United Health may stop offering ACA Exchange plans

[marko]

Maybe sneaky smart on their part. People who buy on exchange are heavily subsidized and can get low out of pocket costs. Sign up and get others to pay for all the differed maladies that need to be fixed.
Many people probably don't even know about off exchange insurance. These people buying these policies have less incentive to use them since they pay the big deductibles. That may suggest better profitability for insurer.


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I've said it before: Regardless of the merits of the ACA, for something that is supposed to be so vitally important to the American people, the information and roll out of this program has been (as my former boss --a master marketer--would say) "an astonishing amateur hour".

Maybe I was naive but I was expecting a lot of TV ads, maybe a "national hour on a Sunday evening" of what is/isn't in ACA and some sort of conscious raising effort. (Like we get on registering to vote)

Some sort of reminders. Some sort of "sell".

Nada.

So, even today there are stories about people being surprised by high deductibles, many people unsure of if they're even covered, and so on.

These stories, popping up every few weeks, do not help the cause of the ACA.

This sadly reminds me of the "New Coke" rollout. Unprepared, unready and badly presented.

 

[Mulligan]

I've said it before: Regardless of the merits of the ACA, for something that is supposed to be so vitally important to the American people, the information and roll out of this program has been (as my former boss --a master marketer--would say) "an astonishing amateur hour".



Maybe I was naive but I was expecting a lot of TV ads, maybe a "national hour on a Sunday evening" of what is/isn't in ACA and some sort of conscious raising effort. (Like we get on registering to vote)



Some sort of reminders. Some sort of "sell".



Nada.



So, even today there are stories about people being surprised by high deductibles, many people unsure of if they're even covered, and so on.



These stories, popping up every few weeks, do not help the cause of the ACA.



This sadly reminds me of the "New Coke" rollout. Unprepared, unready and badly presented.

And lets be honest. Most Americans are not the sharpest concerning details. Look at the confusion even here with mostly informed and intelligent people. If the assumption that healthcare is so important that this law was created, why is it turning into a potential "gotcha game", whether it being people who don't understand their policies, deductibles, in network, out of network, in network according to insurance's website, but out of network in reality because "it just changed", out of network providers working in an in network hospital, etc....
No wonder, our out of country friends on this forum "don't understand our system". Heck we don't either and we live here!


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[Ian S]

I'm considering a UHC plan on the ACA for 2016. Never thought I'd be happy to be turning 65 next August!

 

[ivinsfan]

I see part of this problem when poking thru the MNSure site. They have a here's the best possible policy for you feature. You enter your age, general health, and then they have a huge dropdown list of "health care you might be requiring in 2016. It ranges from open heart surgery to complete knee and hip replacements and everything in between. It then shows you how to "get the most" from your healthcare dollars giving you the maximum you would pay OFP on each policy. The insurance company probably views this as how to wring every penny out of your insurance company. They have to take every application for any policy that comes across their desk. It seems very unhealthy for long term stability for the insurance companies.

 

[misanman]

An analyst on NBR last night seemed to imply that UHC was only the first to bring this to light and that all the major ACA insurers were having the same issues.

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[misanman]

I should have added that the analyst said that more healthy people were needed to balance all the not so healthy people that signed on right away.

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[karen1972]

I have UHC direct in 2015, on the exchange in 2016. There are only 3 providers on the exchange here so losing them would be a huge loss. I had to buy last year outside the open window, not sure how people "gamed" the system as I had 2 qualifying life events (quit job and moved to another state) and it was very difficult for my bf to prove the life events because of the very narrow list of items they take as proof.

Even without subsidy they are still the cheapest plan out there so that is likely why they are losing money. They are also the only provider that my bf drug is Tier 2, not Tier 4...so would still be cheaper to buy off exchange for him even without subsidy.

I'm more worried loss of competition. I thought we were going to get more entries, not less.

 

[lhamo]

I think they are trying to discourage people who will actually use the insurance from signing up for it. It is a pain in the butt to have to change insurance companies, especially mid-year, but also at any time. Especially if you have ongoing medical needs. By flagging this so early, they are essentially telling people who need insurance 1) we may not keep providing this and you may have to look for another provider either mid-year 2016 or in 2017 and 2) if we do keep providing it, the cost is going to escalate dramatically. Enough signalling for many people to be driven to another alternative, even if slightly more expensive.

I predict they will have a greatly reduced enrollment in 2016, of healthier people less likely to seek reimbursement, and will become much more profitable as a result.

 

[marko]

This came across just an hour ago:

Obamacare Architect: High Deductible Plans Overdone
Obamacare architect: High-deductible plans overdone

 

[Mulligan]

A perfect example of the process being confusing is what happened today with me. My brother emailed me this morning saying his insurance is dropping out of state at end of year. He asked me which one I had so he can get it. He lives across the state. He has no clue, that you just don't buy "what I have". He has no clue about coverage areas, in network, out of network, making sure his preferred medical providers are in the plan he buys, etc... This is not going to be able to answered with an email. We are going to have to have a bit of a discussion...


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[MichaelB]

Health care insurance is the US is very complex. Each state regulates it differently, prices and costs are secret and variable, and the health care insurance industry has evolved by focusing on exclusion, so it has thousands of different groups and networks to manage. Most individuals got their coverage from employer, who dealt with all this complexity. So many are now seeing it for the first time as individuals, and conclude this complexity (and cost) is recent.

In fact, the ability to easily compare policies is new, the result of minimum coverage mandates. Same for comparing provider networks, which we can do now because insurers must enable that. Before these mandates it was much more difficult to compare policies.

Rounding back to the original topic, is this a case where UHC has too many sick people on it's policies, or could it be UHC management is having a rough time executing their business strategy in the individual market and they are throwing the blame elsewhere?

 

[Mulligan]

Health care insurance is the US is very complex. Each state regulates it differently, prices and costs are secret and variable, and the health care insurance industry has evolved by focusing on exclusion, so it has thousands of different groups and networks to manage. Most individuals got their coverage from employer, who dealt with all this complexity. So many are now seeing it for the first time as individuals, and conclude this complexity (and cost) is recent.

In fact, the ability to easily compare policies is new, the result of minimum coverage mandates. Same for comparing provider networks, which we can do now because insurers must enable that. Before these mandates it was much more difficult to compare policies.

Rounding back to the original topic, is this a case where UHC has too many sick people on it's policies, or could it be UHC management is having a rough time executing their business strategy in the individual market and they are throwing the blame elsewhere?

Well the model is odd to begin with. In a normal business if you are priced within reason and conduct a lot of sales, profitability follows. Do that with insurance and you could be setting yourself up for greater losses. Especially if people are wanting lowest possible price and maximum use of services.
My favorite example of insurance was a letter an insurance company released a few years ago from a very happy customer. She wrote the company about how pleased they were with all the coverage they provided. She said she got married and was wanting a baby so she picked their insurance because she heard good things about them. Then she said she was dropping them since they are not having any more children. But if they ever did she wanted them to know she was going to sign back up with them. You just cant make this stuff up!


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[Bamaman]

Like has previously been said, the ACA subsidized business is a small percentage of United Healthcare's business. But the real problem is that so many of these people have not been insured in the past and getting them healthier is very expensive. So many insureds came to them with prior existing untreated illnesses--many of which are very expensive to cure.

The young, healthy citizens have ignored getting healthcare because they've not used doctors and hospitals in the past. They're going to be mad next year when their income tax returns are adjusted for penalties for not having healthcare. And the healthcare premiums are relatively expensive--with so much of their premiums going to cover the deficit spending of the older, sicker insureds.

A big problem with the ACA is not the premiums. The biggest problem is that the customers cannot afford the incredibly expensive yearly deductibles.

 

[ziggy29]

A big problem with the ACA is not the premiums. The biggest problem is that the customers cannot afford the incredibly expensive yearly deductibles.

True that. To some extent the ACA tries to address this with reduced cost sharing (below 250% of FPL), but someone at (say) 270% of FPL often can't afford a $6,000+ individual deductible or $13,000 family deductible. They just don't have that kind of money, which just winds up being uncollectible bills for the provider that has to be recouped by charging more for everyone who can pay. It's a bit of a vicious circle.

 

[Mulligan]

Like has previously been said, the ACA subsidized business is a small percentage of United Healthcare's business. But the real problem is that so many of these people have not been insured in the past and getting them healthier is very expensive. So many insureds came to them with prior existing untreated illnesses--many of which are very expensive to cure.

The young, healthy citizens have ignored getting healthcare because they've not used doctors and hospitals in the past. They're going to be mad next year when their income tax returns are adjusted for penalties for not having healthcare. And the healthcare premiums are relatively expensive--with so much of their premiums going to cover the deficit spending of the older, sicker insureds.

A big problem with the ACA is not the premiums. The biggest problem is that the customers cannot afford the incredibly expensive yearly deductibles.

That may happen to unenlightened, but if God forbid, healthcare premiums become too expensive for me to pay, the government will not be confiscating my refund as I will make darn sure there will be none!


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[marko]

The young, healthy citizens have ignored getting healthcare because they've not used doctors and hospitals in the past. They're going to be mad next year when their income tax returns are adjusted for penalties for not having healthcare. And the healthcare premiums are relatively expensive--with so much of their premiums going to cover the deficit spending of the older, sicker insureds.

Well you've kind of hit some of the main issues:
1) Young and healthy aren't signing up
2) Penalties are a heck of a lot cheaper than.....
3) expensive premiums;
4) Goto #2

 

[youbet]

The young, healthy citizens have ignored getting healthcare because they've not used doctors and hospitals in the past.

I think the reason that young, healthy citizens are infrequently signing up is that there is a feeling that you're wasting your money on ACA insurance if you don't know you'll use it, and use it a lot. Folks just don't want to pay premiums for health care coverage that will exceed what they consume. Everyone wants to pay in a little and collect a lot.

It seems like the often spoken of fear of bankruptcy due to an expensive health issue isn't all that prevalent. Folks want to see that their benefit will be greater than their cost. Insurance can't survive on that basis. Most folks need to pay in more than they consume in order to cover the folks that need to consume a lot.

 

[Mulligan]

I think the reason that young, healthy citizens are infrequently signing up is that there is a feeling that you're wasting your money on ACA insurance if you don't know you'll use it, and use it a lot. Folks just don't want to pay premiums for health care coverage that will exceed what they consume. Everyone wants to pay in a little and collect a lot.

It seems like the often spoken of fear of bankruptcy due to an expensive health issue isn't all that prevalent. Folks want to see that their benefit will be greater than their cost. Insurance can't survive on that basis. Most folks need to pay in more than they consume in order to cover the folks that need to consume a lot.

Probably because many who forego insurance have no fear of bankruptcy as they have little to be taken away from anyways. Although I am not a rich person asset wise, I dont want to lose what I have. So I do the obvious stuff including plenty of auto liability. But there will eventually be a number on any insurance where I would say....Im taking my chances.
To leave healthcare out of it take homeowners insurance. I pay about $1000 on a $170k or so house. Don't like writing the check but I will dutifully. Now raise homeowners insurance to $15k, Im not paying and taking my chances.


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[rdy2go]

I can understand why a young/immortal person would go barefoot when a policy could cost them thousands of dollars a year and their chances of needing it are minimal. I had no medical issues until I was fifty-eight myself. But, the system needs those healthy people in there paying premiums to make it work for the unhealthy or older population. It is called "spread of risk" in the insurance business.

 

[MichaelB]

The data does not show that young people are not signing up. From this KFF brief, the biggest factors for not being insured are the high cost of insurance or insufficient income. The two reasons "Don't need insurance" and "prefer to pay penalty" represent 9% of all uninsured, while "too costly" alone is 48%.

The biggest problem with the ACA is the fact that healthcare is very expensive in the US, but this high cost is only really visible on individual ACA policies. Medicare and employer policies (and other sources) cost just as much, but those costs are not put on public display for all to see and discuss.

 

[mpeirce]

This came across just an hour ago:

Obamacare Architect: High Deductible Plans Overdone
Obamacare architect: High-deductible plans overdone

from the article (quoting Ezekiel Emanuel):

He did acknowledge: "We've overplayed the high-deductible plans. People are feeling this is less and less insurance. And just more and more, 'I'm paying out of my pocket.'"

He's conflating "health insurance" with "health care". I see it here a lot too.

Health care would be something like an HMO that pays for all your health spending.

Buying health insurance would protect you against big things like a heart attack or coming down with some disease and the care resulting from that.

What you get and what the costs are for these two things are quite different.

Unfortunately, we've mashed this up in this country and that doesn't help the discussion one bit.

You end up with HDHP/HSA type plans that are the closed to real insurance, but they get larded up with freebies like annual physicals that drive the cost up beyond what true insurance would cost and a young healthy person might be willing to pay for.

 

[travelover]

...........The biggest problem with the ACA is the fact that healthcare is very expensive in the US, but this high cost is only really visible on individual ACA policies. Medicare and employer policies (and other sources) cost just as much, but those costs are not put on public display for all to see and discuss.

Exactly. Having employer paid insurance for so long allowed the costs to climb with little notice from the insured. We were trading raises for higher health insurance premiums, but it wasn't obvious. In the short term, I can see anger directed at the ACA as being the "cause" of high insurance premiums but ultimately when the finger pointing is played out, provider costs will have to be addressed.

 

[ziggy29]

To leave healthcare out of it take homeowners insurance. I pay about $1000 on a $170k or so house. Don't like writing the check but I will dutifully. Now raise homeowners insurance to $15k, Im not paying and taking my chances.

Of course, apart from the liability component your potential for loss in homeowners insurance is known and fixed (the value or replacement cost of the structure and possessions in it). If you are worth $5-10M or more it's easier to "self insure" in case the house burns down. With medical bills, there is no theoretical limit. It can get into 6 or 7 figures. So it's a lot harder to "self insure" for it.

 

[Mulligan]

Of course, apart from the liability component your potential for loss in homeowners insurance is known and fixed (the value or replacement cost of the structure and possessions in it). If you are worth $5-10M or more it's easier to "self insure" in case the house burns down. With medical bills, there is no theoretical limit. It can get into 6 or 7 figures. So it's a lot harder to "self insure" for it.

I agree... But, it appears the majority of people in US literally live pay check to pay check. They don't even think about self insuring risk, they just think they can barely afford the insurance they cant afford to use. .....So they just drop it.
I like a previous poster writing said, people are "conflating healthcare with health insurance". And that is true... We have health insurance. Insurance is based on rating and usage. The more you use the higher your premium should be. Just ask any one who seems to have trouble burning their house down often or having care wrecks frequently. They will pay out the wazoo or be uninsurable.
In my mind we should have healthcare, and I am even willing to pay more to have that....But we don't. Which means my premium should be preferred customer rates because I don't use it or make any claims.


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[Texas Proud]

There is a problem with the cost of healthcare that is not being addressed... the high deductibles are one of them...

I have mentioned it before, but there is (was?) a group called RAM (IIRC) on 60 minutes... this is a group of doctors who go around the country giving out free healthcare... one of the people shown that had a number of problems (I also think one of his kids) actually had insurance.... but still could not afford to go to the doc...

Yes, if you are poor, just having access to insurance is not enough...