Peek at Florida Exchange Pricing

[Mulligan]

This may be a stupid question, but do ALL insurance companies HAVE TO participate in the exchanges, or can they opt out? For example I didn't see UHC in the list of companies in the list.
TJ

No they do not have to, and some are sitting out at least the first year. The question I can't resolve is, can they legally offer a product that does not conform to the ACA. If they did, say a 10k deductible and it was cheap enough, I would consider buying that and paying the mandatory fine. In other words, companies can sell their health insurance "off exchange", but can they sell anything off exchange and not compliant? I imagine the answer is no though.

 

[MichaelB]

This may be a stupid question, but do ALL insurance companies HAVE TO participate in the exchanges, or can they opt out? For example I didn't see UHC in the list of companies in the list.
TJ

Insurance companies are not required to participate in the exchanges and are free to offer policies directly to the public or through distributors, as long as they comply with PPACA requirements.

 

[Mulligan]

Insurance companies are not required to participate in the exchanges and are free to offer policies directly to the public or through distributors, as long as they comply with PPACA requirements.

So there will be no possibility for an off exchange non compliant policy where you can pay the fine, correct?

 

[FIRE'd@51]

Perhaps I'm being overly cynical, but I can imagine the following scenario playing out.

Since the exchange plans are subsidized, it seems to me that the insuree will look at them the same way that an investor looks at municipal bonds versus taxable bonds. That is, the insuree should only care about the subsidized price, all else equal, as an investor, all else equal, only cares about the after-tax return. This gives the insurance companies the ability to raise the premiums to the point at which, with the subsidy, the insuree pays a little less than he would if he bought the same policy outside of an exchange. Hence the insurance companies can be more aggressive the first year as a way to "drum up" business with the hope that more and more people will move to the exchange plans, and more businesses will stop providing insurance to their employees and move them to the exchanges. I suspect the end result will be that the policies (on average) with the subsidy will equilibrate to the same price as an equivalent non-exchange policy today. This means that the pre-subsidy price will likely be higher, resulting in a wealth transfer from those who don't get a subsidy and the taxpayer to those who do and the insurance companies.

 

[teejayevans]

I suspect the end result will be that the policies (on average) with the subsidy will equilibrate to the same price as an equivalent non-exchange policy today. This means that the pre-subsidy price will likely be higher, resulting in a wealth transfer from those who don't get a subsidy and the taxpayer to those who do and the insurance companies.

Unless exchanges get different customers (higher risk) then non-exchange customers. The companies have to price exchange policies based on no prescreening correct?, but they will be able to prescreen non-exchange customers, so if a 25 yr old can get a policy outside the exchange for $95/mon, it still may be cheaper than a exchange policy ($400- $200 subsidy, for a total of $200).
TJ

 

[ziggy29]

The companies have to price exchange policies based on no prescreening correct?, but they will be able to prescreen non-exchange customers, so if a 25 yr old can get a policy outside the exchange for $95/mon, it still may be cheaper than a exchange policy ($400- $200 subsidy, for a total of $200).

I believe they can't prescreen or underwrite for non-exchange policies, either. Which means that someone paying $95 per month at age 25 couldn't be forced to pay more than three times that amount, or $285 per month, at age 64 (since age can only be used insofar as the oldest can't pay more than three times as much as the young). With guaranteed issue. And that won't happen.

 

[mpeirce]

The question I can't resolve is, can they legally offer a product that does not conform to the ACA. If they did, say a 10k deductible and it was cheap enough, I would consider buying that and paying the mandatory fine. In other words, companies can sell their health insurance "off exchange", but can they sell anything off exchange and not compliant? I imagine the answer is no though.

Frankly that's been my thought too. I'd much rather keep my very high deductible plan with the low premium and pay the penalty.

 

[ERhoosier]

So there will be no possibility for an off exchange non compliant policy where you can pay the fine, correct?

I know of no written provision in ACA specifically outlawing non-compliant plans, although buying one would apparently not excuse someone from having to pay the fine. So whether or not companies might offer such plans in '14 & beyond is open to question.

 

[samclem]

I suspect the end result will be that the policies (on average) with the subsidy will equilibrate to the same price as an equivalent non-exchange policy today. This means that the pre-subsidy price will likely be higher, resulting in a wealth transfer from those who don't get a subsidy and the taxpayer to those who do and the insurance companies.

That seems very logical--every player is pursuing their own self-interests (except, maybe, the taxpayers, who don't have a clear agent in all of this as you've laid it out).

It's the same mechanism which has caused college costs to increase much more rapidly than the CPI (or even medical costs)--increased demand/reduced pressure on prices due to easy money being pumped into the system.

But--if insurers can offer "wildcat" plans outside the exchanges directly to consumers, that might constitute a mechanism for price competition. If the fines remain modest, it might be economical for those who are not receiving subsidies to jump out of the whole process, pay the fines, and get one of these non-PPACA-compliant policies (that they deem to best meet their needs). If there's enough of this going on, there would be pricing pressure to reduce the cost of the plans offered on the exchanges.

 

[MichaelB]

Insurance companies cannot offer any new plans that are not compliant with PPACA regulations regarding essential minimum health benefits and no underwriting. They can continue with their current grandfathered plans, subject to some PPACA conditions, but only to policyholders that were enrolled in 2010.

Insurers are not required to use the exchanges. They're free to interact directly with consumers or use other interfaces. Consumers can only get premium assistance or subsidy on an exchange or approved platform.

 

[mpeirce]

> Insurance companies cannot offer any new plans that are not compliant with PPACA regulations regarding essential minimum health benefits

And some people wonder why so many folks are exasperated with the PPACA...

 

[ShokWaveRider]

[Mod Edit]

If one is Poor, (this is the noun) one will be excluded from getting insurance unless they are above 137% of the poverty line.

So, for us lucky folk who can control our taxable income, with some planning, can get insurance from the Federal Exchange for ~$60pm (Silver) if their AGI is kept right at $21,500?

This may take a year to perfect but surely it can be optimized for each of our personal situations. Who here gets insurance for ~$60pm that is not Military or covered by company plans? So this ACA is a good deal right?

[Mod Edit]

Does anyone have a good breakdown of what ALL the metal plans will offer, deductibles, Copays, OOP costs etc.?

 

[Refresher]

[Mod Edit]

If one is Poor, (this is the noun) one will be excluded from getting insurance unless they are above 137% of the poverty line.

Is it 137% or 100%?
Last info I received 138% or under is Medicaid eligible if a the state participates.
Those above 100% will have an opportunity to buy into the exchange.
Those under 100% cannot buy into the exchange.

 

[Mulligan]

[Mod Edit]

If one is Poor, (this is the noun) one will be excluded from getting insurance unless they are above 137% of the poverty line.

So, for us lucky folk who can control our taxable income, with some planning, can get insurance from the Federal Exchange for ~$60pm (Silver) if their AGI is kept right at $21,500?

This may take a year to perfect but surely it can be optimized for each of our personal situations. Who here gets insurance for ~$60pm that is not Military or covered by company plans? So this ACA is a good deal right?

[Mod Edit]

Does anyone have a good breakdown of what ALL the metal plans will offer, deductibles, Copays, OOP costs etc.?

Shok, if you go to the Covered California ..... thread in this health section,go to page 2 and look in Explanade's post. Hit his consumer guide link and their is a detailed explanations of California's. Page 5 has a nice comparison chart of coverages for the different metal plans.
I did not know this but if one's income is such that insurance premiums are above 8% of income, they are exempted form coverage. I could see at some point many people making too much money for subsidies, but not enough to stay under 8% threshold.

 

[Katsmeow]

> Insurance companies cannot offer any new plans that are not compliant with PPACA regulations regarding essential minimum health benefits

And some people wonder why so many folks are exasperated with the PPACA...

And, yet, it is easy to see why the PPACA has that requirement.

Without that requirement, insurers could make a mockery of the requirement to insure people without underwriting. That is, the insurers could simply provide that all of their policies wouldn't include hospital coverage or would have a maximum payout of $2500 or would require a deductible of $50,000, etc. Without a listing of minimum benefits insurers could make the policies so narrow and with so little coverage available that the policies become all but meaningless.

The other issue is the deductible issue. I am sympathetic to the argument in favor of high deductible. And, for most of the people on this forum a $10,000 deductible would be fine since most here could meet that deductible and it wouldn't be such a hardship that they wouldn't get care.

On the other hand, I could see someone with low income choosing a really high deductible plan because he or she was "healthy" because the plan had much lower premiums. Then, that healthy person has an accident or gets sick, needs care and is utterly unable to pay the deductible which either throws the cost back on the hospitals if the person goes to the ER or results in the person not being able to afford to get needed non-ER care because the person can't afford to meet the deductible.

I'm not saying all the lists of minimum coverage requirements are the ones I would choose, but I do see why the requirement is there.

 

[FinanceGeek]

Insurers are not required to use the exchanges. They're free to interact directly with consumers or use other interfaces. Consumers can only get premium assistance or subsidy on an exchange or approved platform.

Since both on-exchange and off-exchange policies have to meet the same set of requirements, why would insurers offer off-exchange policies at all? It seems like policies sold "on-exchange" would be more attractive to customers because they may be eligible to obtain subsidies...

 

[ziggy29]

Since both on-exchange and off-exchange policies have to meet the same set of requirements, why would insurers offer off-exchange policies at all? It seems like policies sold "on-exchange" would be more attractive to customers because they may be eligible to obtain subsidies...

I guess they might be offering plans to folks who aren't eligible for a subsidy, since they can offer direct and (presumably) not have to pay a "commission" for policies sold on the exchanges (assuming they are allowed to offer a lower price on the same product outside of the exchanges).

 

[teejayevans]

I guess they might be offering plans to folks who aren't eligible for a subsidy, since they can offer direct and (presumably) not have to pay a "commission" for policies sold on the exchanges (assuming they are allowed to offer a lower price on the same product outside of the exchanges).

But if it's not compliant, then you'll have to pay the tax penalty for not having insurance, unless it's grandfathered in, I think all insurance will need to be compliant, unless premium+tax penalty<ACA premium
TJ

 

[MichaelB]

I guess they might be offering plans to folks who aren't eligible for a subsidy, since they can offer direct and (presumably) not have to pay a "commission" for policies sold on the exchanges (assuming they are allowed to offer a lower price on the same product outside of the exchanges).

That would be my guess as well. All policies open for enrollment must meet PPACA standards (as of 1/1/14), and a policy sold directly by the insurer doesn't pay commission to anyone.

 

[Katsmeow]

I guess they might be offering plans to folks who aren't eligible for a subsidy, since they can offer direct and (presumably) not have to pay a "commission" for policies sold on the exchanges (assuming they are allowed to offer a lower price on the same product outside of the exchanges).

I wonder if the off exchange policies might have different (better) networks than the exchange policies. I mean logically they shouldn't but let's say I was looking for a policy and was eligible for a subsidy, but all the exchange policies had very limited networks and hospitals I didn't like. And, let's assume that off-exchange policies had the same coverage but had much broader networks and more and better hospitals. I could see that being a tough choice to make which way to go.

 

[samclem]

I wonder if the off exchange policies might have different (better) networks than the exchange policies. I mean logically they shouldn't but let's say I was looking for a policy and was eligible for a subsidy, but all the exchange policies had very limited networks and hospitals I didn't like. And, let's assume that off-exchange policies had the same coverage but had much broader networks and more and better hospitals. I could see that being a tough choice to make which way to go.

Or, even more likely, what if you didn't qualify for the subsidy (you make too much money). In that case, there's no firm advantage to going through the exchange for you as a customer. If this "direct to the customer" plan offers more providers/better access, etc, you might be willing to pay more for it.
The PPACA requires that the non-grandfathered "qualified plans" (either on the exchanges or "direct to customers") all cover theprescribed "essential Health Benefits," but that's not the same as saying you can get in to see a provider in a timely manner.

 

[Kimo]

I can't seem to get an answer on what I consider an easy question.......do short term, long term, dividends, investment interest etc; in other words, ant investment income count towards the dollar amount the Federal Government is going to consider for tax breaks or is it strictly 1099's. W2's etc?
Thanks so much.
Kimo

 

[jflynn4]

I can't seem to get an answer on what I consider an easy question.......do short term, long term, dividends, investment interest etc; in other words, ant investment income count towards the dollar amount the Federal Government is going to consider for tax breaks or is it strictly 1099's. W2's etc?
Thanks so much.
Kimo

"ALL" income that is reported on your 1040 is included in the calculation. This is something I researched early on as it will require some additional management of taxable versus non taxable sources.

 

[Htown Harry]

I wonder if the off exchange policies might have different (better) networks than the exchange policies. I mean logically they shouldn't but let's say I was looking for a policy and was eligible for a subsidy, but all the exchange policies had very limited networks and hospitals I didn't like. And, let's assume that off-exchange policies had the same coverage but had much broader networks and more and better hospitals. I could see that being a tough choice to make which way to go.

I've seen some informed speculation that limited networks for exchange policies will indeed be an issue in some states.

For all the news and commentary being generated regarding individual policies, it's important to remember that the large majority of people will still be covered by employer or other group plans, under already-established provider networks. There is no doubt quite a bit of [-]arm-wrestling[/-] strategic thinking going on between providers and insurers on whether the new, larger cohort of individual policy holders should be added into the existing networks offered to Megacorps.

From the providers' perspective, services to the pool of individuals with exchange policies is likely to have a very different credit profile.
Hospitals May Absorb Risk of Insurers

 

[samclem]

"ALL" income that is reported on your 1040 is included in the calculation. This is something I researched early on as it will require some additional management of taxable versus non taxable sources.

Right. Especially if you are not on a group plan and near one of the sharp cutoffs:
133% of Federal Poverty Level (FPL): Top of Medicaid Eligibility/beginning of Eligibility for Exchange Subsidies (use 100% of FPL if your state isn't going along with the Medicaid expansion*)

400% of (FPL): Top of eligibility for subsidies.

Earning just $1 over either of these limits can change one's situation or costs a lot.

People close to the line may find some advantages in "bunching" their income so that they at least get into the preferred "bucket" every other year. Managing deductions, delaying/accelerating sales of appreciated equities, working any extra hours a few weeks earlier or later to get the income into the proper year, etc. Tracking one's income throughout the year will become more important for many of us. Complexities/sharp cutoffs always encourage fraud, as well.

* Thanks to MichaelB for the reminder on 100% vs 133%