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Old 09-02-2014, 10:18 AM   #61
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I've never understood the whole rate approval process with different states. Are these to make the pols look like they are protecting their citizens or drive heath insurers from their states? If I ran an insurance company and my calculations showed I needed a 5% rate increase to maintain my profits, a state "pushing back" will cause me to either reduce payments to providers (probably shrinking my networks) or to stop writing policies in the state. I can't imagine the state regulators somehow "showing" the insurance company how to reduce costs without impacting payments.
I believe states regulated insurance premiums before the ACA.

The ACA now mandates certain Medical Loss Ratios, meaning a certain percentage of the premiums they collect must go towards paying claims.
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Old 09-02-2014, 10:39 AM   #62
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This year, in Oregon the insurance commission wants to make sure that newly formed health insurers are charging enough to pay claims.
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Old 09-02-2014, 11:34 AM   #63
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I believe states regulated insurance premiums before the ACA.

The ACA now mandates certain Medical Loss Ratios, meaning a certain percentage of the premiums they collect must go towards paying claims.
States definitely regulated insurance companies before the ACA. I've never understood what they accomplished with their "approval" of rates. It has always looked like political posturing to make it look like the state (and those currently in power) were protecting the citizens from the greedy insurance company. No doubt the insurance companies are greedy just like private industry should be but they should also be competitive. They will not continue to issue policies that they don't make money on and won't sell any if they try to charge too much.

The scenario seems to be that the insurance company announces plans for a big increase. The state insurance commissioner is "outraged" and denies the big increase but still approves an almost as big increase. Afterwards, both parties retire to the CC for a round of golf and drinks afterwards.
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Old 09-02-2014, 11:43 AM   #64
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This year, in Oregon the insurance commission wants to make sure that newly formed health insurers are charging enough to pay claims.
And how would the insurance commission know more than the insurance company? I think the public would be better served by requiring adequate reserves for claims and making sure there is an effective way to rollup insolvent companies and move policy holders to new insurers.

I used to live in Washington State. They had (may still) a very powerful liquor control board that determined what liquors could be sold in the state and at what price. They also ran all the liquor stores. In the 12 years I lived there, I think there were three or four incidents where members of this board were found taking bribes and kickbacks from liquor companies. This type of corruption is what seems to come out whenever a benevolent goverment decides to try to control what the free market could do for itself more efficiently. I can't help but think the state insurance commissions are in the same position when they try to "control" rates.
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Old 09-02-2014, 11:53 AM   #65
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States definitely regulated insurance companies before the ACA. I've never understood what they accomplished with their "approval" of rates. It has always looked like political posturing to make it look like the state (and those currently in power) were protecting the citizens from the greedy insurance company. No doubt the insurance companies are greedy just like private industry should be but they should also be competitive. They will not continue to issue policies that they don't make money on and won't sell any if they try to charge too much.

The scenario seems to be that the insurance company announces plans for a big increase. The state insurance commissioner is "outraged" and denies the big increase but still approves an almost as big increase. Afterwards, both parties retire to the CC for a round of golf and drinks afterwards.
I worked in the auto insurance industry for 23 years and in that time my company went through varying degrees of difficulty getting approvals for rate changes. Some states were easy ("File and Use") while other states made us jump through hoops to get approvals.

We often got caught in the crossfire of political pressures, especially if the office of the Insurance Commissioner were an elected, as opposed to an appointed position. I recall in one state back in the 1990s, the IC would not approve any overall rate increase which was 10% or more because he feared a primary opponent (not a general election opponent; the primary WAS the election) running an ad stating, "Comm. X approved a double-digit rate increase" in the weeks right before the primary. I was told by my boss to find a way to reduce our aggregate increase to be no more than +9.9%. I did that and our rate increase was approved (and the IC got re-elected).

Other state insurance departments asked some really stupid questions, often through hired "consultant" and had us waste our time with lots of voluminous data requests I had to fulfill (I was also the data go-to guy earning my nice salary).
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Old 09-02-2014, 11:54 AM   #66
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Thankfully the Oregon State has an excellent record for honest dealings. Local political entities not so much.

Here is an excerpt of from the Oregonian discussing the Commission's concerns about too low a rate for one insurer:
" The state reined in some efforts to cut rates as well, notably that of Oregon's Health CO-OP, one of two new consumer-operated insurers set up with federal loans last year.

The CO-OP had sought to cut its premiums by 21 percent, but instead the state approved only a 9.9 percent cut after questioning the calculations the insurer used to justify the cut.

The CO-OP's CEO, Ralph Prows, said the firm has already asked for a re-hearing and review to address what he said was information that bolstered the insurer's case.

"We worked with Milliman -- the best outside actuaries in the country -- every week since last October, and we scraped every corner of the cupboard to find every half percent, every quarter percent we could find to pass on to consumers," Prows said.

Cali, the insurance commissioner, said her division has to ensure rates aren't too low or too high. If rates don't cover costs, "they may not be able to pay claims, they may not be able to be sustainable."

She said she hadn't decided whether to give Prows a re-hearing.

Last year the CO-OP had sought to cut its rate request after seeing Moda's rates. The state told the CO-OP it wasn't allowed, although other insurers
were allowed to cut their rates." "

Many Oregonians are really big on co-ops thinking that they are a panacea.
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Old 09-02-2014, 03:31 PM   #67
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Thanks! This is our situation, no kiddos. It would definitely be better for us to have separate deductibles/max out of pockets, given my medical history. I will have to compare all the options. Getting closer to pulling the trigger on FIRE...but still have lots of details to work through first!
Actually, we found that even though we have the same level plan (cat in our case) that it is still better for DW and I to have separate policies because deductibles are not stacked (but are aggregate) and the premium for two is the same as two premiums for one.

If we have two separate policies and one of us has $10,000 of claims, the policy will pay the cost over the $6,350 deductible. If we have a combined policy, since the $10,000 is less than our combined deductible of $12,700 the insurer doesn't pay anything.

It would have worked the same for bronze.
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Old 09-02-2014, 04:33 PM   #68
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Actually, we found that even though we have the same level plan (cat in our case) that it is still better for DW and I to have separate policies because deductibles are not stacked (but are aggregate) and the premium for two is the same as two premiums for one.

If we have two separate policies and one of us has $10,000 of claims, the policy will pay the cost over the $6,350 deductible. If we have a combined policy, since the $10,000 is less than our combined deductible of $12,700 the insurer doesn't pay anything.

It would have worked the same for bronze.
I had read that on a different thread (probably your advice then, too!) - thank you! It doesn't seem to make any sense at all to combine policies for families consisting of 2 only. And I'm really happy to hear we can apply the subsidies (if we qualify) because of my risk of meeting the full deductible (again - have met it 3 years in a row now - ugh!). But I am so incredibly thankful I can apply for insurance now. Otherwise we would have had to completely give up our dream of early retirement.
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Old 09-02-2014, 04:47 PM   #69
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As I see it, the big cost increases built into the ACA insurance requirements have already gone into effect prior to 2015. These would be the elimination of maximum coverage, up to age 26 on parents' plan, required coverage with pre-existing conditions, mental health coverage and required maternity care. These impact the plans from employers and the exchanges. Different companies implemented different rate increases for these. I suspect 2015 will heavily reflect these costs as premiums are readjusted. I suspect it will take years for all this to work out....
I sure hope you are right, but I fear these issues were not really the 800lb gorilla(s) of HC inflation. I fear we are on the precipice of another round of huge cost increases. There are a number of VERY expensive drugs, treatments, etc. just hitting the market. Just ONE of these ultra-costly drugs is predicted to add $2-300 to everyone's annual premiums.
Patients pay steep price for Hepatitis C cure - Chicago Tribune
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Old 09-02-2014, 04:50 PM   #70
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If expensive new drugs raise premiums, that would happen regardless of whether the ACA exists or not.
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Old 09-02-2014, 04:51 PM   #71
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I had read that on a different thread (probably your advice then, too!) - thank you! It doesn't seem to make any sense at all to combine policies for families consisting of 2 only. And I'm really happy to hear we can apply the subsidies (if we qualify) because of my risk of meeting the full deductible (again - have met it 3 years in a row now - ugh!). But I am so incredibly thankful I can apply for insurance now. Otherwise we would have had to completely give up our dream of early retirement.
I priced-out a policy for my family of 4 (kids were 18 and 21 at the time), and the combined policy came to exactly the same price as 4 separate policies. The only reason I ended-up with one policy was because it takes like 45 minutes to get through the healthcare.gov buying process.
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Old 09-02-2014, 06:20 PM   #72
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If expensive new drugs raise premiums, that would happen regardless of whether the ACA exists or not.
Prob true, although some claim the old lifetime benefit limits may have had a rather crude effect on limiting ultra-expensive therapies. Now it seems the sky's the limit in pricing new drugs, devices, etc. ACA was widely promised to control (even reduce) costs. This has clearly not materialized. Most on all sides of the political spectrum now seem to agree this will require further legislative efforts, although that will probably take years.
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Old 09-02-2014, 06:30 PM   #73
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It's a little too early to determine trends, especially on something like cost. Cost changes over a short-period of a few years may not be determinative of sustainable trends.

I'm not sure cost-reduction was a primary goal so much as making insurance accessible to more people who didn't have jobs and/or had pre-existing conditions.
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Old 09-02-2014, 06:54 PM   #74
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Over three decades, health care costs in the US rose from 7% of GDP to 17%. A clearer trend could not exist. The rate of increase appears to have slowed, probably because it reached the level of general unaffordability.

Health care reform is not about cost and is best described by the concept of "Triple Aim", which is
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improving the experience of care, improving the health of populations, and reducing per capita costs of health care.
The PPACA is one step in that direction, not yet fully implemented, and probably too early to measure the impact.
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Old 09-02-2014, 07:05 PM   #75
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There's a more recent trend of slower increases, even before this year.

Some attribute it to the financial crisis, recession and tepid growth since.

Supposedly the ACA modified some things, such as going towards paying for outcome rather than procedures, to a certain extent.

The implementation of a digital medical records standard is also suppose to help reduce costs over the long term.

But the ACA hasn't been around long enough so it's not clear (well some parts of it have been in effect for 4 years).
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Old 09-02-2014, 10:01 PM   #76
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Over three decades, health care costs in the US rose from 7% of GDP to 17%. A clearer trend could not exist. The rate of increase appears to have slowed, probably because it reached the level of general unaffordability.

Health care reform is not about cost and is best described by the concept of "Triple Aim", which is The PPACA is one step in that direction, not yet fully implemented, and probably too early to measure the impact.
The upward trend in US HC costs has not been a straight line, but has had periods of slowing followed by reinflation (e.g. 61-65, 72-73, 96-98).
IMHO- It's too early to call recent lull in HC inflation a change in the overall upward trend, although I sure hope it is.
FWIW- US gov't's historical HC inflation data is available here (searchable by various annual periods)-
Bureau of Labor Statistics Data

I agree that cost is not the only aim of HC reform, but it is a major one. It was touted as such from the beginnings of the ACA debate. Ultimately cost containment is critical to the sustainability of any HC system (private insurance, single-payer, or socialized). It is axiomatic that if costs rise beyond point of "unaffordability", population health & experience will be adversely affected by the decline in real access to HC services. Only time will tell if ACA was indeed a meaningful step in cost containment. I personally doubt it. Most major CC features of ACA have already been implemented. I discount FY 2014 data as a blip as all parties absorbed the complex roll-out of the new system. But IMHO FY 2015 should have brought a meaningful decline in HI premiums across the US. The prelim data suggests this is not the case. I hope history proves me wrong, but I feel unsubsidized FIRE's should be prepared for a resumption of significant rate hikes in 2016 and beyond.
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Old 09-02-2014, 10:40 PM   #77
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There is a really, really simple way to control healthcare costs: monopsony. Our elected leaders chose not to do this when the changes were made to the system a few years ago. So we swim through the murky seas as best as we are able. Fun, eh?
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Old 09-03-2014, 06:00 PM   #78
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There is a really, really simple way to control healthcare costs: monopsony....
HC costs are a growing problem across ALL nations' HC systems regardless of who pays the bills. Interestingly, future national HC spending growth projected by OECD (2013 report below) is expected to be lowest in US, UK, and Nordic states, 3 states with very different ways of funding HC.
http://www.oecd.org/eco/growth/aaaaaawhatfuture.pdf

And a report released just yesterday by CMS tends to support that OECD prediction of HC cost acceleration. The CMS report projects US HC spending to pick up significantly in both gov't and private HI programs.
http://www.cms.gov/Research-Statisti...s/Proj2013.pdf
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Old 09-03-2014, 06:15 PM   #79
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My DIL just got back from a meeting with their business insurance agent (small employer), she said that rates went up 25% as a result of complying with ACA, that the insured would have a lot less at risk but it is costing them a bundle.
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Old 09-05-2014, 06:24 AM   #80
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There is another newly-released set of data derived from analyzing rate filings, this time from the Kaiser family Foundation:

Link to summary here (a link to the full report is at the upper right): Analysis of 2015 Premium Changes in the Affordable Care Act’s Health Insurance Marketplaces | The Henry J. Kaiser Family Foundation
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The analysis examines premium changes for the lowest-cost bronze plan and the two lowest-cost silver plans in 16 major cities. The second-lowest cost silver plan in each state is of particular interest as it acts as a benchmark that helps determine how much assistance eligible individuals can receive in the form of federal tax credits. The findings show that in general, individuals will pay slightly less to enroll in the second-lowest cost plan in 2015 than they did in 2014, prior to the application of tax credits.
Analysis of the report from former Washington Post reporter Sarah Kliff:
Some big Obamacare news: premiums will fall in seven big cities - Vox



Once again, it appears the early speculation of significantly jacked-up Year Two individual policy premiums was off the mark.
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