New HC rates with Obamacare

[Fermion]

Quote:

Originally Posted by Malcolm2 You could assume that, but I don't think it would be wise to plan for that actually happening. Many singles in their 20's will undoubtedly decide not to subsidize the rest of us. Other than being 'encouraged' to do so by their folks (which as we know is not very effective at that age), they don't plan to get sick so why would they?

Well, yes, until the fines become 2.5% of their income. I was making $70,000 a year at age 27. The fine for not having HC would be $1750 plus I would be out of pocket $5000 or so when I get a compound fracture in my arm riding dirt bikes

[photoguy]

Quote:

Originally Posted by Malcolm2 Many singles in their 20's will undoubtedly decide not to subsidize the rest of us. Other than being 'encouraged' to do so by their folks (which as we know is not very effective at that age), they don't plan to get sick so why would they?

Well they could still be financially ruined by an emergency visit as you can't buy insurance on the way to the hospital. Bronze plan rates for young people (less than 30) don't really seem very high (maybe a little more than employer subsidized plans) so why not?

[M Paquette]

If you get a high rate quote in a letter from your insurer, it might be worth your while to take a look at the state insurance exchange. The 'old reliable' companies are getting competition, something that they aren't used to.

I've already got our new rates for Bronze plans. For DD, we got a 'huge' rate increase for her individual insurance, one of those really scary percentages that the editorial writers like to carry on about. It's about $60 a month. The rates for DW and I went down a bit, slightly more than DD's went up. Considering that unsubsidized individual insurance for the three of us is well over $1000 a month for our HD/HSA plans, and the rates for DW and I dropped slightly, it's a wash for our budget.

Folks seeing large rate increases should check the exchanges for better rates for the same level of coverage. It might also be educational to compare the level of coverage, exclusions, and limits of old policies against the exchange plans. DD had one of those college student Mega-Life plans that had fairly silly carve-outs and caps ($2,500 max for hospitalization? That's 30 minutes in the ER if they don't do anything!) I'm not surprised that a real insurance policy costs more.

[FIRE'd@51]

While it appears that premiums may be lower, is anyone really sure what specifically you are purchasing when you buy an exchange policy? This article is from the New York Times.

Lower Health Insurance Premiums to Come at Cost of Fewer Choices

[Mulligan]

Quote:

Originally Posted by FIRE'd@51 While it appears that premiums may be lower, is anyone really sure what specifically you are purchasing when you buy an exchange policy? This article is from the New York Times. Lower Health Insurance Premiums to Come at Cost of Fewer Choices

Being a person who will be forced to pay for more coverage and services than needed or used, I actually welcome this idea as it will keep the cost down for me. Although I have a doctor, I have no problems switching to someone else, as I have no medical issues. All I need to do is when I purchase the plan is find out where I can go for services and/or emergencies and that is where I go if I have to.

[Midpack]

Quote:

Originally Posted by 2B We can assume the basic premise of the ACA will remain. Younger people will subsidize the older people in the plan. The healthy will subsidize the sick. We will all pay for more coverage than we might have selected had we had a choice. You can call that the "social contract" or something else.

I thought so, but when I looked at specifics I noticed that the older you are the more you pay (before subsidies). RI for example, a 65 yo pays triple the premium of a 21 yo not matter which plan you look at (gold, silver, etc.). IIRC 3X is the PPACA legal limit, but I suspect most if not all states will have an increasing rate by age. And presumably younger folks will have lower incomes, and therefore greater tax subsidies, further lessening the 'younger will subsidize the older' assumption. FWIW...

[M Paquette]

Quote:

Originally Posted by Midpack I thought so, but when I looked at specifics I noticed that the older you are the more you pay (before subsidies). RI for example, a 65 yo pays triple the premium of a 21 yo not matter which plan you look at (gold, silver, etc.). IIRC 3X is the PPACA legal limit, but I suspect most if not all states will have an increasing rate by age. And presumably younger folks will have lower incomes, and therefore greater tax subsidies, further lessening the 'younger will subsidize the older' assumption. FWIW...

I think that what some are calling an 'age subsidy' is the limit of rate differential by age to 3X. Prior to PPACA, in many states that ratio for old to young rates for a given policy exceeded 5X. Limiting the differential to 3X has the effect of, for a given benefit, raising the lowest rate and lowering the highest rate while maintaining the same acturial cash flow.

[pb4uski]

For some reason, we do not have different premiums for different ages so the younger folks are getting screwed IMHO. Time will tell as to how it will work. Perhaps the thinking is that those who are younger tend to earn less so their subsidies will be higher all else being equal.

On a different subject - I have a faint recollection that under Obamacare that health insurance was going to be able to cross state lines - was that taken out or does it come along later?

[Midpack]

Quote:

Originally Posted by M Paquette I think that what some are calling an 'age subsidy' is the limit of rate differential by age to 3X. Prior to PPACA, in many states that ratio for old to young rates for a given policy exceeded 5X. Limiting the differential to 3X has the effect of, for a given benefit, raising the lowest rate and lowering the highest rate while maintaining the same acturial cash flow.

Very good point, thanks. I do wonder what the "effective multiple" will be, assuming lower wages/greater HC tax breaks for younger participants in the aggregate. More than 3X, but I have no idea how much more...could it be 5X?

[brewer12345]

Quote:

Originally Posted by pb4uski On a different subject - I have a faint recollection that under Obamacare that health insurance was going to be able to cross state lines - was that taken out or does it come along later?

Not bloody likely. That would require the repeal of the McCarran-Ferguson Act, which ain't happening as far as I can tell.

[daylatedollarshort]

Quote:

Originally Posted by pb4uski On a different subject - I have a faint recollection that under Obamacare that health insurance was going to be able to cross state lines - was that taken out or does it come along later?

In our plan choices on our state exchange, there are some Anthem plans with "Multi State" in the name of the plan, but I don't see any details yet on what that specifically means.

[explanade]

Are you sure about free doctors visits.

The plans I've seen out here in CA shows higher copayments when you go from higher plans to lower plans, gold to silver to bronze.

They all have same OOP maximums so it seems like the higher premiums wouldn't be worth it unless you know you're going to be using a lot of services and making copayments.

[donheff]

Quote:

Originally Posted by Midpack While that's a huge increase, it still seems cheap compared to what health care actually costs from everything I've read. I have to assume costs in 2013 are even higher than 2009. If my wife and I get coverage for $433/month when/if we go on an ACA exchange, we'll be over the moon pleased... I've been surprised at how low the rates are on all the exchanges I've looked at, thanks to other members posts here.

+1. When I read rates like the OP posted I have to wonder what was in the policy and how have things changed under the ACA. I would guess that it must have been pretty bare bones and the replacement policy must have more, although still not top drawer. I pay more out of pocket for my Federal policy than the OP pays and I am only contributing 30% of the total cost. Part of the ACA concept is that people who currently have substandard policies will be pushed into more comprehensive policies. That is the price we will pay for universal health insurance. In the case of the ACA it comes out of our pockets (or our employers') in direct payments to insurance companies. Had we gone with a single payer system like Medicare it would have come out of our pockets in the form of higher taxes. Either way, we have to pay to play.

Of course we can always start all over again -- hello pre-existing condition exclusions and ER care.

[davidfin]

I Fire'd January 1, 2013 and went from company paid health care to purchase on my own. Wow, $3500 deductable $12K out of pocket limit HSA plan at $890/month for myself and DW. Largest single budget item. CoverOregon (insurance exchange) calculator estimates premium for same coverage will drop in half or more. This is based on subsidies since our income has dropped significantly living on a proportion of savings. Healthcare under the affordable care act is not means tested just income tested. There is a lot of miss information out there. Do your research.

[Running_Man]

The Bronze plan yes will have low rates, but don't most of these plans make you the first full $2000 of charges as a deductible in the plan before the plan pays only 60% of your charges (other than preventative medicine) up to $6000 in out of pocket charges along with $45 co-pays, unless your net income is less than $28,000?

So that if you have $12,000 in actual medical charges, you will pay $6,000 plus premiums of $1,000 - $2,000 resulting in a need to budget 600-700 per month as an individual for this "low cost" insurance. I think people looking at the premium charges and not looking at cost of insurance will be shocked next year when they go to the doctor and realize they have no effective insurance. These plans are really more of a catastophic type plan.

Obamacare: Is a $2,000 deductible 'affordable?' - Jun. 13, 2013

[Mulligan]

Quote:

Originally Posted by Running_Man The Bronze plan yes will have low rates, but don't most of these plans make you the first full $2000 of charges as a deductible in the plan before the plan pays only 60% of your charges (other than preventative medicine) up to $6000 in out of pocket charges along with $45 co-pays, unless your net income is less than $28,000? So that if you have $12,000 in actual medical charges, you will pay $6,000 plus premiums of $1,000 - $2,000 resulting in a need to budget 600-700 per month as an individual for this "low cost" insurance. I think people looking at the premium charges and not looking at cost of insurance will be shocked next year when they go to the doctor and realize they have no effective insurance. These plans are really more of a catastophic type plan. Obamacare: Is a $2,000 deductible 'affordable?' - Jun. 13, 2013

I'm afraid many of the naive buying out there will not understand this. They will not have the money to cover the deductible even if they are getting the coverage practically free. I freely on my own had a $5500 deductible, and zero co pay after meeting deductible. However my premium for this was only $88 and I was getting a HSA tax break. Based on other states premiums I do not see how I will be under $300 for a bronze at my age of 49.

[Fermion]

So what are you supposed to do with ACA if you move from state to state constantly (ie, traveling around in an RV)? I haven't really seen a firm answer here.

[brewer12345]

Quote:

Originally Posted by Fermion So what are you supposed to do with ACA if you move from state to state constantly (ie, traveling around in an RV)? I haven't really seen a firm answer here.

In that case you would want a provider with a national provider network. On blm land you are likely to bleed out before you get to a doc anyway.

[Htown Harry]

The PPACA include a section on "multi-state plans".

Quote:

OPM's Multi-State Plan Program (MSPP) is a new program established under §1334 of the Affordable Care Act, which directs the U.S. Office of Personnel Management (OPM) to contract with private health insurance issuers to offer at least two Multi-State Plans (MSPs) in each state which are available to eligible individuals and small businesses and offered through the Health Insurance Marketplace (Marketplace).

Here's a FAQ, although it appears somewhat dated:

Insurance FAQs

This is a much more recent article, from this month, that attempts to explain what this means to a person residing in different states during the year.

6 Things Boomers Need to Know About Obamacare - Yahoo Finance

Reading the snippets that come up in Google search, I get the impression multi-state plans were not a top priority for October 1.

Quote:

4. You need to enroll in the ‘right’ state Each state will have a health-insurance marketplace, and people must sign up for insurance in the state of their primary residence. Plans will include coverage for any emergencies that happen when you’re traveling out-of-state. Snowbirds who split their time between states will likely have multistate plans to choose from on the marketplaces. Details for these plans will become available later this month, when the Office of Personnel Management announces the contracts, according to a spokesperson. Some may be regional plans that cover a large metropolitan area that crosses state boundaries. But it’s possible that a given multistate plan may not meet the needs of someone who spends, say, half the year in New York and the other half in Florida. Currently, some snowbirds are served by what’s known as a “wraparound network,” whereby a claims-management company contracts with the primary insurer to lease a provider network that the insurer’s members can access when they travel outside the primary network area, said Terri Welter, principal at ECG Management Consultants, a Seattle-based consulting firm to the health-care industry. While it’s not clear yet, it’s possible this type of system may continue with some plans on the exchanges, she said.

[MichaelB]

The ACA is about many things, but young subsidizing old and healthy subsidizing sick are not among them. In fact, in the "other" insurance market, which includes group policies and covers about 90% of private insurance in the US, individual premiums do not differ because of age, health or pre-existing condition (in most cases). Premiums differ due to coverage. Insurers are not allowed to exclude, everyone can join if they are eligible members of the insured group, and all group members get the same price for the same coverage.

Price discrimination for the same coverage is present in the individual and very small small group market, the target of the exchanges, and covers around 10% of the marketplace. Even after all the ACA measures are implemented, policies in the exchanges will still price to age far more than most group policies. The discrimination is reduced but still exists.

If anything, the ACA is trying to make individual and very small insurance look more like the large group insurance. The question here is not why a grandfathered plan premium is rising, even when it is not implementing yet many of the ACA mandates. The real question is why is the current premium below the US average for group insurance, and what is changing within that policy to drive a price increase without a corresponding change in coverage.