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Old 01-11-2010, 03:24 PM   #41
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We have different markets with mostly different players, the individual and the group market. The individual market is small with people going in and out of the market, from or to employer plans or government plans like medicare. This churning leads to instability and is a problem and why I am very disappointed that we cannot seem to separate insurance from employment. The tax benefit to employers and employees makes it hard to ever justify buying on your own.

The bill makes some things worse. Employers still get a tax break. Instead of helping the individual market with a similar break, the proposal is to limit amount you can deduct to amounts about 10% AGI, rather than the old 7.5%.
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Old 01-11-2010, 05:01 PM   #42
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Maybe Maine will be a testbed. Anthem pulls out and there are no private insurers in Maine, and none can be induced to come in based on the prior actions of the ME legislature. So the legislature institutes a Maine govt run single payer plan for everyone. Everyone gets what they apparently want, and the country gets to see how things go.
Actually, when state insurance markets fail, a common tactic in the past has been to force large, solvent players to stay in the bad market and keep writing policies for losses. This happened relatively recently in the MA auto ins market (I owned shares in a company that an exiting player paid millions to be relieved of its policyholders) and the FL homeowners ins market (State Farm and others were not allowed to leave after 2005 and got hammered).
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Old 01-11-2010, 05:35 PM   #43
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Actually, when state insurance markets fail, a common tactic in the past has been to force large, solvent players to stay in the bad market and keep writing policies for losses.
How does the state force the insurance company to stay in the market? The only "stick" that comes to mind is the threat of barring the insurer from any business in the state (life, car, health, home, etc) if they abandon any of insurance lines. That might work with Allstate or State Farm, but Anthem is strictly health insurance.

I'll bet companies forced to stay in a market writing money-losing policies give great customer service. "Oh, you're unhappy. You don't like either of the two remaining doctors in our network. That makes us so sad. Why don't you just take your business elsewhere, you whiner!!"
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Old 01-11-2010, 05:43 PM   #44
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Insurers have to kowtow before the state ins commissioner. They need permission to enter a state, leave it, wipe their noses, etc. They were not given permission to leave in these cases.
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Old 01-11-2010, 05:56 PM   #45
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Insurers have to kowtow before the state ins commissioner. They need permission to enter a state, leave it, wipe their noses, etc. They were not given permission to leave in these cases.
I believe they can stop writing new business at any time. So far as the existing policies go, they have to get state permission to cancel them. If the state doesn't grant permission, the insurance company can still go to court. This is what happened with Mutual of Omaha, when they exited the individual market throughout the US. New York fought them, but the end result was that MOH was allowed to cancel all the policies issued in NY, as well. I know this because I had a MOH policy issued in NY. My wife had one issued by MOH in Virginia, and hers was canceled two years prior to mine.
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Old 01-11-2010, 09:13 PM   #46
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Will someone who has followed the health care reform give me some reassurance? I feel like I have done nothing wrong to deserve a beating but I sense one is coming my way.

Question: Is Medicare going to be significantly impacted either care wise or cost wise? More specifically is this, will the Supplements be really expensive to cover the shortfalls?
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Old 01-12-2010, 07:31 AM   #47
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Question: Is Medicare going to be significantly impacted either care wise or cost wise? More specifically is this, will the Supplements be really expensive to cover the shortfalls?
Who really knows? However, for budget purposes, the reform bills are counting on $500 billion in Medicare savings over the next 10 years. The fact that the current bills count on Medicare, the biggest unfunded liability in the country, to help fund 50% of healthcare reform doesn't pass the "smell test" with me. IMO, the sensible thing to do would be use any Medicare savings which actually materialize to shore up Medicare.

With reguard to your specific question, seniors are a large and fast-growing voting block, so it's hard to see politically how any significant Medicare cuts will actually occur. As an example, one of the places where the President and Congress is looking for large Medicare savings are the Medicare Advantage programs, but the Senate has already grandfathered those currently in existence to secure the vote of Florida Senator Bill Nelson in its quest to reach the "magic number" of 60 votes.

With regard to the Supplements, I would expect their premiums to grow in line with Medicare expenditures/enrollee. Remember, the Supplements only cover Medicare-approved procedures. So if Medicare were to stop approving certain procedures, the Supplements would no longer cover them. On the other hand, if Medicare raises deductibles or copays, these may be picked up by the specific supplemental policy you have, and, thus, would add to their costs. For example, if Medicare raised the part B deductible (currently $155) to $1000, any supplemental policy which paid this deductible would likely pass along this increase in its premium.
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Old 01-18-2010, 08:43 AM   #48
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YrsToGo - Kaiser Permanente and many of the Blue Cross/Blue Shield companies are non-profit. Guess what? Their premiums are still expensive. If you stripped away every cent of profit, the premiums would still be expensive.
Yes, my prior posts were imprecise. Swap "private enterprise" for "profit seeking enterprise" and you get closer to my intent.

My point is that health "insurance" isn't like other insurance. With car and home insurance the policy holder never expects to file a claim. Many people don't. And who will and who won't isn't generally predictable. That isn't true with health insurance. Everyone eventually gets sick and everyone eventually dies. Some people have conditions that are the equivalent to a predictable car crash every six months. In those cases and in the cases of the elderly were not really talking about insurance at all. We're talking about subsidization. The private market doesn't do subsidization. Government does.


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If people were all required to buy policies that have no up-front benefits except preventative care, the premiums would be much less expensive.
I'd support a system where everyone has some skin in the game. I think 1st dollar insurance is a pretty significant design flaw in our current system. I'm disappointed that none of the health care bills do anything to fix this flaw.
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Old 01-18-2010, 09:07 AM   #49
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I'd support a system where everyone has some skin in the game. I think 1st dollar insurance is a pretty significant design flaw in our current system. I'm disappointed that none of the health care bills do anything to fix this flaw.
Why would they want to fix the easy cost containment flaws? That would be way too rational.
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Old 01-18-2010, 09:18 AM   #50
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Why would they want to fix the easy cost containment flaws?
One answer is those who favor this approach the most decided they'd rather try to stop health care reform at all costs instead of working to make the legislation better.
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Old 01-18-2010, 10:39 AM   #51
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[MOD EDIT]
For those interested, here's a link to the Kaiser Foundation's coverage of the proposal and a link to the (219 page) amendment itself.

From the WSJ:
Quote:
Republican congressional leaders are finally offering a clear alternative to the health-reform plans being developed by the White House and Democrats in Congress. The goals and the rhetoric of both sides are remarkably similar: cover the uninsured, allow people to keep the coverage they have, provide more choices of affordable health insurance, and rein in health costs. But their policy prescriptions are remarkably different.
. . .
Four Republicans in Congress -- Sens. Tom Coburn (Oklahoma) and Richard Burr (North Carolina) and Reps. Paul Ryan (Wisconsin) and Devin Nunes (California) -- will today introduce a bill that moves away from federal centralization. Aptly called the Patients' Choice Act, it provides a path to universal coverage by redirecting current subsidies for health insurance to individuals. It also provides a new safety net that guarantees access to insurance for those with pre-existing conditions.
The nexus of their plan is redirecting the $300 billion annual tax subsidy for employment-based health insurance to individuals in the form of refundable, advanceable tax credits. Families would get $5,700 a year and individuals $2,300 to buy insurance and invest in Health Savings Accounts.
Low-income Americans would get a supplemental debit card of up to $5,000 to help them purchase insurance and pay out-of-pocket costs. They would have an incentive to spend wisely since up to one-fourth of any unspent money in the accounts could be rolled over to the next year. The combination of the refundable tax credit and debit card gives lower-income Americans a way out of the Medicaid ghetto so they can have the dignity of private insurance.
The great majority of Americans with job-based health insurance would see little more than a bookkeeping change with the Patients' Choice plan. But implicit in the policy is the acknowledgment that our system of tying health insurance to the workplace is not working for upwards of 45 million uninsured Americans.
In my view, it was far from perfect, but it did represent an alternative approach that could have served as a useful starting point. Maybe it still can--rumor has it that the present legislation might run into some unexpected trouble in the coming weeks.
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Old 01-18-2010, 10:53 AM   #52
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For those interested, here's a link to the Kaiser Foundation's coverage of the proposal and a link to the (219 page) amendment itself.

From the WSJ:
In my view, it was far from perfect, but it did represent an alternative approach that could have served as a useful starting point. Maybe it still can--rumor has it that the present legislation might run into some unexpected trouble in the coming weeks.
[MOD EDIT]

Let's take an example from a union with a "Cadillac" plan that costs $30,000 per year for a family. Let's say that same union could get an HSA plan with a $5,000 deductible for the family at a cost of $10,000 per year. Let's say the employer contributed that full $5,000 into an HSA for the employee - no tax to the employee for the benefit. Now the employee has a health plan that costs $20,000 per year less than the current one, and has the entire out-of-pocket expense in an HSA to be used in case of a claim. The out-of-pocket expense to the employee for the whole year is $0. That's less than the Cadillac plan with co-pays for everything. If they have a $5,000 claim, they just saved $15,000. If they don't have any claims, they just saved $20,000.
Now the employee has a reason to reduce their cost of care - they get to keep more of the money!

Since HSA money rolls over every year, a 30-year-old employee who never had a claim would have $175,000 in their HSA account that can be taken out freely at age 65 with no penalty. That money also could have grown well over $500k with interest by age 65. They also saved the employer over $700,000 based on current rates. That's close to a $1 million difference, and that's just for one employee, not taking into account the even larger difference as premiums rise over time. Multiply that by a million employees. Obviously, things change over 35 years, but you get the idea. It's stupidity at its finest.
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Old 01-22-2010, 08:29 PM   #53
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[MOD EDIT]
For those interested, here's a link to the Kaiser Foundation's coverage of the proposal and a link to the (219 page) amendment itself.
So if I understand this plan correctly, unhealthy people will be insured by the tax payer (high risk pool) while profitable healthy people will get insurance from an insurance company, or not at all. That is at least as long as they stay healthy, after which they can be dumped on the state high risk pool.

Sounds like a great plan. For the insurance companies.

Oh, and apparently expanding the high risk pools to cover the 30MM+ uninsured can be accomplished without raising any taxes. Is that an unfunded state mandate or are they assuming that the high risk pool premium will be high enough to cover its costs? In which case, no one will be able to afford it.
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