The Individual Health Insurance Market vs PPACA

[nvestysly]

Individual Health Insurance Market vs Exchange

In post #19 on another thread (found here) I indicated non-PPACA premiums are lower than PPACA premiums for a similar policy.

For reference, here are the excerpts from that thread:

For people with unsubsidized premiums PPACA insurance costs more than conventional individual insurance. And for those who receive subsidies don't forget that's somebody else's money paying for your premium.

Not true.

Definitely not true. We're saving a considerable amount over COBRA and even more vs. what we would be paying on the private market based on 2013 ehealthinsurance.com rates. We've had some minor aging joint issues the last two years and we each have a history of prescription drug use, so I'm not even sure we could get coverage privately. We are far from qualifying for a subsidy. I've seen people turned down for some really stupid stuff.

As you can see, at least two forum members said my statements were not true. The statements are true for me (and I presume others in similar situations). I realize they may not be true for everyone and I should have identified several caveats that make it true for me. Here are the details:

DW and I have a United Health Care HSA that allows us to see a wide variety of doctors and use a wide variety of services both in and out of network. Our maximum OOP expenses are capped at the deductible. The plan is called HSA100 meaning 100% of expenses are covered after the deductible is met.

In addition, our deductible rolls over on a three-year basis meaning if we don't meet the deductible in year one the amount we paid for year one services decreases the deductible for year two and so on for year three. In year four the process continues as the next year is added the earliest year falls off.

As I said, we have a wide variety of choices to see doctors and use facilities that might normally be considered out of network. Yes, we did have to deal with an exclusion period for pre-existing conditions (so this policy is not for everyone). However, we pay $470.53 per month. The closest policy I can find with PPACA places limits on the provider network and only pays for emergency services out of network. The premium for this PPACA policy is $737.23

It could be agued that my policy and a PPACA are not the same. That's true. However, I don't want coverage for pre-natal care, vision and dentistry for children and several other things PPACA includes that don't suit my needs. So I would argue that I can buy a suitable policy on the open market for less than PPACA policy. I think the same thing would be true for some others.

You might be thinking “hey what about the PPACA subsidy?” Surely that makes PPACA less expensive. I choose to look at the unsubsidized premiums for PPACA policies in order to compare them to non-PPACA policies. Subsidy amounts will vary dramatically so rather than cloud the premium discussion with subsidized amounts I choose to keep it simple.

DW and I may not qualify for a subsidy or if we do it will be relatively small. On the other hand we do itemize our tax return and we receive the equivalent of $100 per month as a tax deduction since we pay for our own medical insurance and contribute to an HSA.

My main reason for making the initial comment was to show that there are some people who are perfectly happy with their existing health insurance policies, we’re paying less than a similar policy via PPACA and we think other people may fall into the same camp. It’s not for everyone, but it’s worth considering.

I didn’t refer to COBRA in my original post so I’m not sure why that subject came up. For comparison, my COBRA rates were over $1200/month. As I said above the UNH HSA100 policy is $470.53/month. So yes, I’m saving quite a bit over COBRA rates too. Much of that savings is because I pay for who I am – 54 YO male with 51 YO spouse – rather than being lumped in with people who are pregnant, who have children, and who are much older.

I know several people who didn’t think they could obtain private health insurance so they didn’t even apply. They heard so many stories from friends of friends about being denied they didn’t think they would be approved. I’m sure there were problems. There is no doubt the medical insurance situation in the USA needed to be tweaked. Unfortunately, some people let all this doom and gloom prevent them from considering individual health insurance. I was almost one of those people until I researched the situation, called an insurance broker and found out that obtaining insurance was not a difficult as many people would lead you to believe. A friend with a significant pre-existing condition said she was approved for individual policy too. I’m only suggesting that there are alternatives to PPACA. Due diligence should be applied.

On Edit:

Thread title was changed from "The Individual Health Insurance Market vs PPACA" to "Individual Health Insurance vs Exchange"

 

[Theduckguru]

Yes, there are losers in the ACA. That doesn't mean you will remain a loser as you listed your ages in the early 50s. Come back when you are 60 and comment. YMMV.

 

[audreyh1]

You made a blanket statement that "For people with unsubsidized premiums PPACA insurance costs more than conventional individual insurance." and that statement was not true.

YOU may have a grandfathered policy that you are able to continue, that is less expensive than the ACA compliant policies that can be purchased today (and there are in fact no new non-compliant policies available for purchase). But many folks have found that the new policies are cheaper than what they will pay if they continue their old plans. It would be wrong to make the claim either way. It clearly depends.

It is also not clear what you mean by "conventional insurance", as grandfathered plans are no longer available, and as such are no longer "conventional". I took it to mean plans people already had and were able to keep (grandfathered).

What alternatives do you think there are to PPACA? Do you mean going directly to an insurance company and not through healthcare.gov? Those are still ACA compliant plans and in many cases identical to what can be purchased through healthcare.gov.

The only alternative to PPACA is to stick with an old, grandfathered plan that they've already been on since before March 23, 2010. For some people that works out better $$ wise, for others it does not.

Anyone who doesn't currently have health insurance does not have that option and will be buying a "PPACA" plan as all new plans offered for 2014 and beyond must meet that criteria.

It's not a case of "Individual Health Insurance Market versus PPACA" - it's grandfathered plans versus PPACA, and that's only an option for folks who are already on that plan.

 

[mpeirce]

My wife is in her early 60's and the ACA compliant policy for her is still more expensive.

Anthem is my hero for letting us avoid the ACA policies for another 12 months...

 

[nvestysly]

The only alternative to PPACA is to stick with an old, grandfathered plan that they've already been on since before March 23, 2010. For some people that works out better $$ wise, for others it does not.

Anyone who doesn't currently have health insurance does not have that option and will be buying a "PPACA" plan as all new plans offered for 2014 and beyond must meet that criteria.

It's not a case of "Individual Health Insurance Market versus PPACA" - it's grandfathered plans versus PPACA, and that's only an option for folks who are already on that plan.

Okay, now it's time for me to use your phrase... That's Not True!

Once again, you cannot believe everything you hear or read or see. It pays to do your own legwork and find what works for you. PPACA is not the only answer.

My plan is not grandfathered. It was purchased on the open market, individual market, non-PPACA market - whatever you want to call it. It was purchased after the date for the "grandfather" clause.

I called my insurance broker today and he said he is still underwriting policies every day. He is not participating in the PPACA market because he didn't like the licensing that was required of him as a broker. That was his choice. So I asked him... does that mean you don't sell health insurance any longer? His answer was an emphatic no. He is continuing to sell policies and will continue to do so. As far as he knows, the policies he is selling (including mine) are valid and will continue to be valid. Of course the biggest caveat is there is an exclusion period for pre-existing conditions.

 

[Mulligan]

Okay, now it's time for me to use your phrase... That's Not True! Once again, you cannot believe everything you hear or read or see. It pays to do your own legwork and find what works for you. PPACA is not the only answer. My plan is not grandfathered. It was purchased on the open market, individual market, non-PPACA market - whatever you want to call it. It was purchased after the date for the "grandfather" clause. I called my insurance broker today and he said he is still underwriting policies every day. He is not participating in the PPACA market because he didn't like the licensing that was required of him as a broker. That was his choice. So I asked him... does that mean you don't sell health insurance any longer? His answer was an emphatic no. He is continuing to sell policies and will continue to do so. As far as he knows, the policies he is selling (including mine) are valid and will continue to be valid. Of course the biggest caveat is there is an exclusion period for pre-existing conditions.

Nvestysly, I do not think that is possible after the end of the year. True, underwriting is still allowed until the end of the month, and you may be allowed to stay on it through next year. But I believe it ends there. I have same type of policy that is not grandfathered, and it has been extended until the end of next year. But at that point it is my understanding the underwriting low rate party ends. Whether you are a winner or loser in premium costs is largely a condition of your age, sex, and state you live in. For example I am getting whacked. But if I lived in New York, and was one of the few unfortunate souls who had individual insurance there, I would be getting a nice premium reduction in relation to their current rates from what I have read. If you hit the perfect trifecta like I did (male, not elderly, and highly underwritten premiums) chances are you would get the biggest rate increase.

 

[nvestysly]

Nvestysly, I do not think that is possible after the end of the year. True, underwriting is still allowed until the end of the month, and you may be allowed to stay on it through next year. But I believe it ends there. I have same type of policy that is not grandfathered, and it has been extended until the end of next year. But at that point it is my understanding the underwriting low rate party ends. Whether you are a winner or loser in premium costs is largely a condition of your age, sex, and state you live in. For example I am getting whacked. But if I lived in New York, and was one of the few unfortunate souls who had individual insurance there, I would be getting a nice premium reduction in relation to their current rates from what I have read. If you hit the perfect trifecta like I did (male, not elderly, and highly underwritten premiums) chances are you would get the biggest rate increase.

Yes, I wonder what will happen at the end of 2014. The letter I received from United indicates my policy is fine for all of 2014 and they believe it will be okay after that. When I called to confirm this they were hesitant to say the policy would continue indefinitely because they simply cannot make that promise. At this point it is their belief that I will be able to keep my policy for many years.

Apparently my policy comes very close, or actually meets, PPACA requirements. I don't fully understand this but I'm going with what United Health Care told me. For instance, mental health was already in my plan because my state required it. We don't have any lifetime caps. Limited pregnancy care is included but it's part of annual checkups rather than specifically being pre-natal care. So United Health Care believes this complies with PPACA or not. Maternity care was offered but I declined it as was the case with any coverage for children. So United Health Care thinks my plans meets PPACA requirements even though it's not sold on the exchange.

As for the end of the 2013 year I'm going with what my insurance broker told me. He is selling and will continue to sell health insurance policies. He indicated very few of his clients have had insurance discontinued. He also said he has some policies starting/effective in 2014. He doesn't sell PPACA insurance so his plans can only be the old style. Maybe our insurance agent is better than most but I feel like he's helped us quite a bit. We have what I believe to be a good policy, at a reasonable price. When we chose this policy we specifically looked at a robust policy with good coverage, big network, access to specialists, access across state lines, reasonable OOP maximums (for us), etc.

 

[Texas Proud]

Nvestysly,


I am with Mulligan on this. Starting in 2015, unless something else happens in the interim, you will more than likely lose your current plan...


I have checked at some of the companies websites and NOBODY offers any plans that are not compliant.... if you are starting on Jan 1, 2014. I have checked the prices given vs the sites that are supposed to be giving the rates on the exchange and they are the same.... heck, they even have the metal level in their names at some companies....


The price increase that you mention is the big reason that people are complaining.... from reports on TV and the internet it is not unheard of 50% increase and some with 100%....


Like you, I hate it when the defenders talk about the subsidized rate as that is a cop out IMO.... just because someone else is paying for it does not mean the cost is less....

 

[ERhoosier]

It may be premature to make rigid statements about what will or will not be allowed under ACA after "grandfathering" expires ('15 & beyond). The Admin continues to modify ACA implementation (e.g. delaying large employer HI mandate despite that date being specified in the law, tweaking definition of "grandfathered" plans, etc.), courts (inc SCOTUS) will continue to weigh in on various specific provisions (e.g. contraception mandate), and both political parties will continue to push legislation to significantly alter ACA implementation.

That said, ACA allows carriers to sell ACA-compliant, non-subsidized Plans outside the Exchanges without dictating exact premiums. It is possible (though IMHO not likely) that such Plans could be sold for less than Exchange versions due to less clerical overhead of dealing with subsidies &/or better loss experience over time (folks not getting subsidies using less healthcare resources).

Also- In ACA there are 9 exemptions to the individual HI mandate, inc. members of a health-sharing ministry, economic hardship (ACA HI premiums would be >8% of income), certain Indian tribes, etc. It is not clear to me if carriers might eventually be allowed to offer some form of lower-cost non-compliant HI to those individuals.
The Individual Mandate | Your headquarters for an inside look at the latest news and views on Health Care Reform

 

[audreyh1]

In 2014, I don't think any insurance agent can sell new individual policies that are not ACA compliant. And unless changed, no individual health insurance policy that is not ACA compliant and not grandfathered can be renewed after Oct 1, 2014. This last part was a recent extension.

Perhaps your broker is just saying he won't sell plans through the state or Federal Exchanges that are eligible for the tax subsidy? That requires extra paperwork/certification for the insurance agent to become a "licensed navigator" or otherwise register to sell insurance through the exchange. The "off exchange" plans available to start Jan 1, 2014 and later are still ACA plans.

 

[nvestysly]

I just re-read the letter I received from United Health Care. It certainly leaves them with wiggle-room to change things as the new regulations are written and implemented. In one section of the letter it refers to coverage rather than a policy - I suppose that means there could be a new policy with different features. On the other hand, portions of the letter indicate my policy is being tweaked to conform to PPACA. Some of those tweaks have already occured. For instance, United amended our policy so the policy year is now the calendar year rather than beginning on the date I purchased the policy. Another amendment was included to say the policy may be changed to conform with federal law as required.

Who knows? Maybe there is a big premium hike in my future. As with many things in life there is no guarantee. I continue to believe that relatively young, healthy people can purchase policies for less than what's being offered on the exchange. Any given situation may be different but it's worth understanding before you simply press the "apply" button on healthcare.gov.

As an aside, I am not without prior medical conditions. None of them fell into the pre-existing condition bucket but I did have to explain the situations in detail when I applied for coverage and note the last treatment for said medical conditions. Some of these were long ago and some much more recent. My wife had similar situations in her medical past. The point I'm making is we didn't have the picture-perfect bill of health that some people say is needed to obtain private/individual insurance.

Until my current scenario falls apart I will continue to believe DW and I have made the right decision. Only time will tell.

 

[audreyh1]

Many people here bought their Jan 1, 2014 insurance directly (a.k.a. "off exchange"), and not through any public exchange. Unless you qualify for a tax subsidy, there is little incentive to go through healthcare.gov website as it just adds a layer of complexity and potential delay. There are additional HI plans available that are not available through the exchange, but these are still ACA-compliant policies for 2014.

We were making comparisons with older non-ACA compliant policies and the new ACA compliant policies when we said that for some of us the new compliant policies were cheaper and so we are dropping our old policy even though it is grandfathered. This had nothing to do with whether it was bought directly or through a public exchange.

Anyone concerned about pre-existing conditions, etc., and without health insurance, well this is the moment they've been waiting for, as policies for Jan 1, 2014 or later cannot be denied due to pre-existing conditions.

Some of us who went through medical underwriting in the olden days were denied individual policies due to some obscure issue. This forced us to go on the expensive state exchange if we wished to preserve health insurance for pre-existing conditions or else accept some type of waiver. Fortunately that medical underwriting chapter ends Jan 1, and it's hard to see how that underwriting genie could ever be put back in the bottle (knock on wood!).

 

[bamsphd]

I sounds like you won under the previous system. You got into a risk group that could exclude people with pre-existing conditions, or that wanted to have babies, both by rejecting such applicants, and by imposing waiting periods on those they let in. I can easily believe that your insurance company would want to keep the business of people in that group. Instead of the grandfathered plan route, it sounds like your insurance company thinks at most minor tweaks will be required to make your particular plan PPACA compliant since the plan was already pretty close to PPACA standards because of your state's regulations.

You should probably keep that plan and consider yourself lucky. Let those of us just entering the "individual market" join risk groups that carry the cost of people with pre-existing conditions, or that want to have babies. The PPACA rules will now protect you from things like lifetime caps, will limit the percentage of your premium dollar you insurance company can spend on "overhead," and will prevent your insurance company from declining to renew your policy in the future if you get some expensive condition. If the PPACA works out as hoped, your local emergency rooms will not be getting as many charity cases in the future which should improve the cost and quality of emergency room care in your area compared to what it would otherwise have been. You should probably also hope your plan has been closed to new members, since that will tend to keep premiums lower for you.

He doesn't sell PPACA insurance so his plans can only be the old style.

He probably meant he does not sell "exchange" plans. I believe that as of January 1st, 2014 all new plans will be PPACA plans, though not all PPACA compliant plans will be sold on the exchanges. In my state Anthem (BCBS) is currently the only company offering plans on the exchange for 2014. They also have non-exchange offerings for 2014 which cost more, but have a broader network of providers.

P.S.
Shortly before [mod edit to remove politics] 2008 I sought individual insurance and found that I could only join the state's high-risk pool because of a back injury in 2004. I have not had any back related medical expenses since then except over the counter NSAIDs, but the insurance companies did not want to touch me. That postponed my retirement until I was confident COBRA could bridge me to PPACA guaranteed issue plans.

As a retired software developer I'm very disgusted with the implementation of Healthcare.gov. However, I still love the PPACA.

 

[FIRE'd@51]

An important consideration in comparing non-exchange plans with exchange plans is the doctors and hospitals you are allowed to use. So far, most of the comparison has been focused on the premium. But is it exactly the same insurance? It is my understanding that many of the networks of healthcare providers contained in the policies sold on the exchanges are narrower than those sold outside of the exchanges, even though both are ACA compliant. What good is a cheaper policy if it doesn't allow you to use the doctors and hospitals you currently use and want to use in the future? Unless both plans have the same network of healthcare providers, it's an apples vs oranges comparison.

 

[nvestysly]

An important consideration in comparing non-exchange plans with exchange plans is the doctors and hospitals you are allowed to use. So far, most of the comparison has been focused on the premium. But is it exactly the same insurance? It is my understanding that many of the networks of healthcare providers contained in the policies sold on the exchanges are narrower than those sold outside of the exchanges, even though both are ACA compliant. What good is a cheaper policy if it doesn't allow you to use the doctors and hospitals you currently use and want to use in the future? Unless both plans have the same network of healthcare providers, it's an apples vs oranges comparison.

Thank you for reinforcing that point. For instance my non-exchange plan allows me to see almost any doctor I choose. There are some limitations to the network and to the negotiated fee for different areas but anything I pay goes toward my deductible so it's not a bad choice for me. Several similar exchange plans I reviewed indicated anything out of network is for emergency only.

I've not found any plans that compare directly with mine. In some ways the new plans are better, particularly for somebody who has been unable to obtan insurance in the past. As the PPACA regulations are incorporated into the exchange plans insurers are finding ways to narrow the available network to keep costs down. Consequently, it is an apples and oranges comparison as you said. My plan may not be right for others but I think it's a very good choice for DW and me. I intend to keep it as long as possible.

I think it remains true that many people are eligible for non-exchange plans and they may find it to their liking. If they simply thought they were ineligible for non-exchange plans and didn't take time to investigate they might be missing an opportunity.

P.S. I tried to change the title of this thread but apparently the edit was not successful.

 

[ziggy29]

I just had my last $320 debited for our temporary health insurance policy for the two of us for December. Next month, assuming I get the bill and can pay it any time soon, it will be $112 (based on the income estimates I provided in my application) for myself, and DW is being covered by a Gold-level group plan by our church.

One size definitely does not fit all when it comes to the impact on health insurance costs in household finances.

 

[audreyh1]

Right now in Texas, I have not seen differences between the on-exchange or off-exchange ACA plans - no differences in pricing nor in networks. That's comparing the two main providers in my county. However, I could see how that might change in the future. We will be focusing on whatever gives us the most extensive/best provider network and higher deductibles to save on premiums.

There are a few more ACA plans available off-exchange in my county - a third provider is available that has no plans on the exchange, but offers plans otherwise compliant with the ACA. They just chose not to offer exchange plans at this time. A few insurance companies have chosen to do this in certain markets at first. And the plan we each signed up for is clearly marked "off exchange" even though the plan name/number, terms, and network is identical to one offered on the exchange.

 

[AllDone]

The easiest way to find out whether your provider is taking a plan, is to ask the provider. The medical group that we use sent out a letter listing which ACA plans they were taking this year. My experience in the past as both a provider and a consumer of medical care is that this will change from year to year anyway.

I'm with bamsphd. I'd still be dragging my sorry you-know-what to a job without the ACA. I've seen people with seemingly minor conditions be refused insurance. ERs do not provide "free" care. Last year I might have been successful applying for individual insurance. This year, simply due to aging and a previously undiagnosed congenital condition, I might have been left without insurance. My entirely healthy BIL has a common congenital heart valve deformity and has been paying through the nose for a high risk pool policy. Bad stuff happens. Next year you might be diagnosed with multiple myeloma, rheumatoid arthritis, or a cancer and bye-bye cheap, underwritten plan.

 

[ziggy29]

Next year you might be diagnosed with multiple myeloma, rheumatoid arthritis, or a cancer and bye-bye cheap, underwritten plan.

No, not as long as the group your individual plan is a part of remains in existence and as long as you keep making payments (and don't commit fraud in your claims). As long as that is the case, existing law still prohibits insurers from selectively non-renewing "sick" people who develop expensive conditions. (Yes, if enough people in the group get too sick and expensive, the insurer can drop the entire group, but no one can be singled out for being sick.)

 

[ERhoosier]

Most states will not escape this Exchange network shuffle unscathed. It appears Texas provider networks are NOT all going to be the same for Exchange vs non-Exchange Plans for same carrier (e.g. Texas Oncology, a major cancer group, NOT joining any Exchange Plans).

Texas Doctors, Hospitals Don't Know If They're In Or Out Of Obamacare Plans - Kaiser Health News

 

[AllDone]

Nothing prevents the insurance companies from raising the premiums on their underwritten insurance.

In 2006 one of my patients was diagnosed with multiple myeloma (10-15 year life expectancy, but uncurable). A year or two later the premiums for the small business she worked for were raised so high that they had to drop health insurance. She was unable to get insurance on her own. She had also had asthma since childhood -- no cigarettes ever -- and when she had an asthma attack, she refused to go to the ER. She knew that ER care was not free and she was a widow on a tight budget who always paid her bills. When her daughter stopped by the next morning to pick her up to bring her to my office, she was dead in her bed. Of. Asthma. I think of her whenever I hear poisonous things said about the ACA. She was born a citizen, took care of her health, tried hard to buy private insurance, worked full-time and paid her bills, so she was allowed to die of a treatable problem. Had she lived four years longer or become sick enough to be declared disabled, she would have qualified for Medicare.

I understand that some very lucky people (so far!) are loosing decent, cheap insurance and that some more people are loosing crappy, cheap insurance. However, the old system was broken. According to the Robert Woods Johnson Foundation at least 1/3 of people who are uninsured have not been allowed to buy insurance. Many of them, like my BIL, are completely healthy. As a result, people are forced to work for large corporations in order to maintain insurance for themselves or family members when they would rather change jobs, work for a small company, start a business of their own, or even, RETIRE. Others choose to take their chances and risk their financial futures by going without insurance. I know a lot of people who fall into all of those categories

There are those who claim that the uninsured are non-citizens, too lazy too work, too lazy or cheap to purchase insurance, and that anybody can get free care at an ER. I know plenty of people for whom none of that is true and so do you.

 

[ziggy29]

Most states will not escape this Exchange network shuffle unscathed. It appears Texas provider networks are NOT all going to be the same for Exchange vs non-Exchange Plans for same carrier (e.g. Texas Oncology, a major cancer group, NOT joining any Exchange Plans).

Texas Doctors, Hospitals Don't Know If They're In Or Out Of Obamacare Plans - Kaiser Health News

Straight from the horse's mouth, Texas Oncology (in a later press release) says they have not decided:

Texas Oncology Addresses Misstatement by Sen. Ted Cruz

We have made no decision regarding participation in the marketplace, because it is not clear how the new plans will cover cancer treatment, together with related care that our patients need. We also have concerns about parts of the law that could put patients at significant financial risk.


We ... explained that we have not completed our assessment of the plans and no decision has been made.

As far as cancer treatment in Texas goes, it does appear that MD Anderson will be in network for the Exchange-based BCBS TX plans, which may not be a big consolation if you are too far from Houston.

 

[audreyh1]

As far as cancer treatment in Texas goes, it does appear that MD Anderson will be in network for the Exchange-based BCBS TX plans, which may not be a big consolation if you are too far from Houston.

People go to MD Anderson from all across the state. A neighbor was there recently even though we are far.

 

[travelover]

No, not as long as the group your individual plan is a part of remains in existence and as long as you keep making payments (and don't commit fraud in your claims)........

I think some of the abuse was defining that "fraud" as not reporting a pimple on your butt when you were 15 years old.

 

[aja8888]

As far as cancer treatment in Texas goes, it does appear that MD Anderson will be in network for the Exchange-based BCBS TX plans, which may not be a big consolation if you are too far from Houston.

My BIL from North Carolina is at M.D. Anderson today and will be all week. Who says people don't travel far to go to that excellent facility?