Whither we get health insurance for 2017?

[UtahSkier]

My plan has a rate request of 35%! What do I win?

Not much to discuss about poor management or business strategy. My plan states they have 137000 subscribers. Average 2016 premium is 231 pmpm and average paid claims are 324 pmpm.

Clearly an unsustainable business model. With little ability to reduce payment to providers, the plan must raise prices or cease business activities.

[hesperus]

We here in Colorado are going to be voting this november for a state single payer plan, similar to that done in Massachusetts. With the Affordable Care act in a death spiral (in my opinion), I do hope it passes, although there are conflicting studies as to how sustainable the program would be. Even though colorado has a progressive voting record, I think this one will be defeated, unfortunately.

[pb4uski]

As I understand it, Massachusetts is NOT currently single payer.

Vermont studied single payer really hard and despite a Democratic governor, the governor decided it was not economically sustainable and killed it.

[NW-Bound]

Quote:

Originally Posted by UtahSkier My plan has a rate request of 35%! What do I win? Not much to discuss about poor management or business strategy. My plan states they have 137000 subscribers. Average 2016 premium is 231 pmpm and average paid claims are 324 pmpm. Clearly an unsustainable business model. With little ability to reduce payment to providers, the plan must raise prices or cease business activities.

That average premium of $231 per member per month seemed incredibly low, but then I forgot that the much higher rate that I am paying does not apply to families with younger kids. Older folks pay more, but they consume even more!

Yes, people still unknowingly blame insurers for the high premium, and while insurers are no saint, they are not the root cause of the problem. I saw recently that insurers make only 2.5% on the money they take in, and in California a state regulator recently said that ACA plans make 1.5% for insurers.

What businesses make 1.5% of gross? Only grocers have net profit margins that low.

[UtahSkier]

I think my plan makes 9.9%. The problem here is basic supply and demand. The demand to stay healthy and alive simply overwhelms the supply. The suppliers simply name their price and its a "take it or leave it" situation. The EpiPen is a recent example.

There is no ability to control pricing by suppliers.

[NW-Bound]

Quote:

Originally Posted by UtahSkier ... The demand to stay healthy and alive simply overwhelms the supply.

Fix it for you.

I forgot something. That is, the profit margin of health insurers may vary quite a bit between ACA plans and their other operations involving Medicare and Medicaid. I have seen reports saying they are making better money outside of ACA. If your business is making more money in one area than the other, would you not drop the money losing side to work more on the juicy side?

Makes me wonder how better they would do if Uncle Sam takes over everything. I should be buying their stocks. If you cannot beat them, then join them.

Oh wait! Who wants the insurers? I want to invest in the healthcare providers. That's where the bulk of money is flowing.

Oh wait again. Aren't most hospitals "non-profit" organizations? They manage to spend all the money, so there's no profit left. And they even have the gall to run charity drive.

Son of a gun! How can I join in the loot?

[nun]

Quote:

Originally Posted by pb4uski As I understand it, Massachusetts is NOT currently single payer. Vermont studied single payer really hard and despite a Democratic governor, the governor decided it was not economically sustainable and killed it.

Nope, no single payer in MA, but there was a lot of complaining when ObamaCare came in because it messed up the program already in place.

I'm very grateful that being an MA state early retiree I get a non-Medicare plan with a $300 deductible and $4k out of pocket max for $100/month. That should be the norm, then most people could afford the premium and not be afraid to go to the doctor because of large deductibles. Whether it's paid for by Government single payer or private health insurance, the basic problem in the US is that health care costs are simply too high.

[NW-Bound]

So, how is MA's program financed? How do they maintain the healthcare cost low enough to have a plan "with a $300 deductible and $4k out of pocket max for $100/month". I would love to get on one like that.

Pre-ACA for me, it was $10K deductible, which is also the max out-of-pocket, for the 2 of us, with a premium of $600+/month. This was in 2014. Of course, it did not cover existing conditions. My ACA plan is more expensive, but then it has to cover more due to the law.

[nun]

Quote:

Originally Posted by NW-Bound So, how is MA's program financed? How do they maintain the healthcare cost low enough to have a plan "with a $300 deductible and $4k out of pocket max for $100/month". I would love to get on one like that. I/quote] The MA plan for state workers is just a very good employee/retiree plan and it's largely financed through taxation......although I worked for the Medical School and that pays for itself as it has a couple of profitable pharma spin offs. Still the state pays 80% of the premium and is big enough to negotiate good deals. If you have ACA coverage you get similar insurance as in other states with the high deductibles etc.......although MA does limit rate increases to inflation.

Quote:

Pre-ACA for me, it was $10K deductible, which is also the max out-of-pocket, for the 2 of us, with a premium of $600+/month. This was in 2014. Of course, it did not cover existing conditions. My ACA plan is more expensive, but then it has to cover more due to the law.

Before I qualified for state retiree health insurance by reaching age 55 I had to pay the full premium...the state allows former employees to buy insurance at the fill premium for as long as they want....sort of COBRA without the time limit. So I was paying $500/month for the low deductible plan. I applied for ACA two years ago as I thought it might be less expensive, but was refused as my income was too low and was put on the MA Medicare plan. The thing is, there is that the state has a program to give subsidies to the poor if they have access to employer health insurance to keep them off Medicare.....the bottomline was that the state paid $450 of my $500 health insurance.....which was provided by the state in the first place. Now that I'm officially retired my premium actually went up by $50/month.

[karen1972]

One strange observation is that in NC, the 'group' plans only increased around 4% but the individual plans increased 15-20%. Which 15% isn't the end of the world but it does make one curious why the group plans didn't go up at the same rate.

I'm curious that NC now shows only 1 insurer as there were applications at least for a number of small insurers in addition to the big known ones...so did the small ones pull out too? we shall have to wait and see.

[MBSC]

Quote:

Originally Posted by karen1972 One strange observation is that in NC, the 'group' plans only increased around 4% but the individual plans increased 15-20%. Which 15% isn't the end of the world but it does make one curious why the group plans didn't go up at the same rate. I'm curious that NC now shows only 1 insurer as there were applications at least for a number of small insurers in addition to the big known ones...so did the small ones pull out too? we shall have to wait and see.

Group plans have a more stable risk pool leading to more stable rate increases.

The map in the link below provides a more accurate picture of 2017 NC exchange plans, with BCBSNC in all counties and Cigna in a few. They still have time to withdraw. The NC "small insurer" applications are for group plans and off-exchange plans, not on-exchange individual plans.

See counties where few insurers are participating in Affordable Care Act echanges - WSJ.com

[NW-Bound]

Thanks for the above map. It has a lot more details and info than the one I posted in the OP.

Holy mackerel! My county is going from 8 insurers down to 2. And it's a large market with 126,000 insureds, not some bitty counties with a few hundred enrollees.

[nun]

Quote:

Originally Posted by NW-Bound Thanks for the above map. It has a lot more details and info than the one I posted in the OP. Holy mackerel! My county is going from 8 insurers down to 2. And it's a large market with 126,000 insureds, not some bitty counties with a few hundred enrollees.

If insurers are pulling out of markets because they can't make money when most people seem to think that their product is very expensive and provides little value what does that say about the basic cost of health care.....it's simply too expensive for most people to afford.

It takes a lot for a healthcare cost bubble to burst as most people will spend money to stay alive and be healthy, but it's getting beyond that now and the crash will be nasty.

[MBSC]

Quote:

Originally Posted by NW-Bound Holy mackerel! My county is going from 8 insurers down to 2. And it's a large market with 126,000 insureds, not some bitty counties with a few hundred enrollees.

That sounds like Maricopa County, AZ. Phoenix Health Plans announced Thursday they are dropping out of the 2017 AZ exchange leaving Cigna as the only on-exchange option in that county.

Reference: https://www.thehertelreport.com/phoe...-the-2017-him/

[NW-Bound]

OMG!

That article was on Sep 1st. I searched and even the local newspaper talked about it just yesterday, Sep 2nd. The short article concludes with this:

"Phoenix Health Plans decided its financial risk would be too great to be one of two remaining marketplace options in the nation's fourth most populous county."

What makes us so special? Too many sick people here?

Oh well, that makes my shopping for insurance very simple then. Eventually, it is going to be even simpler.

[pb4uski]

In Vermont we have only had two individual health insurers for many years, BCBS and MVP so I'm not sure if a reduced number of carriers is a death knell, especially with minimum loss ratio requirements. Recent rate increases have been relatively modest compared to many parts of the country.

[travelover]

Quote:

Originally Posted by pb4uski In Vermont we have only had two individual health insurers for many years, BCBS and MVP so I'm not sure if a reduced number of carriers is a death knell, especially with minimum loss ratio requirements. Recent rate increases have been relatively modest compared to many parts of the country.

I'm not sure more insurers is a good thing. The insurer negotiates the rates from the medical providers and drug companies. The larger share of the market the insurer has, the more leverage it has to get a good rate. By law, the insurer must spend 80% of premiums on patient care, so they are seemingly limited in what they can charge in premiums.

[NW-Bound]

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Originally Posted by travelover ... The larger share of the market the insurer has, the more leverage it has to get a good rate. By law, the insurer must spend 80% of premiums on patient care, so they are seemingly limited in what they can charge in premiums.

Ah, that's a glimmer of hope.

I am a strong believer in the capitalist mantra that people are motivated by financial gain. If the insurer makes money by fighting for me, it is a lot better than to pray that they have a nice heart.

[samclem]

Quote:

Originally Posted by travelover I'm not sure more insurers is a good thing. The insurer negotiates the rates from the medical providers and drug companies. The larger share of the market the insurer has, the more leverage it has to get a good rate. By law, the insurer must spend 80% of premiums on patient care, so they are seemingly limited in what they can charge in premiums.

Or, perhaps it is the other way around. With the exchange market to themselves, they can price policies as high as the regulator will allow (without losing market share to a competitor). And, because the regulators will be reluctant to drive out the very last insurer selling on the exchange, they are likely to be agreeable to requested rate increases. Yes, the insurer could theoretically use their power to negotiate lower rates from providers, but providers will still have the (vast) majority of patients who get their care from employer-sponsored, group, and Medicare plans, so the lone exchange insurance company still might have little ability to get lower rates. And, why should they even try? They will get 20%, the health care providers get 80%--their interests are best served if the while bill gets larger over time (even if driven by increasing payments to providers) because their 20% will get larger.
It's unlikely individual patients shopping for medical care will/can drive down prices for that care--the conditions for "price shopping" (time, availability of actionable information, etc) generally don't exist. But it would not be impractical for consumers, given sufficient information, to choose between a few insurers based on cost and quality, and the insurers (or insurer-provider entities) could do the nuts-and-bolts work of improving quality and reducing costs. But, the present system isn't designed to make that happen.

[MichaelB]

Quote:

Originally Posted by NW-Bound Ah, that's a glimmer of hope. I am a strong believer in the capitalist mantra that people are motivated by financial gain. If the insurer makes money by fighting for me, it is a lot better than to pray that they have a nice heart.

I would say your most probable glimmer of hope is an off-exchange polic directly with the insurer. That, until you either reach Medicare age, or your state insurance regulator finds a way to improve coverage. Not so easy in a state with low population density.