Obamacare

[Brat]

About 10 years ago I did an analysis of the health care plans offered through OPM. DH & I were in great health with only one generic prescription. I entered the premiums, copays, and deductibles for each. At the end of the year, with routine preventive care and no serious medical issues, they were a wash. Plans with large deductibles ($10,000+) were not offered.

Consider the fact that most American families don't have savings to cover a large deductible. Because they may see a large deductable plan as less expensive that will be their choice. They will skimp on preventative care and/or will be unable to cover the deductible in a medical emergency - cost shifting to other insured.

There are a lot of ways to save money in health care. For example walkers are a blessing for many but why do they need to be new? When someone doesn't need a walker any more why not make it available to others as no cost? It is a small thing, I know, but small expenses are cumulative. I couldn't give my Mother's walker away.

[mpeirce]

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Originally Posted by Mulligan While I am certainly in agreement with you, My guess is it was not an oversight. Lower deductible premiums naturally result in higher premiums collected. You force the healthy people to pay for insurance they don't need, so to help pay for those who need to use it.

I don't think it was an oversight either. The people who authored the PPACA were the same folks who were fighting against HDHP/HSA's in the past.

[misanman]

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The people who authored the PPACA

Hope this isn't too far off topic, but who did author PPACA? Despite the popular nickname, I'm guessing it wasn't the President, but I guess I could be wrong.

Just wondering.

[FinanceDude]

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Originally Posted by MichaelB ETA: If it wasn't clear, let's keep election rhetoric out of the thread.

Well, your brought it up........ I believe the comments were "bending the cost curve down". Paul Ryan spoke at length and explained at the hearings on health care about how it would not work, according to the CBO. Losts of youtube videos, etc..........

[Mulligan]

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Originally Posted by Brat About 10 years ago I did an analysis of the health care plans offered through OPM. DH & I were in great health with only one generic prescription. I entered the premiums, copays, and deductibles for each. At the end of the year, with routine preventive care and no serious medical issues, they were a wash. Plans with large deductibles ($10,000+) were not offered. Consider the fact that most American families don't have savings to cover a large deductible. Because they may see a large deductable plan as less expensive that will be their choice. They will skimp on preventative care and/or will be unable to cover the deductible in a medical emergency - cost shifting to other insured. There are a lot of ways to save money in health care. For example walkers are a blessing for many but why do they need to be new? When someone doesn't need a walker any more why not make it available to others as no cost? It is a small thing, I know, but small expenses are cumulative. I couldn't give my Mother's walker away.

This is what fascinates me about the discussion of health insurance. I am not questioning your math in any way, Brat, but for me my math didn't work that way. It seems like my costs are a far outlier, for which I don't understand as I am not getting any inside favors anywhere. When I retired, (and before Obamacare) I had a chance to stay on my group plan at about $500 a month, $1k deduct, with usual standard co pays. I instead went on an individual $5500 deductible, 0 copay after deductible. The premium started out at $73 over 3 years ago, and now is at $76. With my $3k HSA deduction, my insurance is essential "free". I have saved over $18k my doing this, but have a nice stash reserved now in my HSA. For me, the higher the deductible, the more the savings. I guess it comes down to how much preventive care and meds a person needs, which at this point I am fortunate I need neither.

[Texas Proud]

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Originally Posted by ERD50 Well, I'm sure some people would think the govt is going too far in mandating seat belts which makes it illegal to manufacture a car w/o seat belts. But there is a clear, demonstrable benefit to a seat belt mandate, and (in theory at least), the public supports this through their elected officials. I fail to see any clear, demonstrable benefit to declaring high-deductible policies to be 'non-conforming'. I'd be willing to keep $5,000 in escrow if that was required to purchase a $5,000 deductible policy (or some equivalent proof that one could cover the deductible) - I think something like that would be reasonable. I think this is an over-sight and should be corrected, the only other explanation I can think of is worse. -ERD50

I guess that I missed it.... but is there a mandate that you can not have a $5K deductible


I was told from our insurance agent that the plan we have is compliant and it has a $5K in network deductible and a $15K out of network deductible... X3 for a family....

[bUU]

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Originally Posted by ERD50 Well, I'm sure some people would think the govt is going too far in mandating seat belts which makes it illegal to manufacture a car w/o seat belts. But there is a clear, demonstrable benefit to a seat belt mandate, and (in theory at least), the public supports this through their elected officials.

So basically you, with regard to ACA, are like those folks who don't see the demonstrable benefits to a seat belt mandate.

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Originally Posted by ERD50 I fail to see any clear, demonstrable benefit to declaring high-deductible policies to be 'non-conforming'.

The government isn't declaring high-deductible policies to be 'non-conforming'. They're declaring only excessively high-deductible policies to be 'non-conforming'. If there wasn't an upper limit, insurers would essentially bypass the ACA's mandate provision entirely by setting a $1M deductible per individual. It would be like the seat belt law exempting vehicles that cost less than $1M.

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Originally Posted by ERD50 I'd be willing to keep $5,000 in escrow if that was required to purchase a $5,000 deductible policy (or some equivalent proof that one could cover the deductible)

I could endorse that as a friendly amendment to the ACA, but politically I think it is a non-starter because from the one side it makes ACA more acceptable, which they have a vested interest in obstructing, and from the other side it makes ACA more elitist, which they have a vested interest in opposing.

Are you really complaining about the difference between a $4,375 and $5,000 deductible?

[pb4uski]

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Originally Posted by ERD50 Well, I'm sure some people would think the govt is going too far in mandating seat belts which makes it illegal to manufacture a car w/o seat belts. But there is a clear, demonstrable benefit to a seat belt mandate, and (in theory at least), the public supports this through their elected officials. I fail to see any clear, demonstrable benefit to declaring high-deductible policies to be 'non-conforming'. I'd be willing to keep $5,000 in escrow if that was required to purchase a $5,000 deductible policy (or some equivalent proof that one could cover the deductible) - I think something like that would be reasonable. I think this is an over-sight and should be corrected, the only other explanation I can think of is worse. -ERD50

I think it is a popular misconception that high deductible health insurance plans that are HSA compatible will go away under ObamaCare. Insurers in my state plan to offer HSA compatible plans and have proposed premiums for such plans that are ~20% more than what I pay now but ~15% less than my COBRA HDHI rates. Also see this recent Forbes article.

[bUU]

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Originally Posted by misanman Hope this isn't too far off topic, but who did author PPACA? Despite the popular nickname, I'm guessing it wasn't the President, but I guess I could be wrong. Just wondering.

ACA is ostensibly a copy of Romneycare, implemented in Massachusetts in 2006. Of course, Mitt Romney didn't write the legislation, but rather only signed it. Like any legislation, it's generally useless to try to ascribe authorship: It's government by committee.

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Originally Posted by Texas Proud I guess that I missed it.... but is there a mandate that you can not have a $5K deductible

What I've overheard my spouse talking about is that the cap on the deductible is actually related to a cap on annual out-of-pocket potential. I think it's $6,750 or something like that. So the deductible would be set based on a formula working down from there, factoring in the impact of the co-payments. Regardless, the way I read ERD's message is that s/he would consider $5K "high".

[rbmrtn]

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Originally Posted by Mulligan It seems like my costs are a far outlier, for which I don't understand as I am not getting any inside favors anywhere.

I've never been able to figure how you got a deal like that. I'm sure I would want to keep that as well. On the other side... I don't know anyone over 50 that has been able to even purchase an individual plan. I have no pre existings, don't take any meds and was rejected.

I don't know if it was a factor on HDHPs but it is because the average joe doesn't have the means to cover a deductible that high. We have threads here all the time about how little people have in savings... for some covering the deductible would lead to bankruptcy. Myself, I would prefer a HDHP and pay for what little I use myself and not deal with the insurance unless something catastrophic happened.

[Mulligan]

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Originally Posted by rbmrtn I've never been able to figure how you got a deal like that. I'm sure I would want to keep that as well. On the other side... I don't know anyone over 50 that has been able to even purchase an individual plan. I have no pre existings, don't take any meds and was rejected. I don't know if it was a factor on HDHPs but it is because the average joe doesn't have the means to cover a deductible that high. We have threads here all the time about how little people have in savings... for some covering the deductible would lead to bankruptcy. Myself, I would prefer a HDHP and pay for what little I use myself and not deal with the insurance unless something catastrophic happened.

Wow, that is incredible. Did they give you a reason for rejection? That would infuriate me if I were you. I had 3 retiree friends over 50 joined my plan when they retired and had no problems being accepted, all at the rate quoted online. I have certainly received an education on this forum concerning the other side of the coin, so to speak. My experience has only been cheap insurance, and minimal health costs. I went and did my annual bloodwork physical three years late last week. Might as well waited another year as it was the same as then, and could have saved me a $100 waiting another year. I really only went because I don't want my doctor to drop me, as I here some do that now if you do not go, regularly.

[ERD50]

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Originally Posted by bUU So basically you, with regard to ACA, are like those folks who don't see the demonstrable benefits to a seat belt mandate.

No, I'm only addressing this specific issue (as I understand it) of high-deductible policies being non-conforming.

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The government isn't declaring high-deductible policies to be 'non-conforming'. They're declaring only excessively high-deductible policies to be 'non-conforming'. .... Are you really complaining about the difference between a $4,375 and $5,000 deductible?

What is 'excessively high'? Where does the $4,375 number come from? I don't know, and don't know where to go to find out - heck, many of these provisions seem to be still TDB by HSS. I was going off general comments I've heard that these high-deductible polices are considered 'non-conforming', so please enlighten me if this is not the case. It's hard to follow when some people insist on making distinctions between 'not allowed' and 'illegal'.

-ERD50

[travelover]

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Originally Posted by Mulligan Wow, that is incredible. Did they give you a reason for rejection? That would infuriate me if I were you. I had 3 retiree friends over 50 joined my plan when they retired and had no problems being accepted, all at the rate quoted online. ......

Puzzling. Does this plan have a low maximum payout? Gotta be something.

[MichaelB]

HSA and other high deductible policies are included in the PPACA. This has been confirmed here and elsewhere.

Has Mulligan's health care policy been cancelled? All I recall was a concern on his part that it might not be renewed. How that led to a discussion on the reasons for the cancellation is a mystery.

[ERD50]

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Originally Posted by bUU ... If there wasn't an upper limit, insurers would essentially bypass the ACA's mandate provision entirely by setting a $1M deductible per individual. It would be like the seat belt law exempting vehicles that cost less than $1M.

I don't this 'logic' holds.

Let's take car ins for example. The ins company plans to make the same overall profit whether I have a $250 deductible or a $5,000 deductible. They take in less with the HD, but they pay out less on average, and have lower admin costs with fewer small claims. If one can afford it, HD makes sense.

So setting $1M deductible for HC (for people who can really pay the $1M out-of-pocket) wouldn't 'hurt' the sysem - it would be less in but less out also.

We can use that 'grocery store insurance' analogy - imagine $0 deductible 'grocery store insurance'. You go to the store, and don't learn the costs until you get your EOB a month later. But your insurance 'pays for it', so you take what you want. But then the ins co will need to charge accordingly on average, plus admin costs. Low deductibles do nothing but raise costs (again, assuming you can handle the deductible).

-ERD50

[meierlde]

Actually the lower limits are a movement to what is the desired goal, a single payer health care system where all health care is covered. As noted this helps the majority of folks who would be close to BK with a high deductable plan. (But then a question to ask is what level of deductable do they carry on auto and home policies.) The plan is designed to benefit the greatest number, so some will naturally loose. All be it the plan does not cover the objections cited in seeking sickness which points out a lot of screening is really useless and likley harmful, just like they finally determined with PSA tests, the cure is worse than the possible disease. The book points out that full body cat scans often find things not normal, but then they have to investigate, even if the thing is giving no trouble, in terms of the precautionary principal run amok.

[mpeirce]

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Originally Posted by rbmrtn I've never been able to figure how you got a deal like that. I'm sure I would want to keep that as well. On the other side... I don't know anyone over 50 that has been able to even purchase an individual plan. I have no pre existings, don't take any meds and was rejected.

Maybe it's your state or you circle of friends, but when I FIREd a couple of years ago, me (49 at the time) and my wife (58 at the time) had no problem getting (what we considered) a reasonable priced policy in Ohio. Yes, it was a HDHP/HSA plan, but that's what we had before I retired from the mothership and it worked well for us.

[MichaelB]

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Originally Posted by travelover Puzzling. Does this plan have a low maximum payout? Gotta be something.

There is no doubt the coverage is limited in some way.

[Mulligan]

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Originally Posted by travelover Puzzling. Does this plan have a low maximum payout? Gotta be something.

No, these were all standard individual plans at the time. $5500 deductible, zero co-pay, with $7 million dollar limit on policy.

[bUU]

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Originally Posted by ERD50 What is 'excessively high'?

Like I said, there needs to be a line drawn, otherwise people will simply bypass ACA by having $1M deductibles.

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Originally Posted by ERD50 Where does the $4,375 number come from?

From the samples provided in a lot of the literature. Like I said, it's the result of a computation which is actually based on the annual out-of-pocket maximum, which is around $6,750 for an individual IIRC.

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Originally Posted by ERD50 I don't know, and don't know where to go to find out - heck, many of these provisions seem to be still TDB by HSS.

What is TDB is the educational materials. (I have some personal, second-hand knowledge about that, including how cost-cutting has contributed to delays and other compromises with regard to the quality of helping the public understand the new provisions.) The actual provisions of the law are not changing.

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Originally Posted by ERD50 I was going off general comments I've heard that these high-deductible polices are considered 'non-conforming', so please enlighten me if this is not the case.

A HDHP with a $10k deductible for an individual is indeed non-conforming. But there will be options with deductibles in the $4k-$5k range.

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Originally Posted by ERD50 Quote: If there wasn't an upper limit, insurers would essentially bypass the ACA's mandate provision entirely by setting a $1M deductible per individual. It would be like the seat belt law exempting vehicles that cost less than $1M. I don't this 'logic' holds.

What logic are you referring to? The analogy? Well if we cannot agree about something that is so close an analog (something you buy which is limited based on an outrageously high dollar amount) then I don't know if there is really any way to constructively discuss the matter.

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Originally Posted by ERD50 So setting $1M deductible for HC (for people who can really pay the $1M out-of-pocket) wouldn't 'hurt' the sysem

You mean it wouldn't hurt the insurance company. It does hurt the system.