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Old 02-11-2016, 11:02 PM   #21
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One thing to keep in mind is that by and large, increasing health insurance premiums are just reflecting increasing health care costs as insurers are required to spend at least 80% of premiums on claims (if it is less then they must refund any excess premium) so the amount available to cover overhead, taxes and profit is at MOST 20% of premiums.
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Old 02-11-2016, 11:12 PM   #22
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One thing to keep in mind is that by and large, increasing health insurance premiums are just reflecting increasing health care costs as insurers are required to spend at least 80% of premiums on claims (if it is less then they must refund any excess premium) so the amount available to cover overhead, taxes and profit is at MOST 20% of premiums.
+1

Health insures are no saints, but how do we expect them to operate with a loss?

And even if they worked for no wages and even paid for their operating costs out of their pocket, all their clients get extra would be that 20% of premium. Do we bet that some other entities will step up to replace the current private insurers and do that?

The problem with US health care is cost control, which is lacking. It's not about who's paying (it's always the patient who pays, one way or the other). It's how much is being paid, and for what.
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Old 02-12-2016, 09:13 AM   #23
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.............The problem with US health care is cost control, which is lacking. It's not about who's paying (it's always the patient who pays, one way or the other). It's how much is being paid, and for what.
True, but that is way too complicated to really wrap our heads around and doesn't make much of a sound bite.
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Old 02-12-2016, 09:22 AM   #24
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Whenever you are relying on others to provide something, it is a risk. Social Security, pensions, the stock market, etc. Companies have to make money or they go broke. When they do, others take their place.

This is just one additional risk in FIRE. It could have been a different healthcare insurer, or more than one.

If BSBC is not there, you can buy from someone else, move to different state, look for other forms of assistance, or continue working until medicare, like many people.

The real world is not always pretty. Typically there are other options.

There is an old saying "To rely on others is to be disappointed".
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Old 02-12-2016, 12:55 PM   #25
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One thing to keep in mind is that by and large, increasing health insurance premiums are just reflecting increasing health care costs as insurers are required to spend at least 80% of premiums on claims (if it is less then they must refund any excess premium) so the amount available to cover overhead, taxes and profit is at MOST 20% of premiums.
True. I wonder how much of this is a shell game, though, in terms of finding creative accounting ways to shift profits from one line of business to another in order to look like they are in compliance with this. I don't know how actively ACA and other federal and state laws "police" this, but many times you can make the numbers say almost anything you want them to say with good accountants and good lawyers.
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Old 02-12-2016, 01:31 PM   #26
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The minimum loss ratio restriction was in its infancy when I retired but I recall hearing about some vigorous debates as to what was included or not but there were well established and detailed rules on what is included in various lines under regulatory accounting and the debate was over which of those count as claims and what does not. So I concede that there is probably some wiggle room but probably not a lot given well established regulatory reporting guidance.
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Old 02-12-2016, 01:39 PM   #27
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Also they may not completely leave the market. If it's like Texas, BCBS will simply raise the price of the HMO plans as much as regulators will allow, and completely drop the PPO product. Which is made even worse by the fact that BCBS is the only option on the Marketplace in many counties (including where I live). What has happened to ACA policies here makes me actually glad I found a part-time j*b with good group health insurance so we don't need it any more.
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Old 02-12-2016, 02:08 PM   #28
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True. I wonder how much of this is a shell game, though, in terms of finding creative accounting ways to shift profits from one line of business to another in order to look like they are in compliance with this. I don't know how actively ACA and other federal and state laws "police" this, but many times you can make the numbers say almost anything you want them to say with good accountants and good lawyers.
I've long wondered this. I tracked prices for individual and Medicare supplemental policies for major insurers over 3 years. MediGap policies have increased at <3% annually while individual policies have increased >25% per year. This state's insurance regulator has indicated publicly that the insurer's ACA compliance was to be determined by the federal agencies, but by law insurance oversight is a state responsibility. It would seem, at least here in Fl, there is not much scrutiny or inspection. So far, none of the insurer's claims have been subject to public scrutiny.

One good point of comparison is the national average employer paid group premium, which is tracked by Kaiser health (here). For last year is was $6,251, or $520 monthly, the average deductible was $1300. By contrast, the cost of a similar policy with BCBS here ranges from $570 - $1620 (age based pricing) for the broad network and $420 - $1360 for the narrow network. Prices for individual policies are far higher than the equivalent employer provided policy.

If indeed the client base is far more ill than average, the ACA considered this and included risk compensation. This money, however, is not being paid to the insurance companies, as congress has chosen to not budget the funds.
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Old 02-12-2016, 03:59 PM   #29
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I've long wondered this. I tracked prices for individual and Medicare supplemental policies for major insurers over 3 years. MediGap policies have increased at <3% annually while individual policies have increased >25% per year.
While not apples to apples insurance coverage risk, that still is quite a surprising, and disturbing, statistic as you would expect the MediGap pools to be much higher medical usage! And isn't MediGap more first dollar loss in nature as well?



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Old 02-12-2016, 06:00 PM   #30
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I've long wondered this. I tracked prices for individual and Medicare supplemental policies for major insurers over 3 years. MediGap policies have increased at <3% annually while individual policies have increased >25% per year. .....
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While not apples to apples insurance coverage risk, that still is quite a surprising, and disturbing, statistic as you would expect the MediGap pools to be much higher medical usage! And isn't MediGap more first dollar loss in nature as well? ...
But wouldn't the pricing for Medigap just be covering Medicare deductibles and co-pays and those increase modestly each year whereas individual health insurance covers all medical costs which have been increasing dramatically each year recently?

That said, >25% is pretty steep.

I'll probably get flamed for this but the current system (both before and after Obamacare) is so broke I think some cataclysmic change is needed... it is hard for me to see the current scheme ever working well at a reasonable cost given how broken it is.
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Old 02-12-2016, 06:18 PM   #31
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Very few countries us a single payer system. Many use private insurance companies operating in a government regulated market. The US system manages to combine the worst of socialist bureaucracy with the worst of capitalist exploitation. This system delivers healthcare to a smaller fraction of the population at twice the cost of most other countries. Unfortunately changing the direction of this system will be very difficult as it too engrained and the US refuses to learn from the experiences of other countries. The US leads the world in many things, healthcare is not one of them.
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BCBSNC announces it is considering dropping ACA plans next year.
Old 02-12-2016, 06:40 PM   #32
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BCBSNC announces it is considering dropping ACA plans next year.

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Very few countries us a single payer system. Many use private insurance companies operating in a government regulated market. The US system manages to combine the worst of socialist bureaucracy with the worst of capitalist exploitation. This system delivers healthcare to a smaller fraction of the population at twice the cost of most other countries. Unfortunately changing the direction of this system will be very difficult as it too engrained and the US refuses to learn from the experiences of other countries. The US leads the world in many things, healthcare is not one of them.

And this is because the US, as Winston Churchill once said, can be counted upon to do the right thing after it has exhausted all other possibilities. 🤔 We're still in the "exhaust phase"!


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Old 02-12-2016, 06:57 PM   #33
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And this is because the US, as Winston Churchill once said, can be counted upon to do the right thing after it has exhausted all other possibilities. 🤔 We're still in the "exhaust phase"!


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Yes I think that's well put. Unfortunately it takes a lot of time to test out all the healthcare options and it's the US population that ends up being the "guinea pigs". One thing I don't like about the ACA is it has stopped states from experimenting by taking MA's Romneycare and expanding it across the country.
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Old 02-12-2016, 08:57 PM   #34
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