Whither we get health insurance for 2017?

[MichaelB]

I wonder when the Mexican public healthcare provider, the Secretariate de Salud, will apply to offer exchange plans to Arizona residents in underserved counties. The Mexican government would make money (based on prevailing US insurance prices) and Arizonans would finally have a "public option." Yes, some creative methods would need to be employed to get patients to the existing providers (until Mexican clinics could be set up in Arizona), but that seems to be a minor problem when considering the long-term win-win aspect of this proposal.

Actually, most Arizona residents already have good health care insurance options. Those on Medicare, TriCare, Medicaid, or covered by group health plans now total 90% of the population, and they're fine. Telling the remaining 10% to go to Mexico is one option. Another is to stop treating them as a separate group, or stop letting the insurers pick and choose their customers and apply the same rules to them that they want from us.

 

[samclem]

Another is to stop treating them as a separate group, or stop letting the insurers pick and choose their customers and apply the same rules to them that they want from us.

So, in broad strokes: Additional regulation that requires any company offering health care insurance to the private market (group plans, employer plans, etc) to offer similar ("complying") insurance via the exchanges? Would the rates have to be the same as those employer plans (and, since these are negotiated individually with each group/employer based on risk profiles, which rates would they be required to offer?). In any case, this would have the impact of driving up the prices of these private plans (otherwise, the insurance companies would already be offering those rates on the exchanges,and making money). Maybe this transfer of risk and costs to private customers with resultant instability in that system, in the grand scheme, is a "feature," not a "bug."

The exchanges were supposed to offer a pool of applicants with a risk profile fairly representative of the general public. Apparently, there's something happening that the central planners did not anticipate.

 

[MichaelB]

So, in broad strokes: Additional regulation that requires any company offering health care insurance to the private market (group plans, employer plans, etc) to offer similar ("complying") insurance via the exchanges? Would the rates have to be the same as those employer plans (and, since these are negotiated individually with each group/employer based on risk profiles, which rates would they be required to offer?). In any case, this would have the impact of driving up the prices of these private plans (otherwise, the insurance companies would already be offering those rates on the exchanges,and making money). Maybe that, in the grand scheme, is a "feature," not a "bug."

The exchanges were supposed to offer a pool of applicants offering a risk profile fairly representative of the general public. Apparently, there's something happening that the central planners did not anticipate.

Central planners? Really?

The weakness in the current scheme is unavoidable. In any region, if an insurer is free to offer policies to some groups but not others some will be underserved. Segmenting them into smaller groups will never lead to a more positive outcome. Allowing the insurance companies to exclude groups, for whatever reason, will always benefit the insured population and create the appearance of cost saving, as the cost of the exclusion is never included.

Large groups deal with this easily and without complaint. Everyone is included, premiums are the same for all members regardless of gender, age, or health condition.

 

[pb4uski]

....Large groups deal with this easily and without complaint. Everyone is included, premiums are the same for all members regardless of gender, age, or health condition.

Individual health insurance in Vermont has been this way for a long time... no underwriting was allowed even before ACA and the same price for all plans irrespective of gender, age, tobacco use, etc. While I concede that it sounds wacky it seems to work well... our prices are a bit higher than national averages for individual health insurance but our increases over recent years have been much more moderate.

I guess that I don't understand how individual health insurers currently choose customers as you are talking about.

 

[MichaelB]

I guess that I don't understand how individual health insurers currently choose customers as you are talking about.

Well, in the case of Maricopa County, Arizona, major insurers offer coverage for Medicare, Medicaid, and large groups. In effect, they are choosing to serve 90% of the population and choosing not to serve the remaining 10%.

 

[explanade]

Do off-exchange plans give you a Form 1095 for your tax returns?


Yeah it seems like insurers are cherry-picking counties or "redlining" ones they don't want to bother with. Not necessarily because of the money the residents have but maybe more what kind of providers they have to deal with in certain places.

 

[pb4uski]

Well, in the case of Maricopa County, Arizona, major insurers offer coverage for Medicare, Medicaid, and large groups. In effect, they are choosing to serve 90% of the population and choosing not to serve the remaining 10%.

Ah, I see... they are just deciding to not offer individual health insurance. I understand what you are saying for large group and Medicare (I assume that you mean Medicare supplemental coverage) but I don't get Medicaid.... isn't Medicaid a government program? What is a private insurer's role with respect to Medicaid?

 

[Sunset]

.......

The exchanges were supposed to offer a pool of applicants with a risk profile fairly representative of the general public. Apparently, there's something happening that the central planners did not anticipate.

People are allowed to not participate by paying a tiny fine. I wish the IRS had the same choice available either pay my income taxes or pay a fine of $250 or 2% of my income.

 

[RockyMtn]

This whole thing in Az is becoming quite a joke. My GF was with Cigna when we were in Colorado. Bad experience all in all. Now that we are here in Az she went with BCBS instead of Cigna and loves it. Now BCBS has exited and our options in Maricopa County are quite limited. Cigna network through Centene/Ambetter looks like our only exchange choice as of now. (At least that's my understanding).

Looks like we will have to go off exchange and get some sort of plan for her directly from an insurer. Only four more years to medicare!

 

[samclem]

People are allowed to not participate by paying a tiny fine.

And, on top of that, the law still requires that ERs must provide treatment for people regardless of ability to pay. They had the ability to pay--to buy insurance, often with government assistance, that would have covered the ER treatment. That's what the "affordability" provisions of the ACA are designed to do, and we all pay for that. So, for many people there just are not many financial or even medical consequences for "going bare," especially when an individual can simply sign up at any time and get a newly discovered chronic condition covered.

 

[explanade]

Maximum penalty is 2.5% or $695, whichever is greater. However the cap is $2085.

The percentage apparently will not change but the flat fee will be indexed for inflation.

But that cap keeps it low enough for people to forego paying premiums I guess.

So if someone is making $70k, he or she wouldn't be eligible for subsidies. They'd pay a penalty of $1750. Still may be preferable to paying $400-500 a month in premiums?

Or if the person is under 40, the premiums would be a lot less?

At $70k, that person may be able to accumulate some savings and other assets. So going without insurance, an accident or catastrophic illness could leave her with a big bill. Even one visit to an ER could be a bill over $10000.

So the "young invincibles" can roll the dice and pay the $1750 penalty but save $2-3k more in premiums and out of pocket maximums?

 

[pb4uski]

What you can get for medical care if you are uncovered and walk into the ER is quite limited as I understand it... for example, if you're diagnosed with cancer then you are SOL and on your own.

While I don't doubt that there are some really stoopid people out there who will roll the dice because health insurance is too expensive, if you have anything to loose it would be foolish to go without health insurance... one minor illness and any savings you have would be wiped out.

If you don't have anything to lose then you won't get wiped out... but you could develop an illness that is not covered by walking into the ER and then either have to scramble around to try to get charity care or die.

 

[explanade]

Presumably if you're not making enough to have savings or other assets, then you're likely eligible for subsidies.

 

[pb4uski]

True, but for some people out there even after subsidies they view health insurance as too expensive and not worth the money.

 

[MichaelB]

Ah, I see... they are just deciding to not offer individual health insurance. I understand what you are saying for large group and Medicare (I assume that you mean Medicare supplemental coverage) but I don't get Medicaid.... isn't Medicaid a government program? What is a private insurer's role with respect to Medicaid?

Around half the states, including Arizona, implement "Managed Care" Medicaid programs. Private insurance companies enroll the recipients and manage the care like any other insurance policy, except premiums are paid and coverage terms are dictated by the state.

True, but for some people out there even after subsidies they view health insurance as too expensive and not worth the money.

No doubt not enough "young invincibles" is a legitimate cause, but the majority of people without health care in the US continue to be the working poor. In some cases they are not eligible. In other cases they are and it is not clear why they do not have coverage. This is an understudied demographic issue.

 

[explanade]

It's kind of like 401k. A lot of workers starting out won't sign up for 401k because they don't want deductions from their paychecks, even if the employer matches.

So some studies show that with auto opt-in, they don't miss the deduction as much in their after-tax paychecks.

Maybe there's some kind of mental impediment to the notion of paying so much after-tax money for circumstances or eventualities which are notional.

 

[LARS]

Never thought I would look forward to the day wife and I each turn 65. What a screwed up system we've cobbled together.


Sent from my iPad using Early Retirement Forum

 

[CDRE]

Having seen enough ineptness and indifference of bureaucrats and politicians, I prefer a solution involving private enterprises, but somehow it's elusive.

+1 Very well stated!

 

[samclem]

Presumably if you're not making enough to have savings or other assets, then you're likely eligible for subsidies.

An invalid assumption I'd say. The eligibility for subsidies is entirely delinked from assets. There are many people making enough money to pay for all or part of their own health care costs/health insurance costs. They prefer to spend all they make (and more) on other things. They may or may not be eligible for subsidies, but regardless they want me (and you) to pay for their health care if they need it (through higher health insurance premiums we pay and through taxes). The law as written (and interpreted) validates the fundamental wisdom of their position. So, we have the situation we have now.

 

[GTFan]

True, but for some people out there even after subsidies they view health insurance as too expensive and not worth the money.

That's certainly true for the staff at the small nonprofit I volunteer at - none of them want to pay for ACA insurance even with subsidies or penalties. They'd rather roll the dice and pay cash for visits and procedures, and these are 50+ year old folks.

I suspect if any of them had decent portfolio sizes they might look at it differently, but I don't think they do.

 

[Dawg52]

Never thought I would look forward to the day wife and I each turn 65. What a screwed up system we've cobbled together.

Ditto on all that.

 

[rodi]

I have an extended family member who decided to roll the dice (and pay the tax penalty) and go without insurance. He had a heart attack earlier this year. The hospital did not refuse to treat him - in fact he had two separate operations (2 different stents placed.) About $150k in bills.

He is still responsible for these bills. He didn't get "free" treatment. Fortunately he was able to negotiate the bill down to about $80k, borrow the money, and is making payments towards the debt.

Hind sight - he wishes he hadn't gone without insurance.

He also bought insurance for his follow on care.

TNSTAAFL

 

[rodi]

Never thought I would look forward to the day wife and I each turn 65.

DH turns 65 beginning of next year. So many benefits to this. Both financial (cadillac plan F suppliment and drug plan + part B is still cheaper than the HMO HSA qualified HDHP through the exchange) and convenience (since he has a different plan we have to forgo the premium tax credit up front in order to have 2 separate plans due to a "feature" of covered CA's software.)

But - going back to the issue of this thread.... I'm very fortunate to live in area where there are many carriers on covered CA for my county.

 

[explanade]

How old was the guy who had the heart attack?

Does the hospital ask to see financial statements like bank statements or tax returns before agreeing to negotiate the bill down?

If they had reasons to believe he had assets or big income, would they have negotiated the bill?

Two operations and associated hospital stays could have been worse than $80k. Maybe even worse than $150k.

 

[MichaelB]

Does the hospital ask to see financial statements like bank statements or tax returns before agreeing to negotiate the bill down?

If they had reasons to believe he had assets or big income, would they have negotiated the bill?

I recall an interview on NPR with the director of a hospital in Miami (Baptist, I think) and he affirmed they applied income tests before lowering rates. Need had to be proven, and the cutoff was pretty low - 2X the poverty rate or somewhere in that range.