Nice summary from Ways and Means on proposed changes to ACA released today...

[samclem]

This doesn't make sense to me. Historically, a high risk pool was for folks who were denied insurance because they had a pre-existing condition.

So the idea of high risk pools to me means bringing back medical underwriting.

If it's for folks who simply couldn't afford insurance, they wouldn't be using the term "high risk".

If it's because their premiums are way higher because "they are expensive to treat" then it means medical underwriting has returned in some form.

I'm also not sure what this "high risk pool" discussion is about. Every source I've read says medical underwriting (for the purposes of writing/declining coverage at all, or for establishing rates) is still prohibited.

There's $100B set aside to go to the states and this is apparently to be used for high-risk pools and other steps designed to "stabilize the market." One guess of mine, I have not read this anywhere is that, if states determine that a small population of high-utilization insureds is destabilizing the market, the state can use the money to establish a pool for some type of re-insurance or to directly pay for the care of these individuals. If that's what it is then it's a return to the "risk corridors" and bailing out of insurance companies who are participating in this program.

$100B ain't a lot of money in this particular game. If it is supposed to be used to keep things running in the event the adverse selection/death spiral accelerates from its present state, the money will be used up very quickly.

If anyone knows more about the "high risk pools" envisioned under the AHCA, please chime in.

 

[audreyh1]

I'm also not sure what this "high risk pool" discussion is about. Every source I've read says medical underwriting (for the purposes of writing/declining coverage at all, or for establishing rates) is still prohibited.
There's $100B set aside to go to the states and this is apparently to be used for high-risk pools and other steps designed to "stabilize the market." One guess of mine, I have not read this anywhere is that, if states determine that a small population of high-utilization insureds is destabilizing the market, the state can use the money to establish a pool for some type of re-insurance or to directly pay for the care of these individuals. If that's what it is then it's a return to the "risk corridors" and bailing out of insurance companies who are participating in this program.
If anyone knows more about the "high risk pools" envisioned under the AHCA, please chime in.

House Speaker Ryan seems to be the one who keeps bringing up setting aside funds for state high risk pools whenever he presents the current GOP proposed ACA replacement. I'll link as soon as I run across it again.

 

[explanade]

And that's $100 billion over 10 years, not per year.

 

[pb4uski]

One of those things I find confusing is why so much effort is put into creating an individual insurance market that is highly segmented, pricing it with it such granularity, and allowing such easy opt-outs, while the two largest insured groups (3/4 of all population), which are much more effective at providing coverage, do just the opposite - no opt outs, one price for all. Medicare does have a little price variability, very little compared with the individual market. Both of those markets are heavily subsidized, but that doesn't affect the basic approach.

Individual insurance in Vermont has been similar to group coverage for many years now.... no underwriting even before ACA, uni-sex, no age ratings.... one price for all comers for a certain level of coverage/deductibles/co-pays... and it works pretty weil... our health insurance rates are high but still reasonable... ~ $440/month in 2017 for unsubsidized bronze level coverage.

One thing that as always bothered me is the spin that young people pay for old people... while it certainly can be viewed that way, it could also be viewed that young people overpay while they are young so they can underpay when they get old but that over their lifetime the cost evens out ... similar to permanent life insurance where someone pays more than term early to have the right to pay less than term later on.... similar concept.

 

[pb4uski]

I have always felt we should scrap employer based HI system.

Instead it should be replaced by one national market for all individuals/families. Individuals then have portable HI irrespective of employer.....

Totally agree... I wish there was the political courage for it to happen.

 

[samclem]

I have always felt we should scrap employer based HI system.

Totally agree... I wish there was the political courage for it to happen.

Also agree. It will be better for our economy in so many ways to get rid of this crazy form of compensation. We are making progress toward that.
1) Both the ACA and the AHCA provide a means for all individuals to buy insurance regardless of their health status, and with no underwriting for premiums. That's an essential preliminary step to eliminating employer-based coverage. As long as the individual market was capricious and opaque, employees were right to seek the protection offered by the group plans of their employers.
2) Next, we need to remove any compulsory insurance by employers: they can offer it if they want to offer it as part of their compensation package. The ACA went the opposite way, making employer-provided HI mandatory for employers with more than 50 employees. The AHCA reverses this--employers will be free to offer insurance or not (just as was the case before the ACA.)
3) Employees need to pay tax on the value of their employer-provided HI. It's compensation, after all.

There's no need to ban employer-provided coverage. Once the steps above are taken, the government will have removed all the hooks they put in place that caused this aberration of employer-provided HI to occur in the first place. Employees will prefer to receive the compensation as cash rather than this less-flexible form of compensation. But--the individual insurance market has got to work this time. If not, employers will continue to play the role of aggregators and group-purchasers because they'll add value by doing this--procuring something for employees that they can't get efficiently on their own.

 

[explanade]

Seems as unlikely as single payer.

Impose new taxes on over 100 million people? Which politician is going to do that?

They long ago stopped caring about doing what's best for the country, when doing so was in conflict with their electoral prospects.

 

[samclem]

Impose new taxes on over 100 million people? Which politician is going to do that?

They do it all the time. Probably the most practical way is to include it as part of a larger tax reform package, with other gains and losses to individuals. People don't pay "new taxes" and "old taxes"--they just pay taxes. If the bottom line comes out favorable, and it is explained well, that may be good enough.

 

[candrew]

Impose new taxes on over 100 million people?

We are already paying those taxes, only by different names in the form of premiums, deductibles, co-pays and other out of pocket expenses. In the neighborhood of 17% of GDP.

 

[Texas Proud]

In general, large employer group plans are "must insure", which means all employees must be covered, and charge one premium to all participants, without distinction to age or gender. There are many cases of married couples, working for different employers, both employers paying for family coverage.

Yea... and it is not a good position to be in 'charge' of the insurance when the young employees come in and complain about how expensive the insurance is (small employer) because there are a number of old fart that raise the rates for all... or one person's DW got cancer and the ins company had to pay out a boatload of money that one year and is looking at the group in a different light...

 

[Texas Proud]

Unfortunately, EVERYONE who pitched the so called AHCA NEVER talks about those who currently get a subsidy. A lot of us here. $4000 will do nothing towards my Annual Healthcare premiums of $15k.

Why don't they implement Phases 2 & 3 BEFORE Removing what we have now? Seems typical reverse logic to me. It seems this plan as it is today hurts those who need it most, and benefits those who need it less.

FACT (not Alternative ones) If you cannot afford the current premiums WITHOUT the current Subsidy/cost Sharing, and you are in say the $25k - $35k income bracket getting a decent subsidy. You will NEVER be able to afford the proposed Mythical "Cheaper" Plans with a $4000 Tax credit. My insurance would be $2500pm without the subsidy. It is just about affordable with it.

So what will happen? People will either go without, or opt for high deductible plans and use the emergency rooms. Very costly.

One other point HSA plans are only good for those who have money to put in an HSA plan to start with.

Is that just for you Or do you have a family? I would think that I would get 4 tax credits for the 4 people on my policy...

 

[Texas Proud]

. However, at least for COBRA everyone gets the same price regardless of age, which is why COBRA tends to be a great deal for older individuals and a horrible deal for the young.
.

Snip of your quote...

This is wrong... COBRA is not the same for everyone... the COBRA that is offered to you is based on what insurance you were getting from the company.... I had to provide the costs that were to be charged to anybody who elected to take it... and they are not the same an someone electing COBRA that had worked for a different company....

It is only the same because a company usually has a flat rate no matter what age you are... and COBRA is based on that rate....

 

[Sunset]

After reading this thread, I am more grateful than ever for having heavily-subsidized retiree HI through a former employer...

Some are not heavily subsidized, but from what I hear no Credits for anyone who could use an employer plan

Additionally it is really reducing the value of the retiree benefit, by some amount. If the Gov't gave free healthcare instead of credits to all other people, then it's easy to see they have just wiped out the retirement benefit and turned it into a tax

 

[Texas Proud]

My experience with a large employer was there was no age component in pricing - as a middle aged (older) employee with an even older husband, plus two kids - I paid the same as an employee 20 years younger than me - and his wife and 2 kids.

Smaller employers are another thing. I only worked for a smaller employer once in my career. They had a "rule" that if you could get insurance from a spouse's plan - you could *not* get it from work. This was challenged by a coworker who's spouse's plan charged full freight (no subsidy or discount) for spouse/children.

My DH worked mostly for smaller companies and often they gave a discount to the employee and charged full fare for family members - and the insurance was often pretty bad... fortunately for him I always had a good plan through my large employer.

Also, most employers have just one family rate... so if you have one child or 5 (like one of my coworkers did) you pay the same rate!!!

 

[Sunset]

Seems like they're going to try to get this through ASAP.

While there's been a lot of opposition to many of the terms expressed, including by House members and Senators, it looks like it will be put up to a vote with minimal or no modifications.

So not sure how much lobbying influence there will be.

Well, I can go to sleep tonight feeling happy and thankful that our wonderful leaders in Congress won't have to use whatever health care plan they enact.

 

[NW-Bound]

Some are not heavily subsidized, but from what I hear no Credits for anyone who could use an employer plan

Additionally it is really reducing the value of the retiree benefit, by some amount. If the Gov't gave free healthcare instead of credits to all other people, then it's easy to see they have just wiped out the retirement benefit and turned it into a tax

Funny how the law can turn winners into losers, and vice versa.

But then, what is new?

 

[Ronstar]

....3) Employees need to pay tax on the value of their employer-provided HI. It's compensation, after all....

I believe some employees already pay tax on their employer provided HI. S corp shareholder employees with over 2% stake in the company have the cost of their premiums included in their wages.

 

[ikubak]

Also, most employers have just one family rate... so if you have one child or 5 (like one of my coworkers did) you pay the same rate!!!

I've never understood the rationale behind a family of 3 paying the same amount as a family of 8. I always thought the idea was to charge based on how much risk the insurance company was taking.

 

[Winemaker]

Three things.

1. Whatever about one bottle of wine, I would dispute the generalization that the cost of goods sold in Canada is four times that in the US.

I have no firsthand knowledge of this higher expense, other than about 20 Canadian snowbirds making small talk.

 

[audreyh1]

I've never understood the rationale behind a family of 3 paying the same amount as a family of 8. I always thought the idea was to charge based on how much risk the insurance company was taking.

The employer has its own rationale. Simplifying benefit administration is probably a big one.

 

[Winemaker]

What do they do if they need health care while they're down in FL? Pay out of pocket or go back to Canada to use that health care system which they blame for higher prices?

Taking wine back to Canada may subject them to customs duties unless it's a couple of bottles?

Most purchase travel health insurance for their time in FL, and as I understand it, emergencies are covered, but non life threatening issues have to be dealt with in Canada.

 

[tfudtuckerpucker]

For any new health care proposal, I would like it to begin with "here is how we are going to reduce health care costs in the US from $10K/capita to ~$5K/capita, like the rest of the first world." And show your work.

 

[Pilot2013]

I've never understood the rationale behind a family of 3 paying the same amount as a family of 8. I always thought the idea was to charge based on how much risk the insurance company was taking.

A lot of companies are self insured, and only have "companies" to administer there claims, etc. How they choose to manage their company and business, is their business, no?

And HI from your company is a BENEFIT, not compensation. Why all the trying to tax and redistribute so that ANOTHER person can benefit with lower HI premium and RE? Just plan accordingly, it doesn't have to be someone else's job to help with another ability to ER.

I know these won't be welcome thoughts on an ER board. And I am also looking to ER and not work until I am nearly dead, but I guess just like being the first to get through college, the first to.... well, you get the picture, even though my family is not wealthy and I was born with a PLASTIC spoon. I don't want everyone else helping me to ER against their will.

 

[simple girl]

I'm also not sure what this "high risk pool" discussion is about. Every source I've read says medical underwriting (for the purposes of writing/declining coverage at all, or for establishing rates) is still prohibited.

There's $100B set aside to go to the states and this is apparently to be used for high-risk pools and other steps designed to "stabilize the market." One guess of mine, I have not read this anywhere is that, if states determine that a small population of high-utilization insureds is destabilizing the market, the state can use the money to establish a pool for some type of re-insurance or to directly pay for the care of these individuals. If that's what it is then it's a return to the "risk corridors" and bailing out of insurance companies who are participating in this program.

$100B ain't a lot of money in this particular game. If it is supposed to be used to keep things running in the event the adverse selection/death spiral accelerates from its present state, the money will be used up very quickly.

If anyone knows more about the "high risk pools" envisioned under the AHCA, please chime in.

Under the section titled "high risk pools" at this link (Compare Proposals to Replace The Affordable Care Act | The Henry J. Kaiser Family Foundation) it states:

States may use Innovation and Stability Program grants to fund high-risk pools, and for other purposes

Yes, it is my understanding that medical underwriting is still prohibited - for now.

However the AHCA is establishing these grants to fund high-risk pools. The answer as to why they are doing that is not clear from anything I have read yet. All speculation. However, if you watch Ryan's interviews/speeches you will see that he is a proponent of bringing them back, and the AHCA is just the beginning of a 3 step plan. So, this is why many are concerned.

 

[bamsphd]

As I understand it, from the employer's perspective there are age rating differences in premiums. I know that is true in the small group market. Many large companies "self insure" only hiring insurance companies to "administer" their plans, in which case age rating is a mute point. However, at least for COBRA everyone gets the same price regardless of age, which is why COBRA tends to be a great deal for older individuals and a horrible deal for the young.

My intent was to say that as I understand it COBRA is never age rated. Not that there was some fixed national COBRA price for everyone.

Snip of your quote...

This is wrong... COBRA is not the same for everyone... the COBRA that is offered to you is based on what insurance you were getting from the company.... I had to provide the costs that were to be charged to anybody who elected to take it... and they are not the same an someone electing COBRA that had worked for a different company....

It is only the same because a company usually has a flat rate no matter what age you are... and COBRA is based on that rate....

The company I worked for actually offered a cafeteria plan of benefits and we could choose from multiple different insurance plans. Each plan had a different cafeteria price, and each plan had a different COBRA price. However, the COBRA prices were not AGE RATED. Somebody leaving the company at age 27 needed to pay the exact same price as someone leaving the company at age 64 assuming they both selected the same plan. So COBRA was a great deal for the 64 year old and a horrible deal for the 27 year old unless the 27 year old could not get other insurance (a pre-ACA issue).

However, you are correct that COBRA rates are supposed to be based on the company's price for insurance. So if the company is paying different rates for different employees their COBRA rates should be different.