ACA Federal Marketplace updates

[rbmrtn]

Updating an earlier post, it seems the DC exchange will stumble out of the starting blocks. Computer snags delay parts of Obamacare in some U.S. states - baltimoresun.com

DC is a sate run and not a FED. In some ways I'm thinking it might be good my state backed out of running its own and defaulted to the Feds. I guess why we need 50 individual exchanges to do the same thing is another topic.

 

[brewer12345]

Updating an earlier post, it seems the DC exchange will stumble out of the starting blocks. Computer snags delay parts of Obamacare in some U.S. states - baltimoresun.com

Unfortunate, but since coverage does not start until 1/1/14 it does seem like a few glitches at the start are that big a deal.

 

[ChiliPepr]

To be precise, it's all about affordable health coverage for those who otherwise could not afford healthcare. That does include folks with preexisting conditions who were either simply barred from the system before ACA or charged such excessively large surcharges that they literally could not afford the coverage, i.e., it would force people to make decisions between health and food, etc.

Very true... If you had and could afford healthcare before your prices will probably go up; if you could not afford it or could not get it before, you will probably have an affordable option.

 

[Midpack]

I find that surprising but I probably shouldn't be. Insurance (all types) are shrouded in a cloak of mystery and the rates are determined by means that mediveal alchemists would find arcane.

Is insurance the root cause? Seems fitting with the "arcane, shrouded in a cloak of mystery" rates that our current private health care "system" produces - remember reading the Time article Bitter Pill? http://www.early-retirement.org/forums/f38/why-medical-bills-are-killing-us-65257.html

How do you underwrite discrepancies like these (and there are thousands more examples).

A hospital in Livingston, N.J., charged $70,712 on average to implant a pacemaker, while a hospital in nearby Rahway, N.J., charged $101,945.


In Saint Augustine, Fla., one hospital typically billed nearly $40,000 to remove a gallbladder using minimally invasive surgery, while one in Orange Park, Fla., charged $91,000.

In one hospital in Dallas, the average bill for treating simple pneumonia was $14,610, while another there charged over $38,000.

 

[Katsmeow]

For your case (and mine), paying for $50,000 in occasional episodes of medical treatment would probably be cost effective over paying for $27,000 in annual insurance costs. I'm estimating my actual insurance cost at less than $15,000/yr with the OOP simply what I would have paid anyway. Even at that lower rate, either DW or I would still need to undergo very high dollar cancer treatments to make the HI cost effective. Normal things (like bypass surgeries?) would not trip the wire to make them cost effective.

The thing is that I think you are underestimating the cost of something like bypass surgery if one was uninsured. If you are uninsured you don't get those negotiated rates that your insurer pays. You get the chargemaster rates which are often several times higher. I've looked at some of the EOBs we've received over the years and have dumbfounded by how high the charge would have been if uninsured. If uninsured I think it would be very, very easy for any significant hospitalization to easily go over $100k, not even including ongoing care after being released.

 

[Mulligan]

The thing is that I think you are underestimating the cost of something like bypass surgery if one was uninsured. If you are uninsured you don't get those negotiated rates that your insurer pays. You get the chargemaster rates which are often several times higher. I've looked at some of the EOBs we've received over the years and have dumbfounded by how high the charge would have been if uninsured. If uninsured I think it would be very, very easy for any significant hospitalization to easily go over $100k, not even including ongoing care after being released.

I am not advocating going uninsured in anyway. But recently our newspaper had a series on healthcare costs and one of the parts was the myriad of pricing schemes including why uninsured pay more. The hospital said if they are uninsured they immediately take 50% off the list price and go from there. She basically was implying we cut it in half and see how negotiations go from there. Of course that begs the unanswered question of why do you implement such a crazy pricing scheme in the first place. I consider myself a poor negotiator with cars, Lord knows how poorly I would be over hospital charges!

 

[rbmrtn]

The thing is that I think you are underestimating the cost of something like bypass surgery if one was uninsured. If you are uninsured you don't get those negotiated rates that your insurer pays.

In addition, without insurance you probably will not even get admitted for those expensive procedures. They'll get some money from an insurance company, getting a $100k from working Joe for some procedure is not worth it. Even the local PCP wants the $75 office visit up front if you don't have an insurance card.

 

[meierlde]

Here is a link to and angrybear post that provides more examples:
Angry Bear » Maggie Mahar Healthbeat Blog: Reverse “Sticker Shock” Part 2 –Subsidies Mean Enormous Saving for Older Americans
Hartford Ct Bronze 423, for a 60 year old, silver Souix City $561 (All are before any subsidies) The article also provides subsidy example for the same folks.

 

[ERhoosier]

Is insurance the root cause? Seems fitting with the "arcane, shrouded in a cloak of mystery" rates that our current private health care "system" produces - remember reading the Time article Bitter Pill? http://www.early-retirement.org/forums/f38/why-medical-bills-are-killing-us-65257.html

How do you underwrite discrepancies like these (and there are thousands more examples).

Time article is no longer available their site without paid subscription, but IIRC it contained some rather significant misrepresentations/errors. I did not keep a copy, particularly since the "cloak of mystery" of medical billing is already being lifted.

Regarding examples of charging, most carriers have a set rate which they will pay for specific individual services, and many complex procedures are now being negotiated for global fees (e.g. preset charge for typical gall bladder removal). HC providers & facilities agree to these payments (or not) when they join a carrier's network (or not). This is a way of trying to contain HC costs and why some carriers have different (smaller) networks than others.
IMHO- While no 2 independent providers can agree to exactly same price structure for given service (anti-trust), most big inter-institutional charge/payment differences cited in lay press are due to differences in complexity of patient population undergoing the same procedures and how hospitals break down their charges. The proportion of seriously ill/complex folks in a specific population can obviously be a major issue in underwriting. But some of these cost differences are certainly due to varying efficiencies & negotiating 'skills' of the providers, facilities, and carriers. As HHS points out in its most recent report, more competition between carriers in a given market tends to mean lower costs. Hopefully under the Marketplace inefficient HC institutions & carriers will be under increasing pressure to improve lest they be forced into mergers or bankruptcy.

BTW- Providers in many US markets are MUCH more open to up-front price negotiation with cash-paying folks than they let on. Lots of HC in US is delivered under such arrangements, inc. "medical tourism" by non-US citizens, self-insured religious sects, etc. Trick may be finding the right business officer to speak with, and then presenting evidence of ability to pay (inc. business/banking references, perhaps cash bond, proposed payment schedule, etc.). Business managers are generally much more open to folks willing to pay something vs those who just ignore their bills. Particularly at institutions not running at 100% capacity. How this cash-business side of US HC will ultimately be affected by ACA (inc. how HHS regulates it) is anyone's guess.

 

[Htown Harry]

The thing is that I think you are underestimating the cost of something like bypass surgery if one was uninsured. If you are uninsured you don't get those negotiated rates that your insurer pays. You get the chargemaster rates which are often several times higher.

+1.

Here's the lengthy horror story of a man who decided to forgo insurance, then had the bad luck of being seriously injured in an accident.

Getting Stuck: Uninsured Patients Slammed with Lawsuits by Not-for-Profit Hospital - Page 1 - News - Houston - Houston Press

...The total bill was issued in September 2012 and came in at $444,518.11. Malone and Alaniz didn't know what to do with it, so Malone put it in the small brown accordion file she'd placed the other notices in and kept trying to reach Ramon.

On January 5, 2013, Alaniz was served papers informing him that [the hospital] was suing him for $456,675.23 — the sum of his bill plus interest and $2,500 in legal fees...

...People like Alaniz face a difficult situation when they need emergency care, because it can often cost almost double what it would cost an insured person by the time the patient is left holding the final bill...

 

[ERhoosier]

Here's the lengthy horror story of a man who decided to forgo insurance, then had the bad luck of being seriously injured in an accident.

Getting Stuck: Uninsured Patients Slammed with Lawsuits by Not-for-Profit Hospital - Page 1 - News - Houston - Houston Press

Sounds like the story of a misguidedly aggressive hospital legal dept. The article quotes one defense attny who stated he did not understand why the hosp's legal dept brought these suits since most of his clients were "judgement proof" (e.g. low assets) under (TX) state law anyway and the hosp eventually "dropped the cases in every instance".

BTW- I do not advocate going without HI, but considering the big annual costs of HI premiums plus (potential) big OOP max I can understand why some (e.g. young &/or low-income) still decide not to buy it. Even stretching their limited budget to pay HI premiums, many would still be bankrupt if accident/illness hits 'em for co-pays & OOP max (or even mult OOP max's if treatment goes on for yrs). HOWEVER- For ER's with significant non-protected assets, bankruptcy could mean losing huge chunk of the nest-egg

 

[explanade]

How often are you going to be able to negotiate prices if you have to have something done?

That's presuming that an uninsured or cash payer would be paying for routine doctor visits and tests, to diagnose potential problems.

If you have to have something done quickly, you don't have a chance to shop around or negotiate. In fact, why would a provide negotiate knowing you have to have his services?

 

[MRG]

How often are you going to be able to negotiate prices if you have to have something done??

I did have a surgeon, post op visit, offer to settle for a reduced rate. Emergency appendectomy done in the middle of the night, not at a hospital I would have chosen.

I had seen his pratice, patients, and how he was helping people that didn't know how to get help. Smiled and said, 'thank you please give someone else that break'.

I agree most negotiation is done up front.

MRG

 

[meierlde]

It takes a bit of page-clicking to determine your rating area.

At the second page I linked, follow a link at "For further information about rating areas, please see:" to view rating area designations by your home county. Then you can go back to the table showing the number of plans available by rating area and see which line applies to you.

I agree the actual prices and plan details are the required information for actual decision-making. Like Michael, however, I feel this first peek through the gate is anything but alarming or surprising.

In the case of Texas I suspect that you can sort of relie on the High risk pools breakdown by area. In any case 770,772,752 and 753 are in the are in the highest cost part of the state. Interestingly Bellarie and Alief are in 774 which is one class down. It appears that the ACA uses counties so its really Harris County that is the high cost area. Interestingly Waco and Temple and the Hill Country are the lowest cost areas in the state. San Antonio is in class 2 (Houston and Dallas are in class 6)

Checking the spread sheet at least for 2 places it seems to match the high risk pool in terms of costs. Which shows the rating areas to be consistent at least.

 

[rbmrtn]

Here's a PDF copy of Steve Brills article

http://files.parsintl.com/eprints/77249.pdf

 

[ERhoosier]

Without additional detail I don't think we can draw any meaningful any conclusions from the excel data.

Good point. A local ins broker has pointed out that despite only 3 carriers having signed up for state Exchange, there are some rather important differences between their Bronze plans.

 

[MichaelB]

"Self-insuring" is not an option in the US because too many service providers have pricing tiers that are far too wide and make it impossible for an individual or family to deal with anything other than basic discretionary care. "One service one price" would be a big step forward in that direction.

Good point. A local ins broker has pointed out that despite only 3 carriers having signed up for state Exchange, there are some rather important differences between their Bronze plans.

My guess is that basic network design - how may doctors, specialists, hospitals, etc - is the biggest driver between different policies, even with the same insurer, and will account for more than 50% of all price difference among policy alternatives.

 

[ERhoosier]

"Self-insuring" is not an option in the US.......

Whether they realize it or not, aren't the millions of American without HI functionally "self-insuring"? Even assuming ACA remains fully-funded, CBO estimates ~30 million will remain uninsured under ACA.
CBO | CBO

 

[pb4uski]

There is a big difference between having resources and making a conscious decision to take a risk and self insure (for example, by deciding that dental insurance isn't worth the cost and accepting the risk of some dental bills) and not buying insurance because you don't want to spend the money and believe that society will step up for you should something bad happen.

The cost of health care in the event of an accident or critical illness are so expensive it is not practical for most people to self insure (other than the very, very wealthy). IMO, if you can't afford to pay for your health care if you were to have an illness and you refuse to buy insurance because it is too expensive you are not self insuring, you are avoiding an unfortunate reality of life.

 

[travelover]

........ Imo, if you can't afford to pay for your health care if you were to have an illness and you refuse to buy insurance because it is too expensive you are not self insuring, you are avoiding an unfortunate reality of life.

imho2

 

[Mulligan]

There is a big difference between having resources and making a conscious decision to take a risk and self insure (for example, by deciding that dental insurance isn't worth the cost and accepting the risk of some dental bills) and not buying insurance because you don't want to spend the money and believe that society will step up for you should something bad happen.

The cost of health care in the event of an accident or critical illness are so expensive it is not practical for most people to self insure (other than the very, very wealthy). IMO, if you can't afford to pay for your health care if you were to have an illness and you refuse to buy insurance because it is too expensive you are not self insuring, you are avoiding an unfortunate reality of life.

You are certainly correct, but I wonder what a 27 year old with only a $100 left over each month is going to think. Do I use this to buy insurance and sit at home, or do I have a little fun and go chase some tail this weekend. Nothing is going to happen to me anyways so it's a waste of money. And even if something did, I couldn't pay the deductible anyways. Let them try to get blood from a turnip! I am certainly not advocating this position, but we have all become old foggies if we do not believe more than a few won't think this.

 

[daylatedollarshort]

You are certainly correct, but I wonder what a 27 year old with only a $100 left over each month is going to think. Do I use this to buy insurance and sit at home, or do I have a little fun and go chase some tail this weekend.

Low income 27 year olds will get subsidized, and higher income 27 year olds should have more than $100 left each month or they have bigger issues anyway.

Many 27 year old women especially are really going to have to struggle with the chase the tail vs. health insurance choice.

 

[Mulligan]

Low income 27 year olds will get subsidized, and higher income 27 year olds should have more than $100 left each month or they have bigger issues anyway.

Many 27 year old women especially are really going to have to struggle with the chase the tail vs. health insurance choice.

I'm looking at it through a guys eyes. The ladies always have another coach purse they need to buy. . I am referring to the ones just outside the assistance level. People won't save for retirement, why would they give up their IPhones, electrical gadgets, entertainment money if they are right on the edge for health insurance? Now for my benefit I certainly hope I am wrong. But then again, I can see many of them a year and a half from now filling out their tax returns and asking "what's this health insurance penalty"? I didn't know I had to have insurance. And also probably quite a few who were eligible for assistance but never bothered to even apply. Remember 1 in 7 people are uninsured motorists and they even know they are supposed to have it.

 

[daylatedollarshort]

Remember 1 in 7 people are uninsured motorists and they even know they are supposed to have it.

Car insurance isn't subsidized for low income people.

I don't know how many 26 year olds would go without insurance. The issue is easily solved by increasing the penalty, if need be. Or Yahoo finance will surely have enough scare stories on 26 year olds who didn't get insurance and had some multimillion health disaster to scare them into buying it.

 

[MichaelB]

The percentage of uninsured young people declined in Massachusetts after health reform was introduced there. Lower cost policies for them, combined with catastrophic coverage options, were enough to enable coverage for many.