2016 Exchange Rates- OUCH

[MichaelB]

Percentage increases without any reference or framework to give them relevance are exciting to the media (and us) but of little benefit.

We know the average cost of healthcare in the US in 2014 from this source 2014 Employer Health Benefits Survey | The Henry J. Kaiser Family Foundation Last year (2014) large group policies for high deductible plans averaged $5.3K per individual and $15.4K for families. Increase that by 5% for 2015 and 2016 and this sets the baseline. Add the age differential and one can see how far from the average one is currently paying. Prices will trend toward this mean ($486 per month before age) in most major metropolitan areas for "average" policies. I would guess that the closer one's current premium is to this number the lower the expected increase for 2016.

 

[AllDone]

There's another, non-political analysis out this morning that looks pretty good in historical terms:

Avalere Health : Lowest-Cost Exchange Premiums Remain Competitive in 2016; Consumers may be able to keep increases small by selecting a low-cost silver option

 

[eta2020]

While I fully agree that US HC costs are far too high and do not consistently produce better outcomes than some other developed nations, quality in US is certainly not "very low". The wiki (1st) link you cite is of a 15 yrs old and highly suspect WHO ranking system. Can it be seriously argued that US HC system delivers inferior care to that of Greece, Cyprus, Dominica, etc. Or that UK HC system is also inferior to Greece

IMHO- A more relevant comparo is to current care given by some of the better facilities in Mexico. Some US insurers are already starting to cover care delivered there.
Health care, and patients, go south — to Mexico
I believe that as US HC costs continue to rise, this 'medical tourism' will grow as well. I have no problem with this so long as quality of actual care delivery (measured independently & objectively) meets reasonable standards and folks realize the possible pitfalls of seeking care outside their own nation.

US healthcare is good compared to lets say Brazil or Hungary but not compared to Advanced Economies. (France, Italy, Germany....)

But if you have huge sums of money it is probably best in the world. No surprise wealthy people from all around the world come to US for treatment.

Mirror, Mirror on the Wall, 2014 Update: How the U.S. Health Care System Compares Internationally - The Commonwealth Fund

 

[MichaelB]

The Commomwealth Fund is an excellent source of analysis of health care issues, but this international comparison is weak IMO.

- It is a ranking, not a scoring. The difference between one "place" and another is relevant but not included. Last does not mean bad.

- It includes access to healthcare more than once, over-weighting that aspect on it's scale.

- It includes lifestyle, which affects health but really is not a core part of the healthcare system.

In all, the scale tends to more heavily weight some aspects that we know are weakest in the US. In fact, in the core health measures, what they call "quality care", the US scores are in the middle. This becomes relevant because the ACA has focused heavily on access to care, and major inroads here should result in a substantial improvement in the US ranking. We shall see if TCF reflects this in their next update.

 

[eta2020]

In all, the scale tends to more heavily weight some aspects that we know are weakest in the US. In fact, in the core health measures, what they call "quality care", the US scores are in the middle. This becomes relevant because the ACA has focused heavily on access to care, and major inroads here should result in a substantial improvement in the US ranking. We shall see if TCF reflects this in their next update.

We are moving in a right direction.

In support of free_at_49 notice how we score on almost identical place in longevity as in tables for Health Care. So do many other countries (but certainly not all).

https://en.wikipedia.org/wiki/World_Health_Organization_ranking_of_health_systems_in_2000
https://en.wikipedia.org/wiki/List_of_countries_by_life_expectancy

It is very interesting is't it?

This is my last post on this "Hot Topic"

 

[marko]

I will just point out that if they get rid of the subsidies, the requirement to cover pregnancy for a 60 year old man will also go away. Premiums should go down then.

I don't see how there is ANY cost of covering a 60 y.o. man for pregnancy. So I don't see how that would affect the premiums.

Covering a 60 y.o. man against heart attack, sure, as there is an obvious cost and likelyhood.

 

[HFWR]

I, for one, am happy that pregnancy is rare in 60 yo men...

 

[samclem]

A minor suggested change, shown below:

We know the average cost of [-]healthcare[/-] private health insurance in the US in 2014 from this source 2014 Employer Health Benefits Survey | The Henry J. Kaiser Family Foundation

Total healthcare costs are higher than the costs of health insurance premiums (due to co-pays and other OOP costs).

Further, the cost of private insurance may differ considerably from the cost of public health care (which is not directly related to the issue under discussion, but just bears mentioning)

 

[Ian S]

Actually all the other regulation in the ACA will stay just no subsidy. The case is a narrow one. Now after this what may happen is another question. (Also High deductable cat plans will still be outlawed pending any changes in the law)

It may indeed be a narrow decision but the consequences are apt to be huge for everyone in the individual insurance market even those not getting subsidies. Many getting subsidies and who are healthy will opt to go uninsured and because the non-subsidized rates are so high, those opting out will likely be exempt from the tax penalty. Meanwhile, the sicker folks will hang onto their insurance and without the healthier folks, rates will increase, more folks will drop out, and the cycle will continue possibly becoming what's called a "death spiral." Insurers will pull out of those states most affected. More uninsured will show up in ER's and the hospitals will have to treat them. But the ACA reduced payments to hospitals under the reasonable assumption that there'd be far fewer uninsured going to ERs with the ACA in place. The reduced payments remain reduced even with the increase in costs for hospitals treating the uninsured. The worst hit hospitals may wind up closing. It's apt to be a disaster for many more than those getting subsidies in the affected states.

So glad I'll be going on Medicare next year. Unfortunately, I'm not sure even Medicare will escape fallout from any unraveling of the ACA.

 

[MichaelB]

A minor suggested change, shown below:

Total healthcare costs are higher than the costs of health insurance premiums (due to co-pays and other OOP costs).

Further, the cost of private insurance may differ considerably from the cost of public health care (which is not directly related to the issue under discussion, but just bears mentioning)

Valid point, your suggested change makes my post clearer. Thanks..

 

[samclem]

IF the Supreme Court agrees with King about the "four little words," and the subsidies are barred for federal exchanges, I think there's little doubt that many states will quickly work with the federal government to put their state logos on the federal website and do whatever cosmetic steps need to be done to satisfy the letter of the law--making the exchanges "theirs". Their residents will receive subsidies when they go to the exchanges.

Some states will not go along with this. Those presently insured through their employers would remain largely unaffected (except the employer mandate would go away, but most people who get insurance through their employers post ACA already got it that way pre-ACA), all insured through Medicare and Medicaid would remain unaffected. I'd imagine in these states a new market in "non-ACA compliant" high deductible policies would make it possible for many people now on the exchanges to remain insured at reasonable costs. But there will be a lot of people falling through the cracks (esp the sick). This will increase the costs and probably build pressure for those states to establish ACA exchanges or for establishment of an alternate framework from Washington that allows the federal money (paid in part by the residents of those states) to flow to those states and provide benefits. And that "alternate framework" might provide a vehicle for many state laboratories on ways to deliver high-quality care at lower costs. I doubt that anyone thinks the "old way" or ACA is optimum, so we agree there's room for improvement. We can bet Oregon will take a different road than Texas, and maybe we'll figure some things out that benefit everyone.

But we'll know soon if all this thought is wasted effort. Regardless of the result, I don't think there is cause for panic.

 

[InTheSticks]

Many getting subsidies and who are healthy will opt to go uninsured and because the non-subsidized rates are so high, those opting out will likely be exempt from the tax penalty.

I realize this is anecdotal, but here is an example of ACA not working. A friend of mine was complaining that his HI premium was going to increase from $400/month to $800/month in 2014. So he dropped his HI. He also mentioned that he had to pay a $900 penalty for 2014. With a 1% of income penalty, I estimate his MAGI at 90k. I have told him that the penalty will go up for the 2015 tax year. He was already aware of this. As background, He and his wife are self employed. They are both in their mid 50s. They are both pretty healthy and don't smoke.

He's in a bad spot income wise, too much for subsidies and too little for the premium to still be a significant part of his income.

I don't know what to tell my friend. I wish he and his wife would get HI. But, I can't be pushy about it. I just hope they don't get sick or injured.

Thanks for listening.

 

[utrecht]

. Many getting subsidies and who are healthy will opt to go uninsured and because the non-subsidized rates are so high, those opting out will likely be exempt from the tax penalty.

What makes you think those opting out will be exempt from a penalty? I doubt the law says you can opt out penalty free if your rates are too high.

 

[samclem]

I doubt the law says you can opt out penalty free if your rates are too high.

It kinda says that. From a CRS paper:

Certain other individuals (and their dependents) may be exempt from the penalty, including any individual whom the Secretary of HHS determines to have suffered a hardship with respect to the
capability to obtain coverage under a qualified health plan. In addition, individuals (and their dependents) whose household income is less than the filing threshold for federal income taxes for the applicable tax year will not be subject to a penalty, as well as those whose required
contribution for self-only coverage for a calendar year exceeds 8% of household income.11 After 2014, the 8% will be adjusted to reflect the excess rate of premium growth above the rate of
income growth for the period.12

And I vaguely recall there was another rationale that would eliminate penalties if the subsidies went away, but I can't point you to it.

 

[marko]

What makes you think those opting out will be exempt from a penalty? I doubt the law says you can opt out penalty free if your rates are too high.

I think the point was that the law would no longer be in effect.

 

[Ian S]

I realize this is anecdotal, but here is an example of ACA not working. A friend of mine was complaining that his HI premium was going to increase from $400/month to $800/month in 2014. So he dropped his HI. He also mentioned that he had to pay a $900 penalty for 2014. With a 1% of income penalty, I estimate his MAGI at 90k. I have told him that the penalty will go up for the 2015 tax year. He was already aware of this. As background, He and his wife are self employed. They are both in their mid 50s. They are both pretty healthy and don't smoke.

He's in a bad spot income wise, too much for subsidies and too little for the premium to still be a significant part of his income.

I don't know what to tell my friend. I wish he and his wife would get HI. But, I can't be pushy about it. I just hope they don't get sick or injured.

Thanks for listening.

Boy, that's taking a risk. Especially considering that for the self-employed, health insurance premiums are tax deductible so that $400 extra a month gets significantly reduced. Figure in the tax penalty for not having insurance and their net out of pocket looks even better with the insurance. If it were me, I'd do everything to squeeze out the extra bucks to be insured especially at that age when your odds of serious illness dramatically increase. I'd even consider diverting some retirement contributions into offsetting the insurance cost if I had to. I'd also look closely at what bronze plans are available to perhaps reduce the cost further.

 

[Ian S]

I doubt the law says you can opt out penalty free if your rates are too high.

Actually, it does. It sets a percentage of income threshold for the premium above which you wouldn't be liable for the penalty if you opted not to pay for insurance. Of course, very few were ever expected to get that exemption due to the subsidies but if they are gone, then lots more will be exempt from the penalty.

 

[InTheSticks]

Boy, that's taking a risk.

Ian, I agree. I forgot to add, she's in the health care industry.

I'd even consider diverting some retirement contributions

I don't know that they are making retirement contributions.

 

[AllDone]

I realize this is anecdotal, but here is an example of ACA not working. A friend of mine was complaining that his HI premium was going to increase from $400/month to $800/month in 2014. So he dropped his HI. He also mentioned that he had to pay a $900 penalty for 2014. With a 1% of income penalty, I estimate his MAGI at 90k. I have told him that the penalty will go up for the 2015 tax year. He was already aware of this. As background, He and his wife are self employed. They are both in their mid 50s. They are both pretty healthy and don't smoke.

I hope that they understand that there is no "free" medical care available through ERs. That is such a common misunderstanding, even for people who aren't political.

Your friends might be able to qualify for a catastrophic care policy despite their age as the rules have been loosened and if they have not shopped through their exchange (or the federal exchange), then they should. We got one of those letters the first year from our (then) insurance company about our soon to rise premium, but we said buh-bye!

 

[Texas Proud]

I think the point was that the law would no longer be in effect.

Why would you think that? They are just determining subsidies for some states... the rest of the law would still be the law...

 

[Texas Proud]

IF the Supreme Court agrees with King about the "four little words," and the subsidies are barred for federal exchanges, I think there's little doubt that many states will quickly work with the federal government to put their state logos on the federal website and do whatever cosmetic steps need to be done to satisfy the letter of the law--making the exchanges "theirs". Their residents will receive subsidies when they go to the exchanges.

Some states will not go along with this. Those presently insured through their employers would remain largely unaffected (except the employer mandate would go away, but most people who get insurance through their employers post ACA already got it that way pre-ACA), all insured through Medicare and Medicaid would remain unaffected. I'd imagine in these states a new market in "non-ACA compliant" high deductible policies would make it possible for many people now on the exchanges to remain insured at reasonable costs. But there will be a lot of people falling through the cracks (esp the sick). This will increase the costs and probably build pressure for those states to establish ACA exchanges or for establishment of an alternate framework from Washington that allows the federal money (paid in part by the residents of those states) to flow to those states and provide benefits. And that "alternate framework" might provide a vehicle for many state laboratories on ways to deliver high-quality care at lower costs. I doubt that anyone thinks the "old way" or ACA is optimum, so we agree there's room for improvement. We can bet Oregon will take a different road than Texas, and maybe we'll figure some things out that benefit everyone.

But we'll know soon if all this thought is wasted effort. Regardless of the result, I don't think there is cause for panic.

Just pointing out a flaw in this thinking...

I was reading that the states had a certain amount of time to establish their exchange and that time has past.. IOW, they cannot just label the Fed site theirs and get the subsidies.....

So, if they decide that the subsidies are not allowed in the states without exchanges there is nothing that can be done under current law.... they will have to pass something allowing them through the federal exchange or give the states more time to establish....

Just a question... does the state have to offer the increased medicaid if they establish an exchange? I thought that was one of the reasons some states did not go along...

 

[samclem]

I was reading that the states had a certain amount of time to establish their exchange and that time has past.. IOW, they cannot just label the Fed site theirs and get the subsidies.....

IIRC, the deadline was for the states to get federal >funding< to establish their exchanges. They can still set them up. It would be tougher in the 8 states that have passed laws expressly forbidding the state establishment of an exchange . . .

Anyway--we've seen many instances so far that demonstrate the executive branch has a great deal of "flexibility" in implementing the law. (employer mandate deadline moved, etc, etc). I think money would be found, there would be a tremendous desire to make that work.

Just a question... does the state have to offer the increased medicaid if they establish an exchange? I thought that was one of the reasons some states did not go along...

I'm pretty sure all the states that established exchanges also wanted the Medicaid expansion anyway, I don't recall anyone testing the waters on this. The SCOTUS decision was fairly explicit in saying the states couldn't be bludgeoned into accepting the Medicaid expansion. And we know, as a practical matter, that the subsidies can be de-linked from expanded Medicaid and made to work, as it's being done on the federal ACA exchanges in states without the expansion.

 

[Fermion]

We are WA state residents right now and so technically would not be directly affected by this since WA has a state run exchange.

Were I in a state using a federal exchange and denied a subsidy by this ruling, I would expect to be able to go without insurance with no penalty, since our MAGI would be $23k and 8% of that is $1840 (nobody will give us a year of ACA qualifying insurance for $150 a month for a mid 40s couple unsubsidized).

I would then have to think about how to beat the system in the event we had a medical issue. The current law allows you to enroll at any time if you change residency. Since we are traveling the country in our RV, we could technically change residency at any time just by driving to a new state and registering our vehicles, apply for a DL, stuff like that. I wouldn't do it for a broken leg, but maybe if one of us was facing 8 uninsured months in the hospital while we were waiting on a new open enrollment period...

Sounds messy. I just want to be able to buy a catastrophic policy and self insure for the small stuff (if all of the subsidized plans go away).

 

[AllDone]

Sounds messy. I just want to be able to buy a catastrophic policy and self insure for the small stuff (if all of the subsidized plans go away).

The tricky bit there is that without the ACA, if you develop a pre-existing condition like, say, "old age", your premiums even for catastrophic coverage go the roof again. I live in a very consumer oriented state, but for those who live in a more business oriented state, things can get dicey.

 

[Fermion]

The tricky bit there is that without the ACA, if you develop a pre-existing condition like, say, "old age", your premiums even for catastrophic coverage go the roof again. I live in a very consumer oriented state, but for those who live in a more business oriented state, things can get dicey.

True. That is why I said this was messy. No clear cut good choice for early retirees with pre-existing conditions if ACA goes away.

We currently do not have any existing medical conditions but I am sure there are people who have retired under ACA rules who do. I do not know what they would do.