Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
PPACA rates in California come in less than expected
Old 05-28-2013, 02:26 PM   #1
Recycles dryer sheets
shotgunner's Avatar
 
Join Date: Jun 2008
Posts: 449
PPACA rates in California come in less than expected

MSN reports today that the cost of a Silver plan sold in the California health exchange have come in lower than estimated.

Obamacare prices roll in lower than forecast- MSN Money
__________________

__________________
Never surrender what you really want for what you want right now.
shotgunner is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 05-28-2013, 03:04 PM   #2
Thinks s/he gets paid by the post
bUU's Avatar
 
Join Date: Dec 2012
Location: Georgia
Posts: 1,713
I wonder if this news will garner more, less, or the same amount of attention as the speculation that PPACA was going to cause rates to skyrocket.
__________________

__________________
bUU is offline   Reply With Quote
Old 05-28-2013, 03:26 PM   #3
Recycles dryer sheets
 
Join Date: May 2013
Posts: 61
Rates went down in MA and are lower than anticipated in CA.

This is getting attention in the political analyst / opinionator world (Wonkblog, Kevin Drum).

PPACA is the only reason I am seriously considering ER at 55. Without it, we would be stuck back in the MN High Risk Pool. We were grateful it was there, but it would push ER out a few years.
__________________
footenote is offline   Reply With Quote
Old 05-28-2013, 03:37 PM   #4
Thinks s/he gets paid by the post
Live And Learn's Avatar
 
Join Date: Feb 2012
Location: Tampa Bay Area
Posts: 1,555
Maybe I'm reading this wrong, but it doesn't look "cheaper" than any of the calculators have proposed. Perhaps its lower than something or another that was applicable to CA only.

According to the Kaiser site an unsubsized 40 year old non smoker should pay $3,857 per year ($321 / month). That amount is exactly the average on page 6 of the booklet linked in the report.

http://coveredca.com/news/PDFs/CC_He...ns_Booklet.pdf
__________________
"For the time being no discipline brings joy, but seems grievous and painful; but afterwards it yields a peaceable fruit of righteousness to those who have been trained by it." ~
Hebrews 12:11

ER'd in June 2015 at age 52. Initial WR 3%. 50/40/10 (Equity/Bond/Short Term) AA.
Live And Learn is offline   Reply With Quote
Old 05-28-2013, 03:44 PM   #5
Moderator
ziggy29's Avatar
 
Join Date: Oct 2005
Location: Texas
Posts: 15,492
Quote:
Originally Posted by Live And Learn View Post
Maybe I'm reading this wrong, but it doesn't look "cheaper" than any of the calculators have proposed. Perhaps its lower than something or another that was applicable to CA only.

According to the Kaiser site an unsubsized 40 year old non smoker should pay $3,857 per year ($321 / month). That amount is exactly the average on page 6 of the booklet linked in the report.
Well, "lower than expected" doesn't necessarily mean lower than it is now if the conventional wisdom was that premiums would rise considerably.

It's like Congressional budget math: If a program originally expecting a 7% budget increase only received a 4% increase, it's called a "budget cut".
__________________
"Hey, for every ten dollars, that's another hour that I have to be in the work place. That's an hour of my life. And my life is a very finite thing. I have only 'x' number of hours left before I'm dead. So how do I want to use these hours of my life? Do I want to use them just spending it on more crap and more stuff, or do I want to start getting a handle on it and using my life more intelligently?" -- Joe Dominguez (1938 - 1997)
ziggy29 is offline   Reply With Quote
Old 05-28-2013, 03:49 PM   #6
Moderator
 
Join Date: Oct 2007
Posts: 4,929
Quote:
Originally Posted by bUU View Post
I wonder if this news will garner more, less, or the same amount of attention as the speculation that PPACA was going to cause rates to skyrocket.
Less, or, if mentioned at all, are evidence of the conspiracy to rope us all into ObamaCare before going after us with a huge rate hike the next year. Never mind that California has a review process for health insurance policy changes and rate hikes that such a stunt wouldn't pass. Mediots can't be troubled by such details.

For what it's worth, the numbers came out pretty much what I was expecting. DD has a huge percentage rate hike that works out to $60/month more, from the 3::1 cap on age related rate variation. The cost for DW and I goes down a bit percentage-wise, or roughly $100/month for us, so in total we see a small reduction for our Bronze-class plans (moderately high deductible/HSA eligible plans).
__________________
M Paquette is offline   Reply With Quote
Old 05-28-2013, 03:56 PM   #7
Thinks s/he gets paid by the post
bUU's Avatar
 
Join Date: Dec 2012
Location: Georgia
Posts: 1,713
Quote:
Originally Posted by ziggy29 View Post
It's like Congressional budget math
I disagree. Rates (in general) weren't expected to be "lower than [they are] now" because that wasn't the objective of the ACA.
__________________
bUU is offline   Reply With Quote
Old 05-28-2013, 03:59 PM   #8
Moderator
ziggy29's Avatar
 
Join Date: Oct 2005
Location: Texas
Posts: 15,492
Quote:
Originally Posted by bUU View Post
I disagree. Rates (in general) weren't expected to be "lower than [they are] now" because that wasn't the objective of the ACA.
It sounds like you don't *disagree*, you misunderstand what I said.

I said that many observers EXPECTED rates to be considerably higher in 2014 because of PPACA, but they seem "less than expected" because the rates didn't rise to the level many expected.

I thought I was very clear on that point, but I could be wrong.

Was this not clear?

Quote:
Well, "lower than expected" doesn't necessarily mean lower than it is now if the conventional wisdom was that premiums would rise considerably.
__________________
"Hey, for every ten dollars, that's another hour that I have to be in the work place. That's an hour of my life. And my life is a very finite thing. I have only 'x' number of hours left before I'm dead. So how do I want to use these hours of my life? Do I want to use them just spending it on more crap and more stuff, or do I want to start getting a handle on it and using my life more intelligently?" -- Joe Dominguez (1938 - 1997)
ziggy29 is offline   Reply With Quote
Old 05-28-2013, 04:04 PM   #9
Thinks s/he gets paid by the post
bUU's Avatar
 
Join Date: Dec 2012
Location: Georgia
Posts: 1,713
Quote:
Originally Posted by ziggy29 View Post
It sounds like you don't *disagree*, you misunderstand what I said.
Could be!

Quote:
Originally Posted by ziggy29 View Post
I said that many observers EXPECTED rates to be considerably higher in 2014 because of PPACA, but they seem "less than expected" because the rates didn't rise to the level many expected.
Okay, I guess it was the comment about it being Congressional math that threw me.
__________________
bUU is offline   Reply With Quote
Old 05-28-2013, 04:15 PM   #10
Moderator
ziggy29's Avatar
 
Join Date: Oct 2005
Location: Texas
Posts: 15,492
Quote:
Originally Posted by bUU View Post
Okay, I guess it was the comment about it being Congressional math that threw me.
My point was that in Congressional budgeting, reducing the originally planned increase is seen as a "cut", much as these rates rising "less than expected" is seen as somehow reducing the cost of health insurance. Because the expectation was for rates to rise even more, seeing published rates less than expected *feels* like a reduction to many in some sense.
__________________
"Hey, for every ten dollars, that's another hour that I have to be in the work place. That's an hour of my life. And my life is a very finite thing. I have only 'x' number of hours left before I'm dead. So how do I want to use these hours of my life? Do I want to use them just spending it on more crap and more stuff, or do I want to start getting a handle on it and using my life more intelligently?" -- Joe Dominguez (1938 - 1997)
ziggy29 is offline   Reply With Quote
Old 05-29-2013, 07:06 AM   #11
Recycles dryer sheets
 
Join Date: May 2013
Posts: 61
Quote:
Originally Posted by Live And Learn View Post
Maybe I'm reading this wrong, but it doesn't look "cheaper" than any of the calculators have proposed. Perhaps its lower than something or another that was applicable to CA only.

According to the Kaiser site an unsubsized 40 year old non smoker should pay $3,857 per year ($321 / month). That amount is exactly the average on page 6 of the booklet linked in the report.

http://coveredca.com/news/PDFs/CC_He...ns_Booklet.pdf
The Kaiser calculator is for illustration purposes only. It is meant to show the size of the subsidy, not the coverage to-the-dollar. Actual rates will vary by region and as insurers get experience with uptake and usage.

"Cheaper" is lower than analysts forecasted California's rates would be.
__________________
footenote is offline   Reply With Quote
Old 05-29-2013, 05:29 PM   #12
Thinks s/he gets paid by the post
Big_Hitter's Avatar
 
Join Date: May 2013
Location: In the fairway
Posts: 3,328
OP - many thanks for posting this!
__________________
Swing hard, look up
Big_Hitter is offline   Reply With Quote
Old 05-30-2013, 07:28 AM   #13
Dryer sheet aficionado
 
Join Date: Oct 2007
Posts: 37
Seems there are always two sides to a coin.

Rate Shock: In California, Obamacare to Increase Individual Insurance Premiums by 64-146% - Forbes
__________________
joe8012 is offline   Reply With Quote
Old 05-30-2013, 11:00 AM   #14
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Mulligan's Avatar
 
Join Date: May 2009
Posts: 6,708
Quote:
Originally Posted by joe8012 View Post
I read this in Bogleheads and extracted it below. I had read about this a long time ago and it really hasn't been mentioned too much. Is it possible rates were set "relatively low" because of this temporary reinsurance money from the federal government?

It is impossible to be impressed with Obamacare yet. Obamacare has programs such as Transitional Reinsurance Program and Risk Corridors that provide incentive for insurance companies to offer low premiums. These two programs are not long term answers and only last till 2016. We will know whether Obamacare works when these programs end.

In brief, the Transitional Reinsurance Program supports reinsurance payments to individual market issuers that cover individuals with high medical costs. Risk corridors protects against uncertainty in rate-setting in the first several years of the Exchanges by creating a mechanism for sharing risk between the federal government and qualified health plan issuers.
__________________
Mulligan is offline   Reply With Quote
Old 05-30-2013, 11:07 AM   #15
Thinks s/he gets paid by the post
bUU's Avatar
 
Join Date: Dec 2012
Location: Georgia
Posts: 1,713
Quote:
Originally Posted by Mulligan View Post
We will know whether Obamacare works when these programs end.
We will know whether ACA works when the first person stops short-changing their health because a preexisting condition that previously precluded affordable healthcare.
__________________
bUU is offline   Reply With Quote
Old 05-30-2013, 11:12 AM   #16
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Mulligan's Avatar
 
Join Date: May 2009
Posts: 6,708
Quote:
Originally Posted by bUU View Post
We will know whether ACA works when the first person stops short-changing their health because a preexisting condition that previously precluded affordable healthcare.
I should have deleted that first sentence out, but I just extracted the whole paragraph. Once again I was only referring to the cost factor in relations to the question on premium concerns, not the value or worth of the Act itself. But hey, thanks for the comment anyways!
__________________
Mulligan is offline   Reply With Quote
Old 05-30-2013, 12:07 PM   #17
Thinks s/he gets paid by the post
 
Join Date: Feb 2011
Posts: 1,629
Agree 100% that individuals with pre-existing conditions should benefit under ACA, but some will claim ACA DOESN'T 'work' because (according to nonpartisan GAO analysis) some employers are likely to DROP current HI coverage for net loss of HI for 2-6 million employees AND retirees.
U.S. GAO - Patient Protection and Affordable Care Act: Estimates of the Effect on the Prevalence of Employer-Sponsored Health Coverage

But this thread is about individual HI costs under ACA, not who eventually wins or loses under its provisions.

Agree that the preliminary rate news so far from CA & other few states is positive, but still no reliable rate info for most states. I'm a few yrs from Medicare so I sure hope final rates for my state are as 'reasonable' as CA.
__________________
ERhoosier is offline   Reply With Quote
Old 05-30-2013, 12:35 PM   #18
Recycles dryer sheets
 
Join Date: Aug 2010
Posts: 321
I entered the below criteria in Covered California Calculator:

Number of People in the household: 4
Annual household income: 72,000
Age of first adult: 58
Age of Spouse: 52
Number of children under age 21: 2

I got $570 for monthly silver plan premium.

If I entered 2 people in household, no children, I got $1,328.
I tried adding one child or 2 either under 21 or above, the result is all the same: $570.

Looks like having child(ren) in ACA would produce lower monthly premium, than 2 adults.
__________________
fh2000 is offline   Reply With Quote
Old 05-30-2013, 12:54 PM   #19
Thinks s/he gets paid by the post
Big_Hitter's Avatar
 
Join Date: May 2013
Location: In the fairway
Posts: 3,328
Quote:
Originally Posted by fh2000 View Post
I entered the below criteria in Covered California Calculator:

Number of People in the household: 4
Annual household income: 72,000
Age of first adult: 58
Age of Spouse: 52
Number of children under age 21: 2

I got $570 for monthly silver plan premium.

If I entered 2 people in household, no children, I got $1,328.
I tried adding one child or 2 either under 21 or above, the result is all the same: $570.

Looks like having child(ren) in ACA would produce lower monthly premium, than 2 adults.
the number in household affects the FPL threshold which affects the premium tax credit
__________________
Swing hard, look up
Big_Hitter is offline   Reply With Quote
Old 05-30-2013, 01:11 PM   #20
Moderator
MichaelB's Avatar
 
Join Date: Jan 2008
Location: On the road again
Posts: 21,565
Quote:
Originally Posted by Mulligan View Post
I read this in Bogleheads and extracted it below. I had read about this a long time ago and it really hasn't been mentioned too much. Is it possible rates were set "relatively low" because of this temporary reinsurance money from the federal government?

It is impossible to be impressed with Obamacare yet. Obamacare has programs such as Transitional Reinsurance Program and Risk Corridors that provide incentive for insurance companies to offer low premiums. These two programs are not long term answers and only last till 2016. We will know whether Obamacare works when these programs end.

In brief, the Transitional Reinsurance Program supports reinsurance payments to individual market issuers that cover individuals with high medical costs. Risk corridors protects against uncertainty in rate-setting in the first several years of the Exchanges by creating a mechanism for sharing risk between the federal government and qualified health plan issuers.
The transitional reinsurance should have a modest, positive impact, but probably does less to lower rates and more to help an insurer enter a market while avoiding an extremely risky outcome.

What the program does is charge all the insurers a fee which is then used to compensate any insurers that suffers excessive payouts due to adverse selection, determined when their insured base has a risk profile that is substantially worse than the average of the region.

Anyone interested in more detail can read good summaries by Health reform GPS here Final Rule: Notice of Benefit and Payment Parameters for 2014 Health Reform GPS: Navigating the Implementation Process and here Interim Final Rule: Alternative Approaches to Cost-Sharing Reduction Payment and Risk Corridor Calculations Health Reform GPS: Navigating the Implementation Process
__________________

__________________
MichaelB is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


 

 
All times are GMT -6. The time now is 03:56 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2016, vBulletin Solutions, Inc.