News Questions Congress should ask Sibelius.

[Locrian]

There are lots of misconceptions associated with comparing pre- and post-2014 premiums. Whether one comes to the conclusion that premiums have gone up or down seems to depend mostly on one's political point of view.

Imagine this example:

• In 2013 there are three car models, priced 15k, 20k, and 25k.
• It comes out that in 2014, all three models will have their cost go up by 30%, but a new, stripped down car will be offered for $12,500.

Did car costs go up or down? It's hard to say until we know which models people will purchase and whether they liked them enough to purchase them again.

• If people find the new, stripped down car perfectly functional and significant numbers buy it in 2014 and 2015, then we can probably say prices went down.
• If no one buys the cheap one, prices went up.
• If some people buy the cheap one in 2014, but hate it and no one does in 2015 then prices went down in 2014, and have a large jump in 2015.

Something similar has happened with individual health insurance premiums. Overall, PPO/HMO plans with similar attributes to those pre-2014 are more expensive than they were before (though how much differes HEAVILY on what state you're looking at). However, at least one major insurer has introduced plans with stripped down networks. They're sufficient, but they exclude many providers and hospitals that people in those cities are used to going to. The company used this leverage to bring down provider prices and significantly undercut the competition.

Do these thin-network plans represent savings? Absolutely, they could, if people are satisfied with the result. If people try it and bail in 2015, then savings will have been short lived.

To determine the impact of the ACA on premiums we need two critical pieces of information:

Small Group & Individual enrollment.
Small Group & Individual block emerging claims experience.

We'll have enrollment in early 2014, and claims by early 2015.

Beware making judgements prior to having that information.

Some other considerations:

• If people are buying plans with higher deductibles/copays, their premium may go down, but their total spending could either go up or down.
• If people buy plans with higher deductibles and do not have the cash to pay those deductibles, health spending will go down in the short term, but health outcomes may get worse.
• Because individual and small group members are now in a single risk pool, it is possible rates for individuals go down and small group member's rates go up.
• There is a lot of confusion between premium rates and after-subsidy rates - the rate someone pays after their subsidy is not the plan premium.
• As I mentioned, the impact on the individual market differs hugely by state.
• Because the new age curves result in the young subsidizing the old, be careful what age you're comparing rates at; older individuals are more likely to come to the conclusion that rates have gone down, when it is a localized effect.

 

[mheslep]

...

The above two quotes are based on a non-smoking 55 year old single male making $20,000 per year.

If I raise the income to $200,000 per year, I get the actual, non-tax credit prices:
Low: $276
High: $634
These prices seem fairly reasonable.

Ha! I love opinion's. They can be so funny. Bolding mine.

This one was published in the WSJ in January.Boogymancare 1, Matthews & Litow 0

...

To tally the score I think you would need the before ACA price. Apparently it was $140 for the lowest cost plan for a 55 year old in Oregon, now $276, i.e. a near 100% increase.

 

[turbo]

To tally the score I think you would need the before ACA price. Apparently it was $140 for the lowest cost plan for a 55 year old in Oregon, now $276, i.e. a near 100% increase.

Does that include the Fed rebate, or not?

 

[Locrian]

Having said that, there are some definite successes in the list of state exchanges.

Did I http://www.reuters.com/article/2013/10/28/us-usa-healthcare-idUSBRE99Q0DH20131028?

 

[SteamKing]

The ACA is a complex undertaking, no question about it. The law alone is more than 2500 pages and there are currently more than 12000 additional pages of regulations which have been generated as a result. The provisions of the law are still currently being litigated in various courts and may wind up for review before the Supreme Court again. Portions of the law have been suspended from implementation by the Administration (read Employer Mandate for 2014). On top of all this, trying to write a software system which puts all of this in motion so that Joe and Jane American can purchase insurance is quite a daunting prospect. And then there will be the inevitable computer shut downs due to mechanical failure, power loss, natural disaster, whatever, which will throw random monkey wrenches into the system. All of this assumes that in future years, Congress will not pass additional health care legislation, which probability is vanishingly small once the system is running.

It was once said that being Secretary of Defense was an almost impossible job to fill due to the size of the department itself and the critical nature of its proper functioning from day to day. Sec. Sebelius is finding out that being Sec. of HHS will soon eclipse the scope of the duties of the Sec. Def., if it already hasn't. Being President will not nearly be as stressful a job as being Sec. of HHS in the future, IMO.

 

[Office_Shredder]

On top of all this, trying to write a software system which puts all of this in motion so that Joe and Jane American can purchase insurance is quite a daunting prospect.

This statement doesn't seem to be particularly true to me. I have been able to get quotes from car insurance companies online for years now; health insurance is more complicated but not that much more complicated.

 

[SteamKing]

Your car insurance quote is not trying to check various federal databases to make sure you are entering accurate data. Basically, the insurance company wants to know what make, model and year car you drive, your sex, your age, and where you live. If you provide false info to the insurance company, you'll wind up with a canceled policy if they find out. If you provide false info on healthcare.gov to get health insurance, you might be liable to pay some fines or reimburse the gov't for improperly obtained tax credits. With the IRS administering portions of the law, you might get hit with a perjury charge.

It's like this article says, healthcare.gov is more than just a website:

http://www.dailykos.com/story/2013/10/21/1249417/-Healthcare-gov-isn-t-just-a-website-dagnabbit#

You will be sharing some pretty sensitive information during enrollment for health care coverage. How secure is this site? What happens if it gets hacked? What happens if your data falls into the wrong hands?

Would that healthcare.gov be as simple as amazon.com or esurance.com. The reality is, it is not.

 

[edward]

Both health insurance and car insurance companies share more about us than we realize.

My daughter in law's car was was hit in the rear and she was taken into emergency for x-rays and a concussion. At that point she did say that her injuries were due to a vehicle accident but at that time had no information on the driver at fault. My son arrived and gave the hospital their family health insurance information just to speed up the process.

Apparently hospitals get a bit anxious when they don't know to whom to send the bill.

Before my daughter in law even recovered from her severe headache her own auto insurance, Geico, called and asked for a statement.

She hadn't given the hospital the name of her auto insurance company.

Two days after the accident a private attorney called claiming he could take care of everything for her.

In case of a severe accident or illness where transport is needed the ambulance company also has your info. OPPs forgot, so do the Paramedics.

 

[edward]

Your car insurance quote is not trying to check various federal databases to make sure you are entering accurate data. Basically, the insurance company wants to know what make, model and year car you drive, your sex, your age, and where you live. If you provide false info to the insurance company, you'll wind up with a canceled policy if they find out. If you provide false info on healthcare.gov to get health insurance, you might be liable to pay some fines or reimburse the gov't for improperly obtained tax credits. With the IRS administering portions of the law, you might get hit with a perjury charge.

It's like this article says, healthcare.gov is more than just a website:

http://www.dailykos.com/story/2013/10/21/1249417/-Healthcare-gov-isn-t-just-a-website-dagnabbit#

You will be sharing some pretty sensitive information during enrollment for health care coverage. How secure is this site? What happens if it gets hacked? What happens if your data falls into the wrong hands?

Would that healthcare.gov be as simple as amazon.com or esurance.com. The reality is, it is not.

I presume sensitive information would include financial information. All of the credit agencies already have that, are they safe?

 

[Office_Shredder]

Your car insurance quote is not trying to check various federal databases to make sure you are entering accurate data. Basically, the insurance company wants to know what make, model and year car you drive, your sex, your age, and where you live. If you provide false info to the insurance company, you'll wind up with a canceled policy if they find out. If you provide false info on healthcare.gov to get health insurance, you might be liable to pay some fines or reimburse the gov't for improperly obtained tax credits. With the IRS administering portions of the law, you might get hit with a perjury charge.

If I go to esurance I can give them my name and address and they will look up my car for me. Then they ask me for my social security number and tell me that they cannot give me an accurate quote without it, because they use that number to look up credit information (where legal) and driving records. I didn't go past this point on their website because I'm not interested in buying car insurance and I felt the point was proven. They are looking things up and verifying information based on what you enter, they aren't taking your word for it. Why is it so much harder for health insurance companies to do this?

Amazon.com is going to have my credit card information on file, and esurance is going to have my social security number passed to them, what information are you giving to healthcare.gov that is so much more sensitive than these?

I don't know if healthcare.gov is trying to go above and beyond what esurance or amazon is doing from an IT standpoint - I don't know if it's true, and I don't know if it's not true. But I don't see how it is so far above and beyond that they are above reproach when they screw the pooch and fail to deliver on the goals that were set. It seems like they are doing a similar setup to what every e-business ever does: get information from the consumer, verify it, let them shop (and usually they let you shop before verifying your information). If it's really too hard to do on the fly for the information they need then they should have set up the system so that when you make an account, they spend 24 hours verifying your information after which you can shop or something, rather than the mess we have now. Or just trust that you tell the truth and verify after you pick your policy (which doesn't have to occur on the exchange level).

 

[SteamKing]

Well, it's too bad the healthcare.gov was a no-bid contract. If it had been handled thru normal bidding channels, you could have submitted a bid.

If you haven't figured it out already, dealing with the government at its easiest is about 10 times harder than dealing with the private sector. Everybody in govt. has some form to fill out in zintuplicate or some quota to meet. It matters not a whit to the govt. functionary you are dealing with if you get served today or next year. He can't get fired from his job. If you screw up at your private sector job, you can be shown the door anytime.

A lot of promises were made about all of this when ACA was being passed. At the time, nothing existed but 2000 pages of legislation. Now, realities are setting in, the promises have turned out to be vapor, and hard deadlines for implementation of a functioning system are fast approaching. All offers of delay of the individual mandate were haughtily dismissed by the Senate democrats during the recent budget negotiations. Some senators up for re-election in 2014 are reportedly considering support for delaying the individual mandate. Congress has already cut its deals about coverage for themselves and their staffs. They will not personally get hit with penalties for lacking coverage in 2014 and beyond because they are already covered and will not need to navigate the bowels of healthcare.gov.

It has already been suggested that healthcare.gov has swallowed more money than amazon.com and several other commercial websites required to get up and running.

 

[Vic Sandler]

This is the 28th unfortunate day for the ACA website. The site was down all day yesterday and a good part of today, but it is up now. I still can't log in. I called the 1-800 number and they told me they can't access my information even though it was input using the 1-800 number, not the website. That is, the problems with the website are not the only problems with the program as a whole. This time I got to speak to a supervisor, but it didn't do me any good. However, I was told that my case was being upgraded and that I would be receiving a call within 48 hours from a problem solving team that presumably has more effective tools at its disposal. I was also told that the 48 hour promise was not to be taken seriously and I shouldn't get upset if it were to take until Friday before they contact me.

 

[Vic Sandler]

The ACA is a complex undertaking, no question about it.

Let me be clear about this. After three and a half years of preparation and $600 million cost, I can't log in. That is not because of the 2500 page law or the 12000 page regulation. I am concerned, however, that once I do log in, problems related to the page count will commence.

The 2014 subsidy is based on your 2013 income, but the IRS only has your 2012 information, so what are they using it for? If they can access my records in the IRS database in order to see if I entered my information correctly, then why do they need me to enter my information at all? If you expect your 2014 income to be substantially different from 2013, then you can use your estimate of your 2014 income instead. I know this because the woman on the 1-800 line told me so and collected both my 2013 estimate and my 2014 estimate.

 

[Locrian]

The 2014 subsidy is based on your 2013 income,

To clarify, the 2014 subsidy is based on your 2014 income (and you note this, I think, in your second paragraph). Prior years' income will be used to help estimate what your subsidy should be in 2014.

However, if the estimate is wrong, it will show up in your taxes in April of 2015.

Edit: I think the rest of your post supports this, but I still think clarification for other readers is warranted.

 

[russ_watters]

Sure they can. It just takes a while. It's just as much a mistake to think the government cannot run a complicated program effectively as it is to expect them to run it effectively from day one.

Well certainly not every program fails, and I didn't mean to imply that if you read it that way, but some programs do fail. Governments like to think that since they lack profit motive; time, money and political will are infinite resources, but they aren't. Eventually, they run out and some programs fail. For example, the FAA's Advanced Automation System of the late 1980s and early 1990s:
https://www.google.com/url?sa=t&rct...nNsLL2wTsFGgMYDeA&sig2=mM2ichooQ55d2hgGcGyyYw

But it should be obvious that complexity and odds of success are inversely related to each other.

 

[Vic Sandler]

To clarify, the 2014 subsidy is based on your 2014 income.

If you want information about the ACA, you can call the 1-800 number. If you want correct information, call Locrian.

 

[Vic Sandler]

Today is unfortunate day 29, I have made no progress logging in. Here is an article that claims there was a window of opportunity for me to hack into my own account, but that the window is now closed.
http://money.cnn.com/2013/10/29/technology/obamacare-security/index.html?hpt=hp_t1

Here is an article that claims Obama knew we couldn't keep our existing insurance regardless of whether we liked it or not. His new line is that even though we can't keep the insurance we like, we will be able to replace it with insurance that he likes.
http://finance.yahoo.com/news/white-house-knew-millions-couldnt-101800242.html

 

[lisab]

Well, the ACA is quite clear that penalties (read taxes) are to be assessed for individuals who don't have coverage in calendar year 2014. <snip>

A penalty you pay for breaking the law is not the same as a tax.

You can easily avoid penalties, but no one can avoid taxes .

 

[russ_watters]

A penalty you pay for breaking the law is not the same as a tax.

You can easily avoid penalties, but no one can avoid taxes .

Sure, except for the fact that a federal penalty for not buying a commercial product/service would be unConstitutional. The administration sold it to the USSC as a tax and won on that argument:

Although the Supreme Court declared that the law could not have been upheld under an argument based on the regulatory power of Congress under the Commerce Clause, the Court declared that the legislatively-declared "penalty" was constitutional as a valid exercise of the Congressional power to tax, thus upholding the individual mandate.

http://en.wikipedia.org/wiki/Consti...on_and_Affordable_Care_Act#U.S._Supreme_Court

Personally, I agree with you.

 

[Vic Sandler]

The administration sold it to the USSC as a tax and won on that argument:

I don't know if the administration sold it in that fashion, but the next day they denied that the penalty was a tax.
http://abcnews.go.com/Politics/OTUS/white-house-roberts-obamacare-mandate-penalty-tax/story?id=16679772

White House: Sorry, Roberts, Obamacare mandate is a penalty, not a tax

The dateline of the story is June 29, 2012, and the date of the USSC decision was June 28, 2012 according to your link.

 

[SteamKing]

People and corporations avoid taxes every day. That's why tax attorneys and tax accountants were invented (and profiting quite handsomely from helping people and corporations avoid taxes).

http://bgr.com/2013/10/29/google-facebook-linkedin-tax-dodging/

People don't take trips to the Caribbean just to lay on the beach, nor do they go to Ireland just to pick up a superior piece of lace.

 

[russ_watters]

I don't know if the administration sold it in that fashion, but the next day they denied that the penalty was a tax.
http://abcnews.go.com/Politics/OTUS/white-house-roberts-obamacare-mandate-penalty-tax/story?id=16679772

The dateline of the story is June 29, 2012, and the date of the USSC decision was June 28, 2012 according to your link.

New taxes are unpopular, so they sold it to the public as a penalty.

 

[Vic Sandler]

New taxes are unpopular, so they sold it to the public as a penalty.

I don't disagree on either of these two points. In fact, my link supports your second point. However, you claimed that the administration sold it as a tax to the USSC. I can't find any link supporting that view. Can you help me out?

 

[SteamKing]

You can call any checks you send to the IRS every spring as 'birthday presents for Uncle Sam', but they're still taxes.

The old joke used to be that government wouldn't rest until it figured out a way to tax the air you breathe. They've come close: now you have to pay a tax for merely breathing.

 

[russ_watters]

I don't disagree on either of these two points. In fact, my link supports your second point. However, you claimed that the administration sold it as a tax to the USSC. I can't find any link supporting that view. Can you help me out?

If you're suggesting that the USSC ruled on that explanation without the government arguing it, I'm not sure, but it isn't a hair I'm that concerned about splitting. Maybe I'll look it up later if I get a chance.

Edit: Yes, indeed: the Obama admin argued to the court that penalty=tax.
http://www.supremecourt.gov/docket/PDFs/11-117%20BIO.pdf

 

[Locrian]

However, you claimed that the administration sold it as a tax to the USSC. I can't find any link supporting that view. Can you help me out?

I think I can.

How about this discussion of the Verrilli's arguments?

Mr. Verrilli believed that his argument that the penalty for not obtaining health insurance was a tax and not a forced purchase, even though it was a secondary point in his defense, could be the lure to bring along Justice Anthony M. Kennedy and perhaps Chief Justice Roberts as the narrowest way that the conservative justices could uphold the law.

I think he was proven right.

This article may give some background as well.

“This case presents issues of great moment, and the Anti-Injunction Act does not bar the court’s consideration of those issues,” Verrilli said.

Verrilli had to be careful, though. While he insisted that the penalty is not a tax for Anti-Injunction Act purposes, he is expected to argue as the case proceeds that Congress is within its authority to pass the health-care law in part because of its ability to tax.

“Today you are arguing that the penalty is not a tax,” said Justice Samuel A. Alito Jr. “Tomorrow you will be back and arguing that the penalty is a tax.”

And he sure did. You might technically say that he both argued that it wasn't a tax, and that it was.

 

[Vic Sandler]

Today is the 30th unfortunate day for the website. It is currently down due to problems at the data hub.
http://money.cnn.com/2013/10/29/news/economy/obamacare-site-outage/index.html?hpt=hp_t1
You can still call the 1-800 number though, so either you can call the number without purpose, or the data hub isn't completely down. Also, it seems that the website went live even though the security tests had not been completed.
http://www.cnn.com/2013/10/30/politics/obamacare-website-warning-memo/index.html?hpt=hp_t1
Sibelius claims that Obama is responsible but only after a considerable amount of blaming the questioner. Similar to what just happened on this thread I might add.

He is the President. He is responsible for government programs.

http://politicalticker.blogs.cnn.com/2013/10/30/frustrated-sebelius-to-questioner-whatever/?hpt=hp_t1

There has been one significant improvement to the website. Now I can browse marketplace insurance plans without logging in. However, the information I get is useless. There is no provision to enter the number of children or any ages, so the quoted price is just generic and not necessarily applicable to my situation. Also, while the co-pay is given, the deductible is not, so you can't really say what is being offered at the generic price. Thus you cannot compare plans. I hope that when the site is finally working and I can log in and find out what my subsidy is, I will get a different view of the marketplace than the one I am getting now. I.e. there are two views of the marketplace.

 

[Locrian]

There is no provision to enter the number of children or any ages, so the quoted price is just generic and not necessarily applicable to my situation. Also, while the co-pay is given, the deductible is not, so you can't really say what is being offered at the generic price. Thus you cannot compare plans.

I assume you are talking about the "See Plans And Prices In Your Area Now" button, and I agree its functionality is really lacking. Why they didn't allow you to choose exact ages is beyond me.

For anyone who isn't familiar with individual plan pricing, the rate is the multiple of five numbers: A base rate particular to a carrier & state, an area factor, a plan factor, an age factor and tobacco factor. While these are relativities and can be normalized lots of ways, typically the base rate is a dollar figure and the factors are on the order of one (but obviously not equal to one).

The "See Plan Prices Now" button assumes no tobacco and gathers all other information - loading the age table would have required a few extra bytes of memory. Why not take that final step? Currently if you choose "just for me" it let's you choose between two different age groups. The lower just gives you the rate for a 27 year old, the higher for a 50 year old. I'm not sure what ages it's assuming for the families (I could look it up but don't feel like it).

Now insurance carriers are being bombarded with individuals who used the "See Prices Now", got one rate, logged in for real, got another rate, and then called customer service. What a goofy design choice. I hope they get rid of that button.

Not only do you not have member cost sharing*, but you don't have network size, either. As I pointed out earlier, some plans are cheaper because they cut out a large swath of providers. A user should be able to make some reasonable comparisons just by using metal levels, but the additional details will be required to make a final decision.

*Vic Sandler, you mention you do see copays, but I don't see them. Where did you find them?

 

[BobG]

You might technically say that he both argued that it wasn't a tax, and that it was.

Nothing wrong with that.

"When I use a word," Humpty Dumpty said in rather a scornful tone, "it means just what I choose it to mean -- neither more nor less."
"The question is," said Alice, "whether you can make words mean so many different things."
"The question is," said Humpty Dumpty, "which is to be master - - that's all."

 

[D H]

Today is the 30th unfortunate day for the website. It is currently down due to problems at the data hub.

This is getting very old, Vic. We all know that it the rollout was a debacle. It's going to be another month, minimum, before the website is *close* to fully functional.

Sibelius claims that Obama is responsible but only after a considerable amount of blaming the questioner.

No, she didn't. She said "whatever".

That is the perfect response to a "when did you stop beating your children" type of question. I watched some of that witch hunt. Harper's questioning was amongst the worst. The Republicans are doing themselves no favor here. I, for one, used to be a fairly solid Republican voter. Not any more. I'm a solid anti-Republican voter now.

Here's the sad thing. This rollout was a debacle, without doubt. The timing of the release was 100% politically motivated; that the product wasn't ready technologically was completely irrelevant.

Nobody is looking to the root causes. The Republicans in that hearing were looking for a scapegoat, preferably one whose last name is Obama. On the flip side, Democrats were making excuses after excuses. It was not a pretty sight.

 

[Vic Sandler]

Vic Sandler, you mention you do see copays, but I don't see them. Where did you find them?

1. From the main page click on 'See Plans Now"
2. Select "I'm looking for coverage for myself or my family", and click on Next.
3. Select "Health", and click on Next.
4. Select a state and county and click on Next
5. Select "You, your spouse, and your children" and click on Next.
6. Click on Next.
7. Click on Next.
At the top of the page it says:

Plans are put into 5 categories
These 5 categories (catastrophic, bronze, silver, gold, and platinum) are based on how you and the plan expect to share the costs for health care.

The category you choose affects how much your premium costs each month and what portion of the bill you pay for things like hospital visits or prescription drugs.

It also affects your total out-of-pocket costs - the total amount you'll spend for the year if you need lots of care.

Then it has the following chart.
CATASTROPHIC less than 60%of the total average costs of care
BRONZE 60% of the total average costs of care
SILVER 70% of the total average costs of care
GOLD 80% of the total average costs of care
PLATINUM 90% of the total average costs of care

I am not eligible for Catastrophic insurance. The thing about total out-of-pocket costs slipped my attention.

Edit: What follows is misleading. Read Locrian's post #83 below for clarification.

According to the 2500 page law, there is a cap of $6,350 per individual and $12,700 per family regardless of which metal you choose. However, according to the 12,000 page regulations, this cap will not apply until 2015. Therefore, you need to know the cap of the plan before you can evaluate its value.

In my opinion, the lack of a cap means that the insurance is by no means affordable no matter how you slice it. You can buy this insurance and still have your life savings wiped out. From now on I intend to call it the UCA.

 

[Vic Sandler]

During the recent government shutdown, there were daily reports of polls that were taken to find out if people blamed Democrats or Republicans more. Why are there no polls now to find out who people blame for the website problems?

 

[Locrian]

In my opinion, the lack of a cap means that the insurance is by no means affordable no matter how you slice it. You can buy this insurance and still have your life savings wiped out. From now on I intend to call it the UCA.

This is very misleading. The out of pocket limits are hard maximums* and are equal to or less than the values Vic Sandler noted in their post. The 1 year delay mentioned only impacts coverages where portions are carved out between separate companies. This should not occur in exchange plans.

Now if you're in a self-insured group plan with carved out drugs - which is not uncommon - then you should review your coverage. In this case it is true that you could face out of pocket costs of up to twice the ACA limit (once per carrier). However, it is very unlikely this impacts you unless your employer has made some significant and very negative changes to your plan recently (or plans to next year). If they chose to do that, it would not be related to, or required by, the ACA.

In other words, the only way you could be facting OOP costs higher than those required by the ACA is if you had multiple carriers and would have been facing those same maximums (or higher) anyways, regardless of the ACA.

*Edit: They're hard maximums for in-network services. This should go without saying. . . but I said it anyways.

 

[Locrian]

Will Insurer's be the next Obamacare dropouts?

Insurers may still be able to withdraw from the federally run exchange through this Thursday.

And why would one want to?

Lurking behind all this is another issue raised last week—the impact of sequestration on Obamacare, and on insurance companies in particular. The Congressional Research Service believes that insurance companies will personally end up footing the bill for the sequester’s cuts to Obamacare cost-sharing subsidies. Those cuts will total $286 million in the first nine months of 2014 alone.

And, as may have been mentioned, there's a potential adverse selection impact related to the problems with the exchange.

 

[Vic Sandler]

This is very misleading.

Thank you for this clarification. So if I ever successfully buy insurance through the exchange, it will have the $6,350 individual and $12,700 family out of pocket caps and therefore is not a consideration when comparing them to each other?

 

[Vic Sandler]

And, as may have been mentioned, there's a potential adverse selection impact related to the problems with the exchange.

This adverse selection business has me perplexed. It has been said that if the young and healthy opt for the cheap penalty instead of the expensive insurance while the old and sickly buy the insurance, it will sink the entire system. But how about individual companies? Is there a plan in place in case the young choose company A and the old choose company B?

 

[SteamKing]

That's a good question. In a normal market, company A would become very profitable while company B would probably wind up losing money. If this situation continued for some time, company B would probably have to exit the health care insurance business unless it was able to alter its mix of policyholders. If company B raises its rates to raise more revenue, it runs the risk not only of shedding its older customers, but it would also not be as attractive for the younger customers either.

There is no guarantee that the companies writing policies today will be the same ones doing so next year or in the future. Different states have different companies offering coverage. California has a lot of companies competing for business because of its large population. Smaller states with fewer people have much less choice.

One aspect of the health insurance market which the ACA does not address is that health insurance does not move across state lines. If you buy a policy when you are living in California and you move to North Dakota, you get to start over in obtaining coverage from one of the companies writing insurance there.

 

[Vic Sandler]

Today is the 32nd unfortunate day. It is also the 8th day I have been trying the same thing and expecting a different result.

 

[SteamKing]

Congratulations! You have met Einstein's definition of insanity.

Not to worry, though. Now the IT dudes from Oracle and Google who brought you a second Obama term have been turned loose on healthcare.gov:

http://www.businessweek.com/news/2013-10-31/google-oracle-engineers-enlisted-for-obamacare-tech-surge

The answer is probably aboard these mysterious barges which keep turning up:

http://sanfrancisco.cbslocal.com/20...barge-to-offer-high-end-showrooms-party-deck/

Nothing says luxury like a deck barge with a bunch of shipping containers on them! California, what a silly place.

 

[Vic Sandler]

Not to worry, though. Now the IT dudes from Oracle and Google who brought you a second Obama term have been turned loose on healthcare.gov

No need for the IT dudes, it will take at least a month just to get them up to speed anyway. Can they lend us their president instead.

 

[Borg]

The first day's numbers are in - 6. Yes, only six people managed to make it through on the first day.

 

[Vic Sandler]

This is the 28th unfortunate day for the ACA website. The site was down all day yesterday and a good part of today, but it is up now. I still can't log in. I called the 1-800 number and they told me they can't access my information even though it was input using the 1-800 number, not the website. That is, the problems with the website are not the only problems with the program as a whole. This time I got to speak to a supervisor, but it didn't do me any good. However, I was told that my case was being upgraded and that I would be receiving a call within 48 hours from a problem solving team that presumably has more effective tools at its disposal. I was also told that the 48 hour promise was not to be taken seriously and I shouldn't get upset if it were to take until Friday before they contact me.

I posted that on Monday. Then they said I should call back to the 1-800 number if the Advanced Resolution Center didn't contact me by 9:00 pm Friday. Since they did not call me, I called the 1-800 number. Three times. The first two times my call was dropped after I said I didn't want to take the survey after the call. The third time I called I said I would take the survey and I was connected to a representative. When I was finished speaking to the representative, I hung up and did not actually take the survey. The gist of the conversation was that when they told me I would be contacted by Friday, they misspoke. They were supposed to say that it would take from 2 to 5 days. In other words, if the Center doesn't call me by 9:00 pm tomorrow, I should call the 1-800 number. The representative I spoke to also claimed that he cleared my password and I should retry the link in the e-mail they sent me. I did so, but got the same error message as before.

 

[Vic Sandler]

This is getting very old, Vic.

You're preaching to the choir with that one brother. As I said before, I am providing an accurate account of my adventures with the website. I am not struggling with the vast complexities of a website tasked with dealing with the vast complexities of the ACA. I am just trying to get a user name and password that works. As far as I'm concerned I am doing a favor for those who are interested in it. It stands to reason that if you are not interested in it, you shouldn't be reading it.

No, she didn't. She said "whatever".

I know that's what the headlines said, but the actual quote is:
"You clearly, uh," (then a small pause, followed by), "whatever."
The Secretary put both her hands in the air, briefly, then resumed.
"He is the President. He is responsible for government programs," she concluded.

That is the perfect response to a "when did you stop beating your children" type of question.

Actually, the question was whether Obama was ultimately responsible for the rollout. Sebelius was asked several times before she gave the correct answer. "When did you stop beating your children?" doesn't have a correct answer.

Watch the video in this link. There's more to it than just 'whatever'.
http://politicalticker.blogs.cnn.com/2013/10/30/frustrated-sebelius-to-questioner-whatever/

 

[edward]

you're preaching to the choir with that one brother.


I know that's what the headlines said, but the actual quote is:
"you clearly, uh," (then a small pause, followed by), "whatever."
the secretary put both her hands in the air, briefly, then resumed.
"he is the president. He is responsible for government programs," she concluded.


Actually, the question was whether obama was ultimately responsible for the rollout. Sebelius was asked several times before she gave the correct answer. "when did you stop beating your children?" doesn't have a correct answer.

Watch the video in this link. There's more to it than just 'whatever'.
http://politicalticker.blogs.cnn.com/2013/10/30/frustrated-sebelius-to-questioner-whatever/

"Whatever."

 

[SteamKing]

I hate to pile onto poor Vic's troubles, but assuming one does enroll in a plan, the pain is not necessarily over.

Depending on a number of factors, the rates you are quoted for coverage for 2014 may not be the rates you'll have to pay for 2015 and beyond. Like most everything, these rates will be subject to change in the future, once more information comes available. If you can only barely afford coverage in 2014, it might be entirely out of reach in 2015.

Another thing to consider is that hospitals have not been merely sitting on the sidelines during this process. They have some pretty smart numbers guys, too, and when they examine the features of the various metal plans, with the high deductibles and the caps on payouts, the hospitals figure they will be at risk for making up the difference in what the health plan pays for and what services the patient consumes. As a result, some hospitals may refuse to honor insurance policies purchased on the exchanges.

http://health.usnews.com/health-new...2013/10/30/top-hospitals-opt-out-of-obamacare

 

[Vic Sandler]

It is difficult for me to ask the following question without seeming to be spreading false information. Please do not read this as a description of a real situation, but rather as a question. Am I correct in the following, or am I wrong?

Consider a person is so poor that they can neither afford any kind of health insurance nor can they pay for medical services on their own. Yet they make more than the maximum to qualify for medicaid. Currently, when they get sick, they have no recourse except to go to an emergency room, because while doctors can turn them away, hospitals cannot. The money to pay for these people comes from higher prices charged to hospital patients who have insurance or who are able to pay for services themselves.

Under the ACA, these poor people would likely get a subsidy large enough so that they could get a bronze or perhaps even a silver plan for no premium cost whatever. Now, they still can't afford to see a doctor since, there is a deductible and they can no more afford it under the ACA than they currently can. They still go to the emergency room and get free services up to the deductible and then the insurance company starts paying up to the cap, and then the insurance company pays for the rest. Thus less is added onto the bills of the paying customers.

For the poor, there seems to be no difference under the ACA than the current state of affairs unless there is within the ACA some provision to pay for doctor visits which tend to be cheaper than emergency room visits. Nor does there seem to be any difference for those who have insurance since they will continue to pay through insurance premiums that are higher than they would otherwise be, just as they do now. Of course, those premiums are subsidized for many people and that is a difference under the ACA. However, you cannot say with assurance that they won't pay for the subsidy directly through increased taxes, or indirectly through other means.

Please remember that although these are stated as facts, they are really questions.

 

[SteamKing]

The situation you describe also works for individuals and couples who are not poor. Under the ACA, the subsidies have an income cap, where if you make just $1 over the max. allowed income, POOF!, there goes the entire subsidy and you are on the hook for all of the premiums. There's no sliding scale to soften the blow, just $1 over the limit and the subsidy disappears. That's why the article in sfgate.com was so startling: it advocated that if an individual or couple thought their income for the upcoming year would put them over the limit for receiving a subsidy, they should cut back on their hours or find a way to make LESS money during the year. Talk about perverse incentives.

http://www.sfgate.com/business/netw...-can-net-huge-health-care-subsidy-4891087.php

So, in the years ahead, expect to see less economic mobility as people decide not to look for a better job or upgrade their skills or education because they might make too much income to get a subsidy to buy health coverage where there are large deductibles and copays and which might not even be accepted by many hospitals or doctors.

And remember, the unsubsidized premiums and out-of-pocket outlays all come out of after tax income, so people will be required to budget differently than in the past. This means less money to spend on entertainment, fixing up the house or buying a new car is put off, maybe the kids don't get to go to college after HS (and maybe not at all), and vacations become few and far between. The ripples in the economic pool really haven't started yet, but it doesn't look like there will be any strong recoveries anytime soon, and any dip back into recession will take longer to climb out of.

 

[Vic Sandler]

The situation you describe also works for individuals and couples who are not poor.

As in my previous post, the following is my understanding. Treat it as a question, not a fact.

Currently, if you are not poor and you have no insurance and you need medical attention, you may not be responsible for the entire bill. However, they will wipe out all of your savings before they start to charge your costs to others. Health insurance is not to protect your health, it's to protect your wealth.

I don't see how this has anything to do with my previous post, since I was talking about people who have no wealth to protect.

 

[Locrian]

This adverse selection business has me perplexed. It has been said that if the young and healthy opt for the cheap penalty instead of the expensive insurance while the old and sickly buy the insurance, it will sink the entire system. But how about individual companies? Is there a plan in place in case the young choose company A and the old choose company B?

That's a good question. In a normal market, company A would become very profitable while company B would probably wind up losing money. If this situation continued for some time, company B would probably have to exit the health care insurance business unless it was able to alter its mix of policyholders. If company B raises its rates to raise more revenue, it runs the risk not only of shedding its older customers, but it would also not be as attractive for the younger customers either.

I don't think these are inaccurate descriptions of the dangers of selection, but when comparing company outlooks in the 2014 individual market there are some additional considerations.

Risk Adjustment, firstly. Under the ACA, members on individual policies have risk scores assigned to them based on demographic characteristics and claims patterns. The average risk scores for a plan are tallied and compared between companies. Companies with higher risk scores will receive payments from companies with lower risk scores. Thus having sicker members results in both higher claims and higher revenues. Whether the revenues offset the claims is something we'll find out in late 2015.

Additionally, there are two more R's to consider: Reinsurance and risk corridors. Between these three systems, individual companies can still be very much at risk, but they are much less so than they would be without them.

The reason why the system needs young, healthy members is to lower overall premiums. HHS defined an age-curve that results in the young subsidizing the old. The young will be overpaying, and the older underpaying. The three R's will help protect a single company from disaster, but it doesn't help keep rates down for the entire risk pool.

Ultimately, if you design a system that results in cross-subsidization, you had better make sure the people you're taking money from can't opt-out, or you won't have anything to give the people you're trying to give money to.

 

[Locrian]

Depending on a number of factors, the rates you are quoted for coverage for 2014 may not be the rates you'll have to pay for 2015 and beyond. Like most everything, these rates will be subject to change in the future, once more information comes available. If you can only barely afford coverage in 2014, it might be entirely out of reach in 2015.

Very true. However, keep in mind that the size of the subsidy is based on the second highest Silver metal tier plan. So as premiums go up, so will the subsidy.

Well, for those that can get it.

As a result, some hospitals may refuse to honor insurance policies purchased on the exchanges.

http://health.usnews.com/health-new...2013/10/30/top-hospitals-opt-out-of-obamacare

I think we should keep in mind this is coming from both sides, though.

For the most part, you should - both historically and in 2014 - be using in-network providers. This means that the insurance company and provider have signed a contract detailing what payment rates are and how they will be paid. Network building and monitoring is an important service that managed care organizations and insurance companies provide.

What has happened is that insurance companies and MCO's are looking for any way to reduce cost, and some companies have introduced plans that don't include the most expensive providers. You can blame the providers for "opting-out", or you can blame the insurance company for being unwilling to pay the rates the provider demands. It is also true that some providers are refusing to provide out-of-network services, but I think this is a smaller issue than the introduction of thin-network plans.

Note that the extent of this varies by state. In my state and at least one next to it, there are thin-network plans that cut out huge swaths of world-class providers. But there are also more expensive plans that include pretty much everything available.

IMHO the problem here isn't the existence of these plans - personally, I'd love to cut out the most outrageous costing providers from my policy to lower premiums. The problem, though, is that I don't think people buying these thin-network plans will realize they've done so until it's pretty late in the game.

Expect a lot of noise about this in 2014.