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Old 03-25-2013, 11:02 AM   #41
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So what are we talking in dollar terms? $300/mo in 2014 vs $100/mo now? 3x sounds scary but $200 more per month isn't nearly as scary.

Comparing the best pricing for healthy to the guaranteed issue pricing is misleading. How does the 2014 pricing compare to state high risk pool rates (if they have them in the jurisdictions you are referring to)?
I do believe $300 is 3x $100. $200/mo extra spent on health insurance is also $200/mo that is not spent in other areas of the economy. For families the increase in premiums will be significantly higher than $200/month in most states, especially those states on the lower end of the cost scale for individual policies.

Comparing the best pricing for healthy people to guaranteed-issue pricing is not misleading since the existing policies are obtainable at the current rates, meanwhile in 2014 only the guaranteed-issue pricing will be available. There have been rumors that many insurance companies will dump their entire block of existing business on 12/31/13 so that they don't have to reprice the policies to comply with 2014 rules and have a bunch of pissed off customers complaining that their rates doubled or tripled. This is a very real issue and it's going to crush the middle class.

Even people that qualify for subsidies could see their cost increase. For example, let's take a family of 4 making $90k and assume they qualify for a subsidy limiting their cost to 9.5% of income, or $712/month. That same family may only be paying $400/month now, increasing their cost by $300/month even with taxpayers subsidizing the other $400+ per month since the real cost of the policy will be $1000+ per month, and more likely in the $1300-1500 per month range.
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Old 03-25-2013, 11:03 AM   #42
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Proposed rates may not be the final rates. In CA, the insurance commissioner does not have the power to approve or deny rate increases, so the insurer can do what they want. In NY they have authority and have denied/reduced the proposed increases.

New York health insurance will cost $500 million less due to prior approval - The Business Review
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Old 03-25-2013, 11:08 AM   #43
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Even people that qualify for subsidies could see their cost increase. For example, let's take a family of 4 making $90k and assume they qualify for a subsidy limiting their cost to 9.5% of income, or $712/month. That same family may only be paying $400/month now, increasing their cost by $300/month even with taxpayers subsidizing the other $400+ per month since the real cost of the policy will be $1000+ per month, and more likely in the $1300-1500 per month range.
$300/mo increase doesn't seem too scary for folks making $90k/yr. That is a hypothetical loss of 4% of their gross salary. Just a little more damaging than going a year without a cost of living raise from your employer in a 3%/yr inflationary environment. Thanks for providing the context.

As for worries the money is disappearing, that money is going somewhere in the economy (insurers and their staffs, drs, nurses, hospitals, etc).
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Old 03-25-2013, 11:16 AM   #44
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I do believe $300 is 3x $100. $200/mo extra spent on health insurance is also $200/mo that is not spent in other areas of the economy. For families the increase in premiums will be significantly higher than $200/month in most states, especially those states on the lower end of the cost scale for individual policies.

Comparing the best pricing for healthy people to guaranteed-issue pricing is not misleading since the existing policies are obtainable at the current rates, meanwhile in 2014 only the guaranteed-issue pricing will be available. There have been rumors that many insurance companies will dump their entire block of existing business on 12/31/13 so that they don't have to reprice the policies to comply with 2014 rules and have a bunch of pissed off customers complaining that their rates doubled or tripled. This is a very real issue and it's going to crush the middle class.

Even people that qualify for subsidies could see their cost increase. For example, let's take a family of 4 making $90k and assume they qualify for a subsidy limiting their cost to 9.5% of income, or $712/month. That same family may only be paying $400/month now, increasing their cost by $300/month even with taxpayers subsidizing the other $400+ per month since the real cost of the policy will be $1000+ per month, and more likely in the $1300-1500 per month range.
Just curious: what will happen with insurance agent commissions when PPACA takes effect? Will you guys lose out on a ton of individual business as people flock to the exchanges and eschew using an agent?
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Old 03-25-2013, 11:19 AM   #45
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Proposed rates may not be the final rates. In CA, the insurance commissioner does not have the power to approve or deny rate increases, so the insurer can do what they want. In NY they have authority and have denied/reduced the proposed increases.

New York health insurance will cost $500 million less due to prior approval - The Business Review
New York is the most expensive state in the country for health insurance so a reduction in cost there is no surprise. Their DOI is a nightmare for insurance companies so there is limited choice of carriers/plans. Their current laws require companies to charge the same price regardless of health or age, so a 25 year old pays the same price as a 64 year old, which is why the individual health insurance market in NY is pretty much non-existent.

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$300/mo increase doesn't seem too scary for folks making $90k/yr. That is a hypothetical loss of 4% of their gross salary. Just a little more damaging than going a year without a cost of living raise from your employer in a 3%/yr inflationary environment. Thanks for providing the context.

As for worries the money is disappearing, that money is going somewhere in the economy (insurers and their staffs, drs, nurses, hospitals, etc).
Tell that to the people making $90k/year that are still struggling. $90k/year doesn't go that far in a high cost of living area, and it's still an extra $300/mo that isn't available for other discretionary spending or savings. Taxes also have to be raised to cover the subsidized part of the premium. If the premium is $1200/mo and the family was previously paying $400/mo and is now forced to pay $700/mo, that means $500/mo has to come from taxpayers. Please don't tell me that the extra $800/mo will have no effect on both an individual and national level because it obviously will. There's no free lunch.
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Old 03-25-2013, 11:22 AM   #46
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Just curious: what will happen with insurance agent commissions when PPACA takes effect? Will you guys lose out on a ton of individual business as people flock to the exchanges and eschew using an agent?
Nobody knows what commissions will be yet. If they are done the same way as Medicare Advantage then agents will still be able to make money, but if states decide that any policies bought through the exchange with a subsidy disqualifies the agent from receiving a commission, there will be a rapid exodus of agents from the business. A lot of agents already quit selling health insurance when commissions were cut in half back in 2010 when the law was passed.

Health insurance is still incredibly confusing for people and the average person will still seek out the help of an agent. Medicare Advantage and Medicare supplement plans are guaranteed-issue and there is a huge market for agents there because all of the rules/regulations and different plans are so confusing. Rather than spending time doing medical underwriting assessments, agents will probably spend more time helping people figure out their subsidies and which plans will have the lowest total expected cost over the course of the year factoring in the premiums plus the known deductible/Rx expenses.

There is about 0% chance that buying a health insurance policy in 2014 will be as simple as ordering something from Amazon as some have claimed.
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Old 03-25-2013, 11:29 AM   #47
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There is about 0% chance that buying a health insurance policy in 2014 will be as simple as ordering something from Amazon as some have claimed.
Why? If all individual plans sold in the new world are standardized, what is so difficult to understand?
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Old 03-25-2013, 11:31 AM   #48
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Right now, the cost of insurance in 2014 is my main concern and possible deal breaker. It's been a while but when P&G took over we had plant meetings about retiree insurance and what would happen. Apparently Gillette agreed to let people over a certain age and seniority keep the Gillette retiree medical insurance at reasonable cost. We have a choice between the two. Gillette's insurance was much better than P&G's. I'm not saying P&G's isn't good but Gillette was through United Health Care and the deductibles were lower but the premiums were slightly higher. I was very happy with United Health Care. They were very good to pay medical costs. BC/BS, not so much. This year P&G allowed us a choice during enrollment between BC/BS and UHC since so many people liked UHC better.
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Old 03-25-2013, 11:37 AM   #49
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Why? If all individual plans sold in the new world are standardized, what is so difficult to understand?
They are not going to be standardized, they just have to meet the actuarial value requirements and include the Essential Health Benefits, so each company will still have different benefits. Medicare supplement plans are standardized and most people use an agent to buy those too. Few people will understand the subsidies or plan benefits and will need help...just the way it is.
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Old 03-25-2013, 11:40 AM   #50
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There is about 0% chance that buying a health insurance policy in 2014 will be as simple as ordering something from Amazon as some have claimed.
I am curious how this has worked in Massachusetts with Romneycare. From what little I have admittedly seen, the process there seem pretty straight forward. And isn't this what the ACA is more or less derived from?
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Old 03-25-2013, 11:54 AM   #51
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I am curious how this has worked in Massachusetts with Romneycare. From what little I have admittedly seen, the process there seem pretty straight forward. And isn't this what the ACA is more or less derived from?
i have purchased in mass. using the health care connector.

it was simple-but i did not qualify or ask for subsidy

i detailed the process on another thread signing up for health connector mass.

i,m not sure on links. its currently on page 2 of this health section
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Old 03-25-2013, 12:08 PM   #52
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They are not going to be standardized, they just have to meet the actuarial value requirements and include the Essential Health Benefits, so each company will still have different benefits. Medicare supplement plans are standardized and most people use an agent to buy those too. Few people will understand the subsidies or plan benefits and will need help...just the way it is.
Ah. Thanks. I thought the various levels of plans were going to be standardized the way Med Sup policies are today.
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Old 03-25-2013, 12:38 PM   #53
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Originally Posted by dgoldenz

New York is the most expensive state in the country for health insurance so a reduction in cost there is no surprise. Their DOI is a nightmare for insurance companies so there is limited choice of carriers/plans. Their current laws require companies to charge the same price regardless of health or age, so a 25 year old pays the same price as a 64 year old, which is why the individual health insurance market in NY is pretty much non-existent.

Tell that to the people making $90k/year that are still struggling. $90k/year doesn't go that far in a high cost of living area, and it's still an extra $300/mo that isn't available for other discretionary spending or savings. Taxes also have to be raised to cover the subsidized part of the premium. If the premium is $1200/mo and the family was previously paying $400/mo and is now forced to pay $700/mo, that means $500/mo has to come from taxpayers. Please don't tell me that the extra $800/mo will have no effect on both an individual and national level because it obviously will. There's no free lunch.
To add to your thoughts, the base compounding of future increases will be dramatic too. Take the annual 10% increase model as an example. In 7 years that $400 a month premium is $800. That $1200 a month premium is $2400. A difference of now $1600 a month! Not exactly chump change. Now hopefully increase wont mirror the recent past, but even 5% annual will show a dramatic increase differential over a small course of time.
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Old 03-25-2013, 01:02 PM   #54
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Why? If all individual plans sold in the new world are standardized, what is so difficult to understand?
All plans sold in the state health exchanges must satisfy a list of "essential health benefits" established by HHS. They are
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The Act defines certain categories of benefits as "Essential Health Benefits." The categories of essential health benefits are:

Ambulatory patient services
Emergency services
Hospitalization
Maternity and newborn care
Mental health and substance use disorder services, including behavioral health treatment
Prescription drugs
Rehabilitative and habilitative services and devices
Laboratory services
Preventive and wellness services and chronic disease management
Pediatric services, including oral and vision care
Here is a PDF by UHC with some detail and explanation http://www.uhc.com/live/uhc_com/Asse...s_Overview.pdf

The UHC section on essential benefits Essential Health Benefits

The policies are then offered in four categories, broken down by % coverage of the actuarial value. Not as comprehensive as a Medicare supplement, but nonetheless far more comprehensive and standardized than what we have today.
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Old 03-25-2013, 02:35 PM   #55
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All plans sold in the state health exchanges must satisfy a list of "essential health benefits" established by HHS. They are


Here is a PDF by UHC with some detail and explanation http://www.uhc.com/live/uhc_com/Asse...s_Overview.pdf

The UHC section on essential benefits Essential Health Benefits

The policies are then offered in four categories, broken down by % coverage of the actuarial value. Not as comprehensive as a Medicare supplement, but nonetheless far more comprehensive and standardized than what we have today.
Thanks.

So enrollment will be open every year, right? If one chooses to switch plans from one year to the next there will be no underwriting allowed and you can swap at will. That implies that I could take a cheaper bronze plan and if I developed a health problem that required lots of expensive care I could swap to a much more comprehensive plan at my option. That correct?
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Old 03-25-2013, 02:35 PM   #56
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Now hopefully increase wont mirror the recent past, but even 5% annual will show a dramatic increase differential over a small course of time.
Especially when income isn't growing for most people, let alone keeping up with the CPI.
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Old 03-25-2013, 03:14 PM   #57
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Thanks.

So enrollment will be open every year, right? If one chooses to switch plans from one year to the next there will be no underwriting allowed and you can swap at will. That implies that I could take a cheaper bronze plan and if I developed a health problem that required lots of expensive care I could swap to a much more comprehensive plan at my option. That correct?
Specific procedures have not been announced, but we do know some things. Enrollment "typically" has been a 45 day window, beginning Sept/ Oct, for Jan 1 effective date. I would bet this is how it is rolled out.

For certain, you can change from to any plan effective Jan 1, no questions asked, no underwriting. The means from bronze to platinum plans or the other way around. Whoever manages the state exchange decides what plans are offered, but they must meet HHS guidelines, and at least two must offer national coverage.

Members of congress and their staffs must procure their coverage from their state exchange.
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Old 03-25-2013, 03:17 PM   #58
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As a health insurance agent, I can confirm that this is true, and would add that the estimates of increases stated are on the low side. My average client is a family with parents about 40 years old with two kids and spending an average of $300-600/month. In 2014, the cost for this family with no subsidy will likely be well over $1,000/month, which most people simply can't afford and will not pay. Just because you make $100k combined doesn't mean you're going to be able to spend $15k/year on health insurance, not including any costs that apply towards the out-of-pocket maximums.

California's "health exchange" website is now active and features this fun calculator - Health Insurance Calculator | Covered California

A married couple age 60 making $62,000 can expect a monthly premium of $1,723, a tax credit of $1,232/month and estimated final premium of $491/month. A married couple age 60 making $62,500 can expect a monthly premium of $1,723 , a tax credit of $0, and estimated final premium of $1,723/month. Any econ majors want to calculate that marginal tax rate? That is for a policy with a $12,800 annual out of pocket max, which is higher than most of the individual plans offered today. Only $20k/year in premiums and $13k out of pocket? Sounds pretty affordable. Surely everyone eligible for a salary increase from $62k to $63k would love to have such a promotion.

As of now, 2014 expected pricing has been released in two states, CA and TX. In both states, the 2014 cost of coverage is literally 3x the current cost. Many of these plans will likely have limited regional networks and restricted pharmacy coverage.

Here's a link to Humana's plans in Texas - https://www.humana-one.com/secured/i...ce-quotes.aspx

Try inputting some fake info and getting a quote, you can use zip code 77005. All of the 2014-compliant plans are labeled with Bronze, Silver, Gold, or Platinum. Notice the price of all of the other existing plans in comparison to the 2014 ones.

Example: 60-year-old couple with two kids. Current plans - $635-1,987/month. 2014 plans - $1,693-5,236/month.

Example 2: 28-year-old couple with two kids. Current plans - $271-949/month. 2014 plans - $1,162-3,589/month.

Humana did not go through the trouble of creating these plans and getting the pricing approved by the state DOI for no reason. Small group health insurance plans are also going to see large price increases since PPACA states that group policies can no longer be medically underwritten starting in 2014, and the same 3-1 age banding premiums and unisex rates must apply to small group coverage.
Will give it a try and some reading but first question is how can the Texas Exchange be up and running as they deferred to the Feds to run it. Have they already seceded again and this is their new country plan?
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Old 03-25-2013, 03:22 PM   #59
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Have they already succeeded again and this is their new country plan?
Whether or not they've succeeded is a matter of debate, but they definitely haven't seceded.
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Old 03-25-2013, 03:28 PM   #60
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Gotta love spell check. I should have watched it more closely. Thank you REW.
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