Aetna pulling out of ACA

[Mulligan]

I read some more articles in Sunday paper today about companies pulling out of exchange but still offering off exchange policies, with implication by articles they were ducking people with more claims that purchase through exchange. Interestingly I read something that I had not known before. Washington DC and Vermont are the only 2 areas in US that have mandated insurance companies cannot offer off exchange plans if they do not offer exchange programs also.


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[explanade]

I don't understand why exchange plans would draw more claims than off-exchange ones, unless the subsidies made it easier for people to use services since not only their premiums but their deductibles are subsidized.

Maybe that's what the insurers are seeing and they're cherry-picking, even though you'd think the exchange would have way more enrollees, not just because of the subsidies but all the publicity funnels people into signing up through the exchanges.

 

[Mulligan]

Well we know one thing...Insurers have more than a few bean counters hired. And I will take a wild guess they have seen a strong pattern developing. We certainly are not seeing many articles about insurers pulling out of off exchange markets while staying in the exchange markets of that state, that is for sure... If they have, I have missed every article, ha!


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[explanade]

But it can't be just about collecting premiums and not paying out claims for the off-exchange plans vs. the exchange plans.

They have to pay out at least 85% of premiums in claims.

So does that mean on the exchanges they're paying out like 90 or 95% in claims?

Someone posted that the one leading exchange insurer in FL was doing well, paying out 87% but still making almost a $500 million profit.

 

[FUEGO]

Are the premiums the same for the on-exchange and off-exchange policies (assuming it's the same policy coverage)?

 

[socca]

I don't understand why exchange plans would draw more claims than off-exchange ones...

On-exchange plans - attractive to people who qualify for subsidies (MAGI < cutoff; may or may not have high net worth)

Off-exchange plans - suitable (but not necessarily attractive) for people who don't qualify for subsidies (MAGI >= cutoff; may or may not have high net worth)

In general, are people with MAGI >= cutoff less likely to file claims than the others? An insurer who drops on-exchange plans but keeps identical off-exchange plans predicts YES. It would be interesting to look at the actuarial data that supports this prediction.

 

[explanade]

Well there's no more underwriting right?

So you'd think insurers would gradually get rid of those well-paid actuaries.

 

[meierlde]

Actually studies have shown that more affluent folks tend to be healthier. Thus since no subsidy folks tend to be more affluent, it is at least possible that they make fewer claims in general.

 

[MBSC]

Here is a map indicating the number of 2017 on-exchange carriers by location based on current information. The small gray area in AZ represents no exchange carriers for Pinal County but the AZ DOI and HHS are working to get Blue Cross back in the county.

http://www.nytimes.com/2016/08/20/u...ountry-only-one-insurer-will-remain.html?_r=0

 

[ivinsfan]

Actually studies have shown that more affluent folks tend to be healthier. Thus since no subsidy folks tend to be more affluent, it is at least possible that they make fewer claims in general.

And most likely have had continuing access to health care. So perhaps less likely to have long term untreated issues which can be very pricey. Also more likely to buy a plan a with higher deductible which is less exposure for the company. They just break it down to on exchange and off exchange and don't say what plans people are buying.

 

[travelover]

And most likely have had continuing access to health care. So perhaps less likely to have long term untreated issues which can be very pricey. Also more likely to buy a plan a with higher deductible which is less exposure for the company. They just break it down to on exchange and off exchange and don't say what plans people are buying.

Sounds right. Exchange people are more likely to have a backlog of needed medical attention. On the flip side hospitals should have fewer uncompensated treatments.


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[athena53]

On the flip side hospitals should have fewer uncompensated treatments.

Yeah, that was the plan. Anyone know if this is actually happening? Hospitals have been complaining for years about the costs of uncompensated care. I'm not sure it's been mitigated if many people are thrown into plans with high deductibles they can't afford. A family with a couple of kids who are active in sports can run up huge out-of-pocket expenses in any given year.

 

[MRG]

Well we know one thing...Insurers have more than a few bean counters hired. And I will take a wild guess they have seen a strong pattern developing. We certainly are not seeing many articles about insurers pulling out of off exchange markets while staying in the exchange markets of that state, that is for sure... If they have, I have missed every article, ha!


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+1
There's nothing insurance just does, it's always backed by data.

I recall insurance companies having all kinds of elaborate processes in place, when asked why. They always had financial reasons to support the process.

 

[MichaelB]

When an insurer discontinues all offerings in the individual market, it must wait 5 years to re-enter. (reference here). The announcements by Aetna and UHC, and the earlier one by BCBS Texas, all leave them plenty of wiggle room. They can leave parts of the marketplace right now, wait for someone else to pick up the tab, then return when costs have stabilized at a lower level.

It's not clear if there is a health difference between on or off exchange users. The Commonwealth Fund believes sicker people may use off-exchange policies (here). One thing is clear - insurance companies have found a way to continue their practice of denying coverage for some people with pre-existing conditions.

 

[FUEGO]

Here is a map indicating the number of 2017 on-exchange carriers by location based on current information. The small gray area in AZ represents no exchange carriers for Pinal County but the AZ DOI and HHS are working to get Blue Cross back in the county.

http://www.nytimes.com/2016/08/20/u...ountry-only-one-insurer-will-remain.html?_r=0

Thanks for sharing that map. I find myself in one of the purple states with just one carrier (Blue Cross I assume). On the bright side, it won't take me long to pick an insurer come open enrollment.

The optimist in me says "hmmm, 1 competitor. I bet some innovator is eyeing this market with little competition and thinking about how to make billions of $ and/or provide better care for less".

 

[photoguy]

But it can't be just about collecting premiums and not paying out claims for the off-exchange plans vs. the exchange plans.

They have to pay out at least 85% of premiums in claims.

So does that mean on the exchanges they're paying out like 90 or 95% in claims?

Someone posted that the one leading exchange insurer in FL was doing well, paying out 87% but still making almost a $500 million profit.

I was on the exchange for the last half of 2014 and ended up getting a check back because they collected too much in premiums. So some must be doing well.

 

[pb4uski]

....Washington DC and Vermont are the only 2 areas in US that have mandated insurance companies cannot offer off exchange plans if they do not offer exchange programs also. ..

Actually, Vermont it is a bit different that what you describe... there are NO off-exchange plans... all individual health insurance is sold through the exchange, Vermont Health Connect and you cannot buy an individual health insurance policy directly from the insurer... believe me, I have tried (although there are only two insurers).

Also, no underwriting (even before ACA) and no age-rating... essentially, the individual market is like a big group.

 

[Mulligan]

Actually, Vermont it is a bit different that what you describe... there are NO off-exchange plans... all individual health insurance is sold through the exchange, Vermont Health Connect and you cannot buy an individual health insurance policy directly from the insurer... believe me, I have tried (although there are only two insurers).



Also, no underwriting (even before ACA) and no age-rating... essentially, the individual market is like a big group.

Would make sense...I was just parroting paper. I think they were just being brief to stay on topic about the insurance company's being able to chose who they were targeting. Or maybe they didnt know that either!


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[explanade]

The price of an Epipen just went from $100 to $400. This is a life saving emergency medication. It costs a few dollars to make. When asked why, the company gave gobbletygook for an answer.

Mylan, the company making the Epipen, is under fire from Congress. Epipen is now over $600.

Apparently some reporter showed the increases in the price of Epipen with the increase in the compensation of its executives, including the CEO Heather Bresch:

L'Aquila after the earthquake: Why flags do not fly - BBC News


CNBC was showing an old interview with Bresch when she was criticizing Martin Skureli for hiking up the price of that pill.

Meanwhile Skureli apparently defended Mylan, saying they don't make that much money.


CNBC had on a Harvard Law professor who said that she was making a big mistake, that she should know better as the daughter of WV Senator Joe Manchin.

This guy said that under Bresch, Mylan, which primarily makes generic drugs, saw sales losses in all their other products so they raised the price of Epipen to compensate, to hold up the sagging drug price of the stock.

[mod edit]

 

[MichaelB]

Mylan, the company making the Epipen, is under fire from Congress. Epipen is now over $600.

Apparently some reporter showed the increases in the price of Epipen with the increase in the compensation of its executives, including the CEO Heather Bresch:

L'Aquila after the earthquake: Why flags do not fly - BBC News


CNBC was showing an old interview with Bresch when she was criticizing Martin Skureli for hiking up the price of that pill.

Meanwhile Skureli apparently defended Mylan, saying they don't make that much money.


CNBC had on a Harvard Law professor who said that she was making a big mistake, that she should know better as the daughter of WV Senator Joe Manchin.

This guy said that under Bresch, Mylan, which primarily makes generic drugs, saw sales losses in all their other products so they raised the price of Epipen to compensate, to hold up the sagging drug price of the stock.

[mod edit]

Pharmaceutical companies have been pricing aggressively for decades and making their executives and investors very wealthy. This is certainly nothing new. Like overall healthcare costs, however, they have reached a point where the total cost is just so high, it is now unaffordable.

The US really has no mechanism to control pricing by pharmaceutical companies.

 

[explanade]

Well apparently the federal govt. still buys or pays for over half the prescription drugs in the country.

So they could have some leverage but they're not using it.

 

[MichaelB]

Well apparently the federal govt. still buys or pays for over half the prescription drugs in the country.

So they could have some leverage but they're not using it.

When Medicare Plan D was passed in 2003 it prohibited CMS from negotiating prices with pharmaceutical companies. So, both Medicare nor Medicaid must, by law, pay the asking price.

 

[pb4uski]

Now that sounds like a law that needs to be changed.... or if it is to remain effectively a monopoly, then regulated like utilities are.

 

[MichaelB]

Now that sounds like a law that needs to be changed.... .

Maybe someday it will. In the meantime, though, it's probably a topic we want to keep at arms length here in the forum, as it gets political and partisan very quickly - and that's a call for bacon.

 

[Sue J]

Are the premiums the same for the on-exchange and off-exchange policies (assuming it's the same policy coverage)?

In my area, northeast Ohio, the prices were the same on and off the exchange. For some insurers the plans were named the same thing, with the same plan numbers but the exchange plans had a few added on letters or a suffix. Then for other insurers you could find comparable plans but the exchange policies had smaller networks.

Last year we had 22 policies offered through probably 6 or 7 insurers. We really only considered 3 of those offering maybe 8 plans and some of those were the same plan but with added dental and vision. I'm interested in who will be offering plans this year. We are with our 3rd insurer in 3 years but we are liking this years plan and our new doctors, so far.


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