2015 ACA Premium Increases

[Htown Harry]

Price Waterhouse has been scanning state insurance boards' web sites for rate filings. The early, incomplete data shows an average increase of 8% coming.

This article includes links to some state-specific data:
ACA state exchanges

If I recall correctly, the age-based premium factor will add an additional 5% a year or so once you hit 50. A 10-15% increase in premiums should therefore be in the "expected" range.

Not too bad, considering.

 

[ziggy29]

Don't know what I'll face yet, but my wife's employer-paid group coverage is going up 11% next year. They may have to move her from Gold to Silver level coverage (more or less) in order to afford it, but at least that would make her plan HSA-eligible.

 

[jetpack]

Ok, so the next open enrollment period is from Nov 15 - Feb 15th. Any idea when the rates will be finalized?

 

[ERhoosier]

Ok, so the next open enrollment period is from Nov 15 - Feb 15th. Any idea when the rates will be finalized?

That will be specific to each state, and even to each company. I would expect rates would need to be set by late Sep-mid Oct, but who knows. Last year was FUBAR with the roll-out (inc web site, extended deadlines, etc.), so in some ways 2015 will be the 1st "real" year of the program from a sign-up/premium payment perspective.

 

[pb4uski]

When I retired in 2011 we bought a HDHI/bronze plan

2012-2013 increase = 13.9%
2013-2014 increase = 8.5%
2014-2015 increase = 11.8% proposed

Overall, 2015 rate increases are 4.8-11.8% depending on plan, 9.8% average

We exchanged bronze coverage for catastrophic coverage on July 1. It looks like my new cat coverage will increase about 7.5% in 2015. Note that all 2015 increases are based on proposed rates and will likely get beat down as part of the regulatory review process.

All in all, a fairly normal year in terms of increases - not the sky is falling scenario that some people predicted.

 

[scrabbler1]

A month or two ago I got a letter from my IC which said they were filing for an 18% increase for 2015. If the federal subsidy caps how much I will pay toward my premiums, then is it safe to say that I won't see an increase in my share of the total amount due? (Yes, I may pay more during the year until the next year's income tax return is filed if I elect not to have the subsidy go monthby month.)

 

[MichaelB]

This year we will see how difficult it is to compare rates. Subtle changes in coverage and unannounced changes in network will make rate comparisons very challenging. It will be interesting to see if Medicare or employer group plans rise at the same rate.

My prediction is the largest rate increases will occur where there is little or no scrutiny.

 

[ERhoosier]

This year we will see how difficult it is to compare rates. Subtle changes in coverage and unannounced changes in network will make rate comparisons very challenging. .....

100% agree. Many mistakenly thought ACA would make it "easy" to compare HI policies. Turns out matching up deductibles/co-pays/OOP max was the easy part. IMHO- It's still just as hard to truly compare since the differences have become more 'subtle'. But those differences may have greater financial impact than those deductibles & OOP max's. In my region most Exchange plans cut back markedly on networks and now have no out of network (OON) coverage. Someone with an unusual heart issue may easily find themselves paying 100% of cost to see a true specialist in that field rather than the network's general cardiologist. And Heaven forbid you get bad sick, but not deathly 'full ER admission' sick, while traveling if you do not have a plan with a national network.

 

[sengsational]

This will never happen, but insurance companies should be required to price out any scenario that you apply to one of their plans. So for instance you can have several scenarios, one which would be the routine scenario with no extra health care was required. You might weigh those results as 95% likely. Another scenario might be only 5% likely but it might include saying automobile accident and a hospital stay. The insurance purchaser should have the ability to enter a specific set of health care services including exact prescription drugs and get back a report that lays out coverage.

 

[ERhoosier]

This will never happen, but insurance companies should be required to price out any scenario that you apply to one of their plans. So for instance you can have several scenarios, one which would be the routine scenario with no extra health care was required. You might weigh those results as 95% likely. Another scenario might be only 5% likely but it might include saying automobile accident and a hospital stay. The insurance purchaser should have the ability to enter a specific set of health care services including exact prescription drugs and get back a report that lays out coverage.

IMHO- WAY too complex to ever happen in a meaningful way. Total annual cost in the 1st example (requiring no care) is obviously just HI premium times 12. Beyond that there's just WAY too many different scenarios to play out, particularly with ACA subsidies and changing reg's for implementation. Specific plan benefits & networks regularly change during the year for better or worse. Personal incomes rise or fall resulting in change in ACA subsidy. New drugs & medical technologies come to market during every policy plan year, some HUGELY costly with variable coverage & co-pays. Some drugs get removed from HI plan's covered formulary, sometimes by the pharmaceutical company rather than the HI company. Folks choose to stay in their network for some services but not for others. And any assumption like "5% likely auto accident" is not a single assumption but a complex assumption set. Like seriousness of injuries, +/- complications, treating docs & facilities in or out of network, any out of network providers accepting/refusing in network fee/co-pay structure, costly drugs used to treat being on or off HI's formulary, etc., etc, etc.

Bottom line is that predicting one's total health expenses, HI plus total real world OOP, will likely remain an inexact science. But we should continue efforts to decrease the level of uncertainty.

 

[pb4uski]

This will never happen, but insurance companies should be required to price out any scenario that you apply to one of their plans. So for instance you can have several scenarios, one which would be the routine scenario with no extra health care was required. You might weigh those results as 95% likely. Another scenario might be only 5% likely but it might include saying automobile accident and a hospital stay. The insurance purchaser should have the ability to enter a specific set of health care services including exact prescription drugs and get back a report that lays out coverage.

In a way, that is what they do, but for a group since premiums are based in large part on claims experience for the group. The claims experience implicitly includes the cost and probabilities of the group.

Your wish doesn't make sense because if the health purchaser guesses wrong on what health care services they will need then they wouldn't have coverage. What if they develop a need for a different, expensive prescription during the plan year? Bad idea.

 

[sengsational]

Bad idea.

Maybe. Or maybe I didn't express myself well and wasn't well understood?

Let's say a person has had an ongoing "condition X" for many years that has needed and will continue to need treatment. There is a set of visits, a set of lab tests, and some prescriptions that are in this person's future. The exact details are not known, but precision is not what's important since the idea is to run a comparison between plans with this likely scenario.

This person has the ability to pull out old EOB's and that enables assembly of a specific procedure codes, lab codes, and prescriptions. The insurance company obviously has this information. They've got hundreds of people that fit the profile.

The idea would be you take a set of specifics, along with a predicted in-network/out-of-network split assumption, and get an out of pocket expense estimate for for policy A, B, and C (or how many ever policies you were comparing). This "out of pocket expense estimate" would be for products and servicies (not premiums, not subsidies...that is simple math and could be done after).

So let's say under the above "Usage Scenario 1", "A" costs $2,000, "B" costs $3,000, and "C" costs $5,000.

Now you create a second scenario. It is the same as the first, but it includes a hospital stay of 10 days. Exactly what happens in the hospital is less important than the fact that it's consistently priced in all policies.

In this "Usage Scenario 2", out of pocket expenses are A costs $20,000, B costs $21,000 and C costs $10,000.

If you say scenario 1 is 95% likely and scenario 2 is 5% likely, you end up calculating "expected out of pocket expenses" as follows:

                     Weight Scenario 1          Weight Scenario 2     Expected $
 A           $2,000             0.95   $20,000             0.05                 $2,900
 B           $3,000             0.95   $21,000             0.05                 $3,900
 C           $5,000             0.95   $10,000             0.05                 $5,250

Yes, the above numbers are pure fiction...they'll never happen exactly this way. But having these scenarios priced-out is not worthless to the insurance buyer! The better one can predict what will happen, the more valuable having the ability to get out-of-pocket estimates would be. But even if the scenarios do not end up matching reality, it still shows how the policies "behave" from an out-of-pocket expense standpoint.

But like I said earlier, it will never happen. At least won't happen without legislation. It won't happen because it's in the insurance company's best interest to make it as confusing and opaque as possible; when people optimize their policy choice, they are trying to get the most bang for their buck and so reducing the profit to the insurance company.

 

[samclem]

This will never happen, but insurance companies should be required to price out any scenario that you apply to one of their plans.

This seems like it would be a good idea for a business. For all the major markets, compile info on what is covered by the major plans, then charge users a fee to do an optimization based on their anticipated medical usage. Let them build different scenarios (e.g. "most likely usage", "Lowest likely usage", "Highest Likely Usage") and they fill in a form with the types of things they are likely to need. Add in fields for income and it might not be hard to give a useful report showing anticipated costs for various insurance providers/color levels.

It wouldn't be profitable to do all the locations in the US, but I'd bet one could turn a profit covering the big markets. It would probably be worth $100 to most people, and the data would be customized enough that you couldn't get by with using the info your friend bought.

 

[sengsational]

This seems like it would be a good idea for a business. For all the major markets, compile info on what is covered by the major plans, then charge users a fee to do an optimization based on their anticipated medical usage.
...

The problem is that the insurance companies keep the pricing information confidential. The pricing is in contracts between the insurance companies and the providers, and that information is not disclosed (except for when a services is purchased).

I actually thought about a business surrounding the health insurance maze that would not require participation on the part of the insurance companies or the providers.

It's a crowd sourcing idea where the pricing data would come from real people that had used the services.

The idea was that an average Joe or Jane would download all of their EOB pdf files, then upload those to a web site. The technology of the site would be programmed to recognize EOB formats and only pull off the providers, procedure codes and prices. The site would somehow have to assure users that none of their personal information was being scanned or saved. In return for uploading the EOB's, the customer would get access to the pricing models that are being built and updated.

Unfortunately, it seems like this business model doesn't work very well. One example is glassdoor.com. That one sort of works, but not real well. And the process required for this business, the one where the possibly untrustworthy web site might collect personal medical information, seems like a hard one to overcome.

 

[samclem]

The problem is that the insurance companies keep the pricing information confidential. The pricing is in contracts between the insurance companies and the providers, and that information is not disclosed (except for when a services is purchased).

One sign that we're far away from getting the benefits of a market-oriented approach is that the current system apparently requires a high degree of opacity regarding pricing, the exact opposite of what we'd see in a market-based system.

If I'm following the situation you've described, the consumer can tell the co-pays and deductibles (as $$ or %), but without knowing what the underlying fee for the services will be (because it is proprietary), it's not practical to compare overall projected costs to the insured under various plans.

 

[ziggy29]

The problem is that the insurance companies keep the pricing information confidential. The pricing is in contracts between the insurance companies and the providers, and that information is not disclosed (except for when a services is purchased).

I shredded my right index finger on the knuckle pretty badly about 6 weeks ago and needed a trip to the ER (it was 6 PM and the nearest urgent care clinic was 50 miles away compared to 15 miles for the ER, otherwise I would have used urgent care and not the ER).

For the hospital facilities and staff, the bill to insurance was about $1020, of which all but $50 was paid by insurance (the rest disallowed). But the doctor's services? This was billed separately by another provider, still in network... but they billed about $750 (for about 15 minutes of a doc's time). Insurance paid about $130 of that, the other $620 being disallowed.

Lack of transparency remains a big problem. As does the idea that someone who wasn't insured would have paid nearly $1800 for that visit compared to $1100 for someone who had insurance (and in the case of the doctor himself, $750 instead of $130).

 

[ERhoosier]

While FAR from perfect, HI companies for some years have offered rudimentary customer pricing tools. The info is usu not provider specific, but offers ballpark typical pricing for a few common procedures/services. Obviously, the HI companies would prefer their customers (members) to use the most cost-effective providers if possible. And comparative pricing info may induce high cost providers to become more competitive.

WellPoint Launches Hospital Cost Comparison Tool
Anthem Blue Cross and Blue Shield Expands Cost Comparison Tool to Southeastern Wisconsin | Reuters
http://www.bluecrossma.com/bluelinks-for-employers/pdf/medical-cost-comparison-guide.pdf
Online healthcare price transparency tools trend upward - FierceHealthIT

Some employers are also offering HC cost comparo tools-
Castlight

For some insurers/regions the available cost info from a HI company can be surprisingly specific.
How do I find the cost of outpatient medical services?

At least one private company is also involved in this area (I have NO experience with this firm-only saw it referenced elsewhere)
NerdWallet Health

 

[sengsational]

While FAR from perfect, HI companies for some years have offered rudimentary customer pricing tools.
...
http://www.nerdwallet.com/health/

Thanks for those links. I explored all of them.

Some tools seem to be a cost saver for the insurance company...they offer a way for current customers to list prices for an upcoming set of services. While those tools are valuable, if they require you to be a customer with a specific policy already before you see the prices, that's not much help if you are trying to compare across insurance companies.

Even if you are already a customer and you price out a prescription, for instance, you are getting the information from the formulary associated with your current policy. Next year you may or may not have that same formulary list, or the list could change.

I guess I'm saying that pricing offered to current customers is a step in the right direction, but not sufficient for true decision making when trying to optimize a healthcare insurance purchase decision. If all insurance companies that sold on healthcare.gov were required to have a pricing tool available to prospective customers, that might provide the consumer enough to make a well informed decision.

 

[MichaelB]

I guess I'm saying that pricing offered to current customers is a step in the right direction, but not sufficient for true decision making when trying to optimize a healthcare insurance purchase decision. If all insurance companies that sold on healthcare.gov were required to have a pricing tool available to prospective customers, that might provide the consumer enough to make a well informed decision.

This measure would be helpful, but it would need to apply to the entire healthcare insurance market, not just policies sold on the healthcare website.

Another interesting measure that might be empowering is a "two price only" mandate. Providers can bill to all comers - insurers, Medicare, cash customers - one price for insurance reimbursement and a second price for immediate cash payment. When everyone has access to the same price and that price is publicly available, insurers and patients alike can begin to make more positive choices.

 

[Birdie Num Nums]

Meanwhile, in Washington state, rates are expected to rise an average of 1.9 percent, while the number of plan choices will double.

 

[samclem]

Another interesting measure that might be empowering is a "two price only" mandate. Providers can bill to all comers - insurers, Medicare, cash customers - one price for insurance reimbursement and a second price for immediate cash payment.

I've thought along similar lines, but why not a "one price only" mandate? For various reasons, there will always be cash buyers of medical services (foreign travelers, people who choose not to buy policies, etc).

But, there would need to be some flexibility for medical coverage models that don't use the fee-for-service approach at all.

I guess I'm saying that pricing offered to current customers is a step in the right direction, but not sufficient for true decision making when trying to optimize a healthcare insurance purchase decision. If all insurance companies that sold on healthcare.gov were required to have a pricing tool available to prospective customers, that might provide the consumer enough to make a well informed decision.

Pricing is one bit of information, but somehow we also need to provide information on the availability of the services. Medicaid prices look great to the clients, until it is discovered that it's hard to find a doctor willing to actually provide them (in many cases). Health care coverage isn't the same as health care.

Mrs Smith went to Max, her butcher, and noticed that ground beef was $4 per pound. "Four dollars a pound! Why, Kroger is selling it for three dollars a pound!"
Max: "Then why don't you buy it at Kroger?"
Mrs Smith: "Because they are out of it."
Max: "If I were out of it, I could sell it for three dollars, too!"

 

[M Paquette]

I've thought along similar lines, but why not a "one price only" mandate? For various reasons, there will always be cash buyers of medical services (foreign travelers, people who choose not to buy policies, etc).

Alas, this would fail to address what health care executives call the "Saudi sheikh problem" at some hospitals.

"You don't really want to change your charges if you have a Saudi sheikh come in with a suitcase full of cash who's going to pay full charges."

-- Dr. Warren Browner, the chief executive officer of California Pacific Medical Center

The chargemaster rates have to be nice and high just in case a customer with a suitcase full of cash walks in, or is otherwise delivered.

 

[MichaelB]

I've thought along similar lines, but why not a "one price only" mandate? For various reasons, there will always be cash buyers of medical services (foreign travelers, people who choose not to buy policies, etc).

But, there would need to be some flexibility for medical coverage models that don't use the fee-for-service approach at all.

Agree on both points.

 

[pb4uski]

"You don't really want to change your charges if you have a Saudi sheikh come in with a suitcase full of cash who's going to pay full charges."

-- Dr. Warren Browner, the chief executive officer of California Pacific Medical Center

Pragmatic perhaps, but warped as well. I'm trying to think of any other business that "ability to pay" affects prices as much as medical services and I'm coming up blank.

 

[MichaelB]

Alas, this would fail to address what health care executives call the "Saudi sheikh problem" at some hospitals.

The chargemaster rates have to be nice and high just in case a customer with a suitcase full of cash walks in, or is otherwise delivered.

Pragmatic perhaps, but warped as well. I'm trying to think of any other business that "ability to pay" affects prices as much as medical services and I'm coming up blank.

The Saudi sheikh with a suitcase full of cash is a fantasy. The practice is [-]morally repugnant [/-] distasteful and creates a significant obstacle to health care reform in the US.