means paying the doctor less with the premise that by squeezing more patients into his practice, he can make up the difference by volume. Shorter visits or seeing a physicians assistant or NP instead of the MD.

calmom · April 28, 2014, 1:04am

TatinG, most big hospitals treat cancer. There are two hospitals near me - one is the Catholic hospital, and one is the Sutter hospital. Both have oncologists and cancer treatment facilities.

Goldenpooch · April 28, 2014, 1:32am

“TatinG, most big hospitals treat cancer.”

Yeah, all hospitals are equally good treating all kinds of cancer. You must still believe in Santa Claus.

The googling by CF is not saying what she thinks it is saying. Many employers offer both PPO and HMO plans and allow employees to choose. Yes, more companies are now offering a HMO option, which they might not have done before. Everybody I know who has a group plan also has a PPO option, just like CF who for some reason doesn’t know her deductible or out-of pocket maximum.

If anybody thinks Blue Shield of Ca doesn’t have a great network for its employer plans or its grandfathered plans, check out the Shield Savings network. Instead of googling, try taking a look at what is really happening.

TatinG · April 28, 2014, 1:52am

Your experience may vary of course. But two of my friends have had serious, rare cancers. One required brain surgery to remove a malignancy. One required surgery on the face with it’s many delicate nerves and muscles and the possibility of being severely disfigured as a result. Both went to the major teaching hospitals. An acquaintance recently had a return of breast cancer. Again, the major teaching hospital with the national reputation. Another friend had a kidney transplant. Same major hospital. Another friend had ovarian cancer. Same.

We have a fine community hospital here. It’s well regarded. But…

Cardinal_Fang · April 28, 2014, 2:55am

And… you are about to supply us with evidence that your friends with the rare conditions would not have been able to go out of network to see their specialists? No? You aren’t about to supply us with that evidence because it doesn’t exist?

Perhaps I should mention here that the ACA mandates that every subscriber has the right to appeal, to an outside expert, any denial of care. In California, typically subscribers win about half of such appeals.
<a href=“http://www.capradio.org/articles/2014/04/01/patients-win-about-half-the-time-they-challenge-denied-health-care-services/”>Error;

I don’t know what the “right” ratio of denials to approvals ought to be, but definitely there are demanding nutcases out there who ought to be denied their cockamamie demands. Likewise, there are clearly people who ought to get the care they have been denied.

Cardinal_Fang · April 28, 2014, 3:07am

Gimme a break. Now your story is that people who get cancer and who bought an individual policy can’t get their cancer treated? “Hospitals that treat cancer” is another way to say “hospitals.” To a first approximation, they all treat cancer! So a network that excludes hospitals that treat cancer is a network that has no hospitals.

Name one single network in the United States that has no hospitals that treat cancer. Name just one. One single example of an insurance policy that was sold that has no hospitals that treat cancer. I have $25 right now sitting here that goes to the favorite charity of the first person who comes up with an example of an individual 2014 insurance policy* sold in the US that does not cover any hospitals that treat cancer. Put up or shut up.

*ACA-conforming. Minimeds and other phony “insurance” don’t count.

LasMa · April 28, 2014, 3:34am

Pretty sure your $25 is safe, Fang. ;)

calmom · April 28, 2014, 3:47am

Here’s how insurance used to work (a long time ago, when the world and I were young)

There were no networks.

To buy insurance as an individual, you would contact an insurance agent and fill out long,detailed form with your medical history, and usually also get a brief medical exam. After a few weeks you would find out if the company had deemed you healthy enough to buy insurance.

The insurance had a deductible,and also a maximum annual payout amount, as well as a maximum lifetime payout. So perhaps your policy would have a $200 deductible, $20,000 annual max, $100K lifetime maximum. The maximum was the total amount the insurance company would ever pay.

The policy would be written so that the insured person would be responsible for all amounts up to the deductible; after the deductible, typically the insurance company would pay 70-80% of charges, and the insured will pay the rest – up to the policy annual maximum, at which point the insurance would stop paying.

There was no such thing as a copay. You would go to the doctor or hospital,and then when the bill arrived, you would pay it. At the same time you would make a photocopy of the bill, and send it off to the insurance company along with a claim form. If you were lucky, the claim would be processed in 6-8 weeks, and the insurance company would send you a check. The check wouldn’t be for the full amount of the bill you had already paid, of course – instead the insurance company would go over each item on the bill, decide what was necessary and covered under the policy, then decide the customary rate for each item, subtract out your deductible, and pay you its percentage (say 80%) of the part remaining that it had approved.

If you weren’t so lucky the process could take months or your claim could be denied entirely, often for trivial reasons related to the paperwork. For example, there generally was a time limit for submitting your claim and if the claim was submitted after that time had passed, you were out of luck.

If you had been in the hospital for a few days, then generally there would be a whole lot of items on the bill that wouldn’t be approved.

It was kind of like a box of chocolates.

You never knew what you were going to get.

(Stay tuned for part 2):

calmom · April 28, 2014, 4:39am

Part 2: the HMO.

Somewhere along the line, the HMO was invented.

The appeal of the HMO was that it was sort of a pre-paid medical plan.

Instead of paying the bills as they came in, submitting claims, and hoping to eventually receive an insurance check partially reimbursing the costs, HMO members could just go to a facility or provider within their HMO and pay a small copay (say, $20) for the services provided.

The advantage of the HMO was that the insured no longer had to pay up front for medical services, submit claims, and wait for reimbursement. Copays were low, and everything else was pretty much covered.

The disadvantage was the insured could only see doctors who were on the HMO plan–and further was required to work through the primary care provider. If the patient wanted care from a specialist, the procedure was to first see the primary doctor, who would in turn determine whether specialist care was warranted, and then make a referral to another HMO doctor.

So with the HMO, costs were controlled for both patient and insurance company… but the patient was pretty much deprived of all choice, except for the limited choice of primary provider.

calmom · April 28, 2014, 5:03am

More history… Part 3:

Enter the PPO.

The PPO began as something of a hybrid between regular insurance and the HMO. Like regular indemnity insurance, the insured could choose any doctor, but an incentive was added to see a doctor within a smaller, select group (i.e., the “network”), with the benefits of the HMO: the services could be obtained with a small copay, and the network provider would accept payment directly from the insurance company.

Or the patient could see any other doctor, pay directly, submit a claim to the insurance company, and wait for partial reimbursement based on whatever the insurance company deemed appropriate.

Originally the new networks (with names such as “Prudent Buyer”) were fairly small, but the incentive to use them was pretty high.

In turn, that created a very powerful incentive for doctors and hospital to join the network-- since that’s where all the patients were going. The insurance companies didn’t mind – since the whole benefit of the network to them was that the doctors agree to accept the rates they set. So the networks grew, and eventually patients who bought PPO’s in many areas got used to the fact that just about everyone was in network.

Except, of course, the people who couldn’t get insurance, because they were too sick.

calmom · April 28, 2014, 5:15am

Part 4: Obamacare.

Along comes ACA and three new rules:

Rule #1. The insurance companies have to take all comers. Even sick people.
Rule #2: There is no such thing as a maximum benefit. Insurance companies have to pay all costs that the sickest patients incur.
Rule #3: Insurance will be sold on a public exchange, where buyers can easily compare rates.

So now the insurance companies have a problem: they need to figure out a way to absorb all those sick people, and still set premium rates at a competitive level. If they set their rates too high, they will lose customers to other companies.

The obvious solution: reduce the rate of reimbursement to network providers. After all, with all the new sick pick people getting insurance, the providers are sure to have more patients – so they should be able to handle a slight reduction in pay.

Of course, the providers think otherwise: the last thing they want is less money.

So some of them balk: they say,if they can’t get paid the same rate as before, they are quitting the network. So the insurance policy networks revert to something like they were when the whole PPO idea came into being in the mid-1980’s… that is, they get smaller.

So that’s about where we are now: PPO plans that are just about the same as they were when the idea first took hold, only the premiums and deductibles are way higher,and the insurance companies have to cover a lot more, without upper limits, and without the ability to pick and choose who they want to insure.

Goldenpooch · April 28, 2014, 5:44am

"To buy insurance as an individual, you would contact an insurance agent and fill out long,detailed form with your medical history, and usually also get a brief medical exam. After a few weeks you would find out if the company had deemed you healthy enough to buy insurance.

The insurance had a deductible,and also a maximum annual payout amount, as well as a maximum lifetime payout. So perhaps your policy would have a $200 deductible, $20,000 annual max, $100K lifetime maximum. The maximum was the total amount the insurance company would ever pay."

How far back are you going? I have been buying individual insurance since 1992 and it was never like this. Never once was I made to get a medical exam or submit medical records and never had a lifetime maximum less than $5 million or any annual maximums. Before then, I was insured through various employers. I do remember indemnity insurance where you could go anywhere. But never remember any lifetime maximums of $100K.

CF, I don’t know who said narrow means excluding hospitals that treat cancers, but whoever it is probably meant getting the most advanced, state of the art care for the most difficult cancers to treat.

Goldenpooch · April 28, 2014, 5:56am

Here is what Tatin said:

“Narrow means excluding the hospitals that treat cancer, as many of the top cancer hospitals are not covered because they are expensive.”

CF, leaving out the second half of the sentence changes the meaning of the sentence. You don’t have to stoop to deceptive tactics to make an absurd point.

lookingforward · April 28, 2014, 6:53am

Following calmom- and in the interim since the 80’s-90’s, the first HMOs, the cost of medical care grew to outrageous proportions, with little broad oversight. It drew complaints, increasing attention from watchdogs, but no wide, effective resolution. Jump ahead to 2008, when individuals and businesses got squeezed, nearly everyone (individuals, communities and businesses) lost something, somehow, and recognized the ongoing threats. More general insecurity, including, but not limited to, jobs, income and financial stability, the housing crisis, public services, and the risk that you couldn’t afford to pay, one way or another, for medical care.

When we talk about reduced networks, people look through the wrong end of the scope. You feel you had all the care you needed before, not realizing it could be a designed “choice.” A virtual choice, sometimes an illusion of choice. You’d say, “I have Plan X” and the doctor’s office would either say, “Yes, we take that” or “No, we don’t.” My friend on one plan couldn’t get physical therapy beyond X visits, without rigmarole. I could, on another plan. His co-pay for that was 3+ times what mine was. When D2 needed counseling, the first question was, “What insurance do you have?” That provider didn’t take all of them. A friend with cancer had annual caps on what the insurer would pay. My brother’s plan wouldn’t cover injuries in certain higher risks situations or if the insurer decided an injury was “his fault.” When my co-worker found out she was pregnant, she wasn’t covered. These were broad differences in the various plans out there. All GP can say is, well here’s how “mine” worked. Well, not all of them were his plan. He got what he needed, fortunately, but without realizing it was not the same for the next guy. His ease, in a sense, may have mislead him to how it was, across the board.

The difference in the old managed care and today’s “narrowed networks” is a growing emphasis (and I know some will delight to question this) on not just the old, original HMO cost containment sensitivity but paired with excellence of care. A two-pack. Folks can just go google on that (but I am pretty sure my googling fellow posters have already seen it.)

Funny comment about not stooping to deceptive tactics. I’d add, stooping to deceptive reasoning. We’re not making this stuff up, Flossy. We’re finding the detail you LOL about.

Goldenpooch · April 28, 2014, 7:29am

“His ease, in a sense, may have mislead him to how it was, across the board.”

I’m sure your encyclopedic knowledge of this topic gives you broad license to tell us how it was across the board.

"or if the insurer decided an injury was “his fault.”

I doubt very much there were many health insurance policies (if any) where people were denied coverage because of an accident that was their fault. Anyone can dredge up outlier examples that affected very few people to justify the indefensible, namely Obamacare.

Goldenpooch · April 28, 2014, 7:51am

At least the debate here regarding Obamacare is not totally idiotic. In my local online newspaper, there were a number of posters who insisted that every policy that was cancelled were all substandard or junk. When I tried to tell them that if your policy did not predate March 2010 it was cancelled regardless of what was in it, I was accused of lying. These people were so brainwashed by our current President and his minions, they were absolutely sure what they were saying was true. I guess they figured if the president told them it was true, it must be true.

lookingforward · April 28, 2014, 7:59am

Fault was common. It was written into some of my own policies, too. You either didn’t have that or didn’t notice. What you keep doing GP- is telling us how it was for you. Not all policies were the same. Can’t you acknowledge that? We keep mentioning all the ways insurers held an ax over people’s heads and you think it wasn’t so.

Goldenpooch · April 28, 2014, 8:24am

“Fault was common. It was written into some of my own policies, too.”

Are you sure you’re not referring to auto insurance. I have never heard of health insurance where fault was an issue. I have heard of accident insurance supplementing a major medical policy. Even those policies don’t refuse coverage if you are at fault. I really don’t know what you’re talking about.

lookingforward · April 28, 2014, 8:26am

You never heard of it. That’s all.

Goldenpooch · April 28, 2014, 8:30am

No, when you say something that is extremely improbable, you have a responsibility to prove it is true.

Affordable Care Act Scene 2 - Insurance Premiums

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