Unsubsidized Young Pick ObamaCare Catastrophic Plans

[FIRE'd@51]

This may be a serious flaw in the design of the ACA. Evidently those with catastrophic coverage, whether purchased on or off the exchange, are in a separate risk pool from those in the bronze, silver, gold, and platinum plans. The existence of two distinct risk pools effectively introduces adverse selection into the ACA.

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[pb4uski]

I suspect it is much ado about not much.

It was apparent from the beginning that those who are healthy, not eligible for subsidies and could buy catastrophic coverage would likely do so since the benefits are only slightly worse than a bronze plan but premiums are much lower.

In my state, for a single, the cost of a catastrophic plan is about the same as the cost of a subsidized bronze plan for someone with a MAGI of over $35k a year, so singles under 30 who are healthy and make over $35k a year would likely favor the cat plans. that said, there are loads of healthy people under 30 who make less than $35k a year and will prefer the bronze level plan with subsidies since they will end up with better coverage for less premium.

I suspect that most people under 30 who make over $35k a year probably are young professionals whose employers offer health insurance.

 

[ERhoosier]

I suspect it is much ado about not much.

It was apparent from the beginning that those who are healthy, not eligible for subsidies and could buy catastrophic coverage would likely do so since the benefits are only slightly worse than a bronze plan but premiums are much lower.

From what I understand this is a REAL issue since ACA needs many,many more of these 'young invincibles' to join in to support long-term solvency of the program. I suspect eventually all will be folded in to the same risk pool.

FWIW- In many regions, unsubsidized Bronze premiums are only slightly higher than catastrophic plans.

 

[pb4uski]

The article indicated 26% lower IIRC. In my state catastrophic premiums are 35% lower than the lowest cost bronze plan. Though I understand in some states the difference is smaller.

 

[Mulligan]

The article indicated 26% lower IIRC. In my state catastrophic premiums are 35% lower than the lowest cost bronze plan. Though I understand in some states the difference is smaller.

I read it too. It got me interested as technically I will qualify for a catastrophic plan if my underwritten plan gets cancelled this year. I will take full advantage of this and take the catastrophic if it is financially beneficial. However, I am still unsure as I checked on ehealthinsurance, and could not find it available for me. It was only under the 30 year old section, and of course I am not that age, so I do not know how this prorates out to a person my age.


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[MooreBonds]

However, I am still unsure as I checked on ehealthinsurance, and could not find it available for me. It was only under the 30 year old section, and of course I am not that age, so I do not know how this prorates out to a person my age.

While it's not a perfect ratio, try comparing the Catastrophic quote on a 30-year old to the Bronze/Silver plans for a 30-year old. Then look at your age bracket Bronze/Silver plans, and then apply the similar ratio. Again, not perfect...but should give you at least some idea on how they might compare. For older brackets, the Catastrophic plans will probably be slightly closer in price to the Bronze compared to a 30-year old, since the older you are, the more likely you'll need healthcare.

 

[Mulligan]

While it's not a perfect ratio, try comparing the Catastrophic quote on a 30-year old to the Bronze/Silver plans for a 30-year old. Then look at your age bracket Bronze/Silver plans, and then apply the similar ratio. Again, not perfect...but should give you at least some idea on how they might compare. For older brackets, the Catastrophic plans will probably be slightly closer in price to the Bronze compared to a 30-year old, since the older you are, the more likely you'll need healthcare.

I did a quick look on your thought. Catastrophic was $110 and bronze was $159 with same carrier which in coincidence is my current carrier. That could prorate out to a decent separation in price. MooreBonds, don't be telling me that I may need more healthcare costs cause I'm getting older because a $6500 plus deductible is a helluva lot of money to me! Especially when I am used to not spending any money on medical except getting my teeth cleaned!


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[Animorph]

We'll find out what the impact looks like at the end of the year, when the 2015 prices are published.

 

[pb4uski]

We'll find out what the impact looks like at the end of the year, when the 2015 prices are published.

We have some insight into that now. See http://www.early-retirement.org/forums/f38/2015-health-insurance-premium-increase-72271.html

In short, my provider has proposed a 4.8% increase for my bronze plan for 2015 and 9.8% increase overall, but most of that increase is due to ACA changes. Absent the ACA changes, they would have asked for a 3.3% increase instead of 9.8%.

In any event, the 4.8% and even the 9.8% overall increase are less than what my plan increased in 2014 or 2013.

 

[Mulligan]

We have some insight into that now. See http://www.early-retirement.org/forums/f38/2015-health-insurance-premium-increase-72271.html



In short, my provider has proposed a 4.8% increase for my bronze plan for 2015 and 9.8% increase overall, but most of that increase is due to ACA changes. Absent the ACA changes, they would have asked for a 3.3% increase instead of 9.8%.



In any event, the 4.8% and even the 9.8% overall increase are less than what my plan increased in 2014 or 2013.

When I retired in 2010, I bought a $5500 deductible individual plan for $73. Over 4 years later it is $88. The "good old days" are about to come to an end for me soon, I am afraid.


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[pb4uski]

Your health insurance has always been an anomaly. While I'm happy for you, it's unlikely to continue for long and soon you'll be paying out the big bucks for health insurance like the rest of us.

 

[Mulligan]

Your health insurance has always been an anomaly. While I'm happy for you, it's unlikely to continue for long and soon you'll be paying out the big bucks for health insurance like the rest of us.

Yes, I agree as I don't see the carriers benefitting from keeping them in effect. But it does appear catastrophic could be cheaper, than Bronze. Since my policy will be cancelled, I will be eligible for this. The way the system is now set up, I see no reason not to save money so I will buy catastrophic. You can always change plans yearly, so when/if I start to spend medical dollars, I would then upgrade plans.


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[JoeWras]

Your health insurance has always been an anomaly. While I'm happy for you, it's unlikely to continue for long and soon you'll be paying out the big bucks for health insurance like the rest of us.

Haha. I was thinking about this. Every time I'm on these boards and I see "Cannon on the phone" out of the corner of my eye, I think "That's the guy with incredible health insurance." I mean, your deal is that good. It's incredible.

Enjoy it while you can, friend.

 

[Mulligan]

Haha. I was thinking about this. Every time I'm on these boards and I see "Cannon on the phone" out of the corner of my eye, I think "That's the guy with incredible health insurance." I mean, your deal is that good. It's incredible.

Enjoy it while you can, friend.

The thing was, I never thought of it as a good deal. I retired with a couple other people about 7-10 years older in their early to mid 50s and they also got same plan for about $30-$40 dollars more a month. No one who applied got denied. Not ever paying for my insurance I never really had a basis to compare to since at that time I wasn't really an informed person in this area. The irony of it all was we bailed on our group plan that we could have stayed on until 65, because it was $500 a month with $1000 deductible and we thought it too expensive. We cannot get back on it of course now, but I did find out the premium charge has been unchanged since 2010.


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[MooreBonds]

Haha. I was thinking about this. Every time I'm on these boards and I see "Cannon on the phone" out of the corner of my eye, I think "That's the guy with incredible health insurance." I mean, your deal is that good. It's incredible.

Enjoy it while you can, friend.

It's not just Mulligan that has the "in" on cheap health insurance - lots of people in some good states have it (like me, a fellow Missourian like Mulligan). As a 37 year old, my $5,100 deductible Anthem plan only costs me $65/month. I haven't kept up with the various shenanigans with the Obamacare extensions, so I don't remember what the new "final, no we really mean it this time, absolute last year" is for the grandfathered plans....but I'll be renewing my Anthem HDHP until the last day I can at this rate to enjoy it while I can!

 

[Mulligan]

It's not just Mulligan that has the "in" on cheap health insurance - lots of people in some good states have it (like me, a fellow Missourian like Mulligan). As a 37 year old, my $5,100 deductible Anthem plan only costs me $65/month. I haven't kept up with the various shenanigans with the Obamacare extensions, so I don't remember what the new "final, no we really mean it this time, absolute last year" is for the grandfathered plans....but I'll be renewing my Anthem HDHP until the last day I can at this rate to enjoy it while I can!

I thought about dragging your name into this too MooreBonds, but didn't though I knew your rate was very good also. Although everyone I knew who has purchased individual insurance didn't have any maladies that I was aware of, no one got baited and switched to higher rates either. If I can manage to stay healthy and not need medical care, the Obamacare prices will still be cheaper than my old company policy. But if I develop problems, the high deductible and Obamacare prices would be significantly higher than my employer policy I declined.


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