Affordable Care Act Scene 2 - Insurance Premiums

Parent Cafe
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<p>I literally do! Our entire Sundays were spent going from one grocery store to another and standing in lines to get whatever they were selling (and then hauling all bags home - no car). I was lucky growing up in Moscow. At least there was something to stand in line for. The rest of the country was starving.</p>

<p>Anyway, something kind of funny happened today at work. Today is the first day of enrollment period at my work to sign up for 2014 benefits. The corporate HR sent us email reminding to sign up. However, when I tried to do that, it turned out the site was down (and is still not up)- which was very reminiscent of health care exchange roll out.</p>

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<p>I would shop around as much as possible, poetgrl. That sounds like an absolutely terrible deal, and maybe you can find something better. Of course, many that are benefitting couldn’t care one bit if your insurance goes up times 100…plus, this script is written to make sure the insurance companies get their exorbitant profits. </p>

<p>If it makes you feel better, we just re-enrolled in our insurance and the price looks about the same, but the benefits appear even better. Plus, I get to keep my son on the insurance. Of course, the company is trying to negotiate that insurance away if they can. I guess none of that helps. Sorry. At least the weak economy might be helping your stocks?</p>

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<p>CF, You get some of us wrong. I don’t mind paying more, either. I just don’t think what I pay goes mostly to sick people. It’s eaten up by bureaucracy and health industry. Just look at how the website is working/not working. Bureaucarts gave programmers deadmilnes and expected that will do it. Verifying subsidies, enforcing 85% rule. It all sounds to me nightmarish. Besides, why 85% rule? If it’s business, shouldn’t they lose money in some years or if they losed up?</p>

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<p>Iglooo, what you pay in premiums goes to buy a health insurance policy from a private business, the insurance company. The exchanges are not funded from your insurance premiums; they are funded from your taxes.</p>

<p>The rule about 85% is a minimum. That is, a minimum of 85% of your premium has to go to health care. But there’s no maximum. There is no protection for the insurance company if they price the policy too low. That is, if the insurance company ends up paying 110% of premiums for health care costs because their actuaries misestimated, they’re just out of luck.</p>

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<p>Poetgrl, I too think shopping around is a good idea. I can’t remember whether the prices you quoted are what your insurance company is asking to renew your current policy, or the best policy you’ve found by shopping around, but if it’s the former, I’ve heard anecdotally that insurance companies are jacking up premiums sky-high on current policies to drive people to change policies. </p>

<p>OTOH, in the areas of California where the people live (Los Angeles, SF Bay area, Sacramento, and San Diego I think) premiums really are very very high. So there might be no better deal to be found.</p>

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<p>And it doesn’t make you uneasy that actuaries price 20% of our economy?</p>

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<p>Igloo, I agree with your overall point. I do want to mention that a lot of people talk about healthcare being 16-20% of the American economy. However, pharmaceutical companies comprise a very big chunk of this number, and pharma is not really subjected to price restrictions etc. The insurance and provider side of healthcare is materially less than 16-20 % of our economy.</p>

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<p>Private insurance isn’t 20% of our economy. Private insurance pays about a third of all health costs; the rest is mostly Medicare, Medicaid and out-of-pocket.</p>

<p>And actuaries were already pricing health insurance for the majority of people under 65, because the majority of people under 65 already had insurance before ACA.</p>

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<p>Hayden, I think you are double-counting when you try to count pharma and insurance separately. Iglooo is talking about the price of health insurance premiums. That includes some pharma, because health insurance pays for drugs.</p>

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<p>After all of the researching of a new health plan for our small business (less than 5 employees), choosing one, and starting it as of Oct. 1st., we received a letter in the mail from our new insurance plan that of December 31, our small business plan is being discontinued because of the ACA. I’ve had it!</p>

<p>The choices available (small business plans) on Marketplace website suck. None of them are any good for where we live. They would be fine if we lived about a 2 hour drive from here, but that’s going to happen. None of local doctors nor hospitals are partnered up with the limited plans available for small businesses on the website. Once again, we’re stuck having to do another stressful round of research for a new health insurance and pick/sign up for one before Dec. 31st.</p>

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<p>No, that’s not what I’m talking about, CF. During the run up to Obamacare, a lot of people referred to healthcare overall as being 15-20 percent of the US economy. This is the number I’m trying to clarify. </p>

<p>It’s hard to use insurance premium as a basis for understanding the healthcare spend in the US, since in addition to insurance premiums and Medicare/Medicaid, there is also self-pay and non-pay. Therefore, the statistic we usually use is the amount of money spent on actual care, regardless of payment source. </p>

<p>In 2010, healthcare took 17.9% of the GDP. Of that 17.9%, 51% went to hospitals, physicians and clinics. 10% went to pharmaceuticals and drugs, with the rest split among areas such as nursing homes, continuing care communities, insurance companies, etc.</p>

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<p>Thats a potential issue. We have these new risk pools that cant be quantified. For this month at least the only people who are going to go through the aggravation to sign up are the ones who really need/plan on using insurance. </p>

<p>Thats why most of the major players are staying out or the market places or limiting their exposure. The other tactic is to make the networks restrictive to control costs.</p>

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<p>Poetgrl, what state are you in? I believe that ehealth.com has all plans listed with pricing information & is very easy and quick to navigate. So you may find that another company is now selling something in your area that is less expensive.</p>

<p>I am assuming that your are sure that you are not eligible for subsidies? (If you think you might be you can use the calculator the Kaiser foundation web site to figure out what your post-subsidy premium would be). If so, keep in mind that the ACA “penalty” only applies if you have an affordable option - that is, only if the premium for the lowest cost Bronze plan in your region is less than 8% of your income. Obviously you do want insurance, but that might open up some options for you-- you definitely could choose catastrophic only coverage if you want. </p>

<p>Finally, do you have or have you considered an HSA? If your coverage is going up because you have had a small deductible in the past – and now you are feeling intimidated by the higher deductibles - keep in mind that the cost of the deductible is built into the premiums for the higher plans. </p>

<p>So it feels better somehow to not have to worry about a high deductible, but the fact is that you are paying 80% or more of that deductible out-of-pocket with the premium dollars. If you expect to run up the deductible anyway, it doesn’t make much of a difference. But if you usually don’t come anywhere near to the deductible, and you have some assets or discretionary income that you can bank – then you are probably going to benefit with an HSA.</p>

<p>With an HSA, you buy the high deductible insurance policy. At the same time, you also open up a tax-sheltered HSA account. (On your own - you can choose the bank or investment service where you want to create the account ). If you are able to do so, deposit the maximum allowed per year to your HSA as soon as you open the account, which will be $6550 for a family in 2014. You don’t have to do that – you can fund your account any time during the year – but depositing the money early will maximize interest and reduce any account fees. The full amount of your deposit is an above-the-line tax deduction-- whether or not you end up spending the money on medical expenses. You will get a checkbook and a debit card that you can use for any qualified medical expenses, whether or not it is the type of thing your insurance would cover – for example, I use my HSA mostly for dental expenses, even though I don’t have dental insurance. </p>

<p>(If you already know all this stuff – excuse me – I don’t mean to be patronizing, but I am thinking that even if you know, maybe there is someone else reading this thread who doesn’t know how HSA’s work).</p>

<p>You can’t withdraw or spend the HSA money without penalty for anything other than medical expenses – but you can have it in an interest bearing account or an investment account. I alway looked at it as a situation where I could pay 100% of a high insurance premium to my insurance company, or I could pay the company a smaller premium and pay the difference to myself instead. </p>

<p>Also, keep in mind that with ACA, all of the policies are charging a per-person rate – so if your family does not qualify for subsidies, there is no particular benefit to having everyone on the same policy, other than the increases to deductible or out-of-pocket maximums if everyone has their own policy. But if you are paying for insurance for your kids, you might find that it is more cost-effective for to go with different policies for them than for the adults. </p>

<p>I understand the financial issues as I am in the same boat, but I think you may find that you have more flexibility now. It’s nice to know that if you opt for a high deductible this year, and then someone in your family gets sick, you haven’t forever locked yourself out the prospect of a better plan. That is, the unexpected illness that is diagnosed in 2014 won’t be a pre-existing condition that will prevent a change of policy during the next open enrollment period.</p>

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<p>NYsmile – that is messed up and the insurance company is 100% to blame – they had to know when they were talking to you about the plan that it wouldn’t be continued.</p>

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<p>Poetgrl, definitely no subsidy for me.</p>

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<p>Calmom. I don’t need to put any more money towards health care. </p>

<p>I know you are having a hard time understanding my situation. But we are exactly who is expected to fund this. </p>

<p>I just thought it would only be thru my taxes. Not through my insurance company too. I misunderstood how much of that 15% profit I personally would need to supply each year for the next 20 years. </p>

<p>Ce la vie.</p>

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<p>Just a word of caution to others: you can buy the same exact policies for the same premiums directly from the companies, but those policies are NOT eligible for the income-based tax credit or advance subsidy. If you think you are or may be eligible for the tax credit (household income 400% of FPL or less) – then the policies need to be purchased directly from the exchanges.</p>

<p>Some, but not all, insurance companies will actually do this for you if you ask – I know that Blue Shield will NOT do this in California, but I think that Anthem will – but I think that IF you are or may be subsidy eligible, it’s probably best if you have created your own account on the exchange web site, so that you will be able to log in an update income information on your own as needed. </p>

<p>Yeah, I know, the site doesn’t work… but it WILL work in the future. </p>

<p>I am personally extremely frustrated at the level of incompetence in site design and programming that produced this mess, but I’m also quite confident that it will be fixed. The deadline for signing up for insurance for Jan 1 coverage is Dec. 15th - so I don’t think any of us need to start freaking out before mid-November. </p>

<p>(I’ve got an account set up for myself at Covered California, but Anthem still is taking its time figuring out who is on their network – I have no direct evidence, but I’m pretty sure that behind the scenes they are still rejiggering things and finalizing contracts, as there is no good reason that the info would not otherwise available – but in the end I might just pay the extra $50/month that BS wants for an identical policy simply because I am finding it such a pain to deal with Anthem. )</p>

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<p>You confidence is admirable, but so far, not so good around here. It’s a little worrisome.</p>

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<p>Calmom re/ HSA: don’t you lose the money if you don’t spend it in the year and a half after you invest it? This has caused us to balk…but w/ ACA we are considering doing it for various known expenses (chiropractic, med’s). From your explanation it appears you don’t have to go through an employer? DH and I are now private contractors and do not have corporations set up so no salaries. We can contact our investment house to set one up privately?</p>

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<p>Calmom, Actually the insurance agency was as surprised as we were. Here’s a copy of email I received from them (after I shot them an email about the discontinuation letter I received today).</p>

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<p>Here’s the email from the agency,</p>

<p>Can you please email or fax that letter to me because I need to check into this…you are not required to come off of that plan until September of 2014, which will be your natural anniversary date. You can stay on for one year since we had you enrolled before year’s end. We have found that EVERY single plan in New York state is being discontinued. Every carrier, every single plan. Not one of our clients will keep their plans…many switching automatically at January 1 and many being “mapped” into plans without any input from the family that actually pays for the insurance…but with a chance to rearrange into a new policy if it’s not suitable.</p>

<p>2014 is going to be one heck of a year for health insurance!</p>

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<p>So, there you have it. I guess what Pres. Obama said about keeping your plan if you’re happy with it isn’t true. While the insurance agency was under the impression (as per his email response to me) that we could remain on the plan, it appears in the letter from Emblem that this is not the case. Dec. 31st, the policy will be discontinued.</p>