Speaking of ACA

[AnonEMouse]

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Originally Posted by aaronc879 What exactly qualifies as a "pre-exisiting condition"? I would thingk pretty much everyone over 40 has something that could be considered a pre-existing condition.

Birth. bada-bing (Thursday is joke day, right?)

No one really knows what's going to happen to ACA. The best you can do is call your representatives and give them your opinion. Worrying about it isn't going to change anything.

Seems like threads like these are just to commiserate. That's well and good, but stokes unnecessary anxiety I think.

An "alternatives to health insurance" thread might be more interesting. Something like the "baguette" plan for retirement.

[MRG]

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Originally Posted by Spock That is the first thing that needs to be fixed in true health insurance reform: 1 published price per procedure regardless of who pays. The provider can charge whatever they want, they just have to publish that price. The consumer can then choose who they want to provide the service.

We have a provider in our area who is posting their prices for common procedures and tests. I'd seen a price of ~$350 for an MRI on their website. My insurance paid a couple grand for my last one.

It's absolutely insane how badly our system is broken and yet no one is saying to fix it. While ACA is a great start, the problem is greed and ignorance.

[ShokWaveRider]

I honestly do not blame folk who do not get a subsidy for complaining about the ridiculous costs of healthcare. ~$20k a year plus high deductibles is daylight robbery. This is just another example of Insurance companies pushing the limits of what they can get away with to maximize their profits at the expense of those who in theory have the money to pay them.

This is why we need a system that does not allow them to do so. I look at it as their way of funneling money to lobbyists at the expense of those who have no choice but to pay them for healthcare insurance that is poor at best. Not the Healthcare itself being poor, such as the coverage restrictions, absorbent premiums, copays, co-insurance and deductibles.

[FreeBear]

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Originally Posted by Spock . The insurance market place is still a competitive market from private insurance companies. Overtime, subsidies will trash the market just like they have education loans and everything else that is made artificially cheap. Since insurance company profits are essentially capped under ACA it will take longer for subsidies to skew the market because "creative accounting" would have to be created in parallel to hide the profits from rate increases.

I think this is true, but let's not forget that "subsidies" have been around much longer than ACA, but in the form of employer subsidized HI. One poster child for this is Cadillac PPO HI through megacorp. Maybe big-gov. has the same, but I don't have any experience with it.

My friends from megacorp have absolutely no idea of the full price (let alone true cost) of health insurance because their employer pays most of the burden. Furthermore, none of these friends fully realize that their Cadillac PPO in NOT available at any price, at any deductible level (metal level), on the individual market, at least in this area. The health provider networks are no where near as extensive, even if can even find an individual PPO plan.

A buddy of mine complains about dropping $8K/yr for 3 people for his Cadillac retiree PPO through megacorp. I just laugh and say that my ACA rack rate is over $12K/yr for only 2 people and $15K/yr deductibles on HMO with 2-3 tier hospitals. He's got not idea how good he has it.

To be fair, I'm not complaining. ACA is a retirement enabler and saver for us, at least until something better comes along or we both stumble into Medicare. Now, back to living my life in retirement. I'm not going to wring my hands waiting for the next tragedy.

[CRLLS]

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Originally Posted by orchid55 We are in our early 60s and have a non-subsidized ACA policy. The premium is 17k and the deductible is $6,700 per person. We have found that the negotiated discount for prescriptions is higher than the GoodRX rate. We are still using our long term PCP even though he is out of network. He gives us a 70% discount for being "uninsured" which is higher than the 60% discount we received from BCBS when he was in- network. My point is that we have not found the negotiated discounts to be very valuable.

There is a down side to working with your out of network Dr, and Rx plans like GoodRX outside your insurance. That is that what you do pay out of pocket is not applied toward your deductible. It should be IMO.

ACA has its good points and its bad points in my experience. I would welcome some sort of compromise. I have very low expectations that this will occur.

[FreeBear]

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Originally Posted by Aerides Remember though, pre-ACA on the free market (non-employer healthcare, truly individuals going and buying policies), there were many other limits, not just "pre-existing". A lot of policies denied many things that are now guaranteed under the aca law. Essentially the policy market was flush with low cost low risk plans (low risk for the insurers), granted to low consumers of healthcare. Everyone else had to wing it or stay employed. A lot of folks that thought they had decent, affordable coverage, really had swiss-cheese plans that fell apart after a major claim. So comparing costs of the prior environment is still kinda apples and oranges.

For anyone forgetting about HI in the "good old days", take a long look at even current short term health insurance plans, which are all NOT ACA compliant. The only good news is that they can be cheap.

The bad new? Everything else, including our favorite friends preexisting condition restrictions and underwriting. Need drugs of ANY kind?? Nothing covered, nada... Get sick during a coverage term (limited to 6 months in my state), well, the insurance company can deny coverage renewal at the end of the term.

[ShokWaveRider]

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Originally Posted by ziggy29 So, in other words, survive just long enough for you to benefit from it, until you're 65, then go away as soon as you no longer need it since you don't want to pay for it any more? Do I have that right?

With the sheer lack of action from those who can actually do something about HC in the USA, do you honestly blame this attitude?

At the end of the day it boils down to everyone for themselves, the current systems encourages it. Medicare is not cheap, but at least it is predictable.

[Mtmingus]

Do we need congress on this or the Supreme Court would rule?

[NW-Bound]

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Originally Posted by ShokWaveRider ... Medicare is not cheap, but at least it is predictable.

Actually, Medicare is VERY cheap, compared to unsubsidized ACA and what employers pay for their employees.

And if you consider that Medicare covers people who are a lot older and sicker than people on ACA and younger workers, Medicare is a heck of a steal.

See following post by FreeBear, which I fully agree with.

Quote:

Originally Posted by FreeBear I think this is true, but let's not forget that "subsidies" have been around much longer than ACA, but in the form of employer subsidized HI. One poster child for this is Cadillac PPO HI through megacorp. Maybe big-gov. has the same, but I don't have any experience with it. My friends from megacorp have absolutely no idea of the full price (let alone true cost) of health insurance because their employer pays most of the burden. Furthermore, none of these friends fully realize that their Cadillac PPO in NOT available at any price, at any deductible level (metal level), on the individual market, at least in this area. The health provider networks are no where near as extensive, even if can even find an individual PPO plan. A buddy of mine complains about dropping $8K/yr for 3 people for his Cadillac retiree PPO through megacorp. I just laugh and say that my ACA rack rate is over $12K/yr for only 2 people and $15K/yr deductibles on HMO with 2-3 tier hospitals. He's got not idea how good he has it. To be fair, I'm not complaining. ACA is a retirement enabler and saver for us, at least until something better comes along or we both stumble into Medicare. Now, back to living my life in retirement. I'm not going to wring my hands waiting for the next tragedy.

[jimbee]

Quote:

Originally Posted by ShokWaveRider I honestly do not blame folk who do not get a subsidy for complaining about the ridiculous costs of healthcare. ~$20k a year plus high deductibles is daylight robbery. This is just another example of Insurance companies pushing the limits of what they can get away with to maximize their profits at the expense of those who in theory have the money to pay them. This is why we need a system that does not allow them to do so. I look at it as their way of funneling money to lobbyists at the expense of those who have no choice but to pay them for healthcare insurance that is poor at best. Not the Healthcare itself being poor, such as the coverage restrictions, absorbent premiums, copays, co-insurance and deductibles.

Health insurance company profits are not the reason health insurance is expensive. Check the 80/20 rule explanation on this page. https://www.healthcare.gov/health-ca...s/rate-review/

[24601NoMore]

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Originally Posted by jimbee Health insurance company profits are not the reason health insurance is expensive. Check the 80/20 rule explanation on this page. https://www.healthcare.gov/health-ca...s/rate-review/

LOL..that's like saying Blue Cross Blue Shield is a "not for profit" (which they claim to be, but of course are not really)..all a HC company has to do is juggle around some internal accounting and <poof>..meet the 80/20 (or, in BCBS's case "not for profit") requirement.

I don't think there's much debate that HC companies are swimming in record profits - disclosed or otherwise.

[jimbee]

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Originally Posted by 24601NoMore LOL..that's like saying Blue Cross Blue Shield is a "not for profit" (which they claim to be, but of course are not really)..all a HC company has to do is juggle around some internal accounting and <poof>..meet the 80/20 (or, in BCBS's case "not for profit") requirement. I don't think there's much debate that HC companies are swimming in record profits - disclosed or otherwise.

If you have any actual evidence to refute my comment, I am ready to learn.

[24601NoMore]

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Originally Posted by jimbee If you have any actual evidence to refute my comment, I am ready to learn.

From the "Profitability of Health Insurance Providers" written by the Council of Economic Advisers in March, 2018..

Since ACA implementation on January 1, 2014, health insurance stocks outperformed the S&P 500 by 106 percent. (Me - Since stock prices are usually a direct reflection of profits and/or expected future profits - ie: price to earnings, outperforming the S&P by basically 2X since the ACA was passed is reflective of high profits and/or expected future high profits..hard to ignore the direct correlation - the stocks did not do anywhere near that well and basically tracked the S&P prior to passage of the ACA). Insurers remaining in the individual and small group markets seem to have recently accounted for ACA regulations and an older, more costly risk pool than they expected by charging higher premiums that have largely been covered by federal government premium subsidies. (Me - great if you get a subsidy..but if you have to pay the "higher premium" that is not subsidized..not so great, obviously)..Stable year-over-year enrollment,despite large premium increases suggests a distorted market that involves large transfers from taxpayers to insurers.

[jimbee]

Quote:

Originally Posted by 24601NoMore From the "Profitability of Health Insurance Providers" written by the Council of Economic Advisers in March, 2018.. Since ACA implementation on January 1, 2014, health insurance stocks outperformed the S&P 500 by 106 percent. (Me - Since stock prices are usually a direct reflection of profits and/or expected future profits - ie: price to earnings, outperforming the S&P by basically 2X since the ACA was passed is reflective of high profits and/or expected future high profits..hard to ignore the direct correlation - the stocks did not do anywhere near that well and basically tracked the S&P prior to passage of the ACA). Insurers remaining in the individual and small group markets seem to have recently accounted for ACA regulations and an older, more costly risk pool than they expected by charging higher premiums that have largely been covered by federal government premium subsidies. (Me - great if you get a subsidy..but if you have to pay the "higher premium" that is not subsidized..not so great, obviously)..Stable year-over-year enrollment,despite large premium increases suggests a distorted market that involves large transfers from taxpayers to insurers.

Thanks for the report. Looks like all of the meat is in the references, and a lot of the reference URLs are broken. The executive summary is light on actual data.

My statement was that insurance profits are not the cause of high insurance premiums. Using the example I quoted from ShokWaveRider, and applying the 80/20 rule of the ACA, a ~$20,000 annual premium would be ~$16,000 removing insurance company expenses and profits. People saying that $20,000 is too expensive probably wouldn't consider $16,000 cheap.

[NW-Bound]

Yet, there are areas that some years had only a single insurer signing up to provide ACA coverage. Phoenix was one of them.

Why are insurers so reluctant to compete, even though the government provides the backstop for them? I could not get an answer, when researching the Web on this.

And because the law requires them to pay out 80% of the premium as benefits, if insurers are eliminated then the premium would drop to 80% of its level now. A savings of 20% is nothing to sneer at, but the premium would not drop to 1/2 or 1/3 as some people might expect.

Funny thing is people always look elsewhere to place the blame. My nephew who is a hospital pharmacist had nothing but bad words for health insurers, the last time I talked to him. Insurers are no saints, but then hospitals are likely worse culprits, in my view.


PS. Cross-posted with jimbee above.

[24601NoMore]

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Originally Posted by jimbee Thanks for the report. Looks like all of the meat is in the references, and a lot of the reference URLs are broken. The executive summary is light on actual data. My statement was that insurance profits are not the cause of high insurance premiums. Using the example I quoted from ShokWaveRider, and applying the 80/20 rule of the ACA, a ~$20,000 annual premium would be ~$16,000 removing insurance company expenses and profits. People saying that $20,000 is too expensive probably wouldn't consider $16,000 cheap.

Not sure I follow the logic..profits are at all time highs, regardless of the 80/20 rule.

Personally, I (as well as many others who have commented over time) don't believe for a second that most HC insurers are truly only making 20% or less on their premiums. Smart accountants always find a way to make it APPEAR that a company is making a smaller profit than they actually are. I don't have the hard data at my fingertips to prove it (although with enough time and effort, I'm pretty confident I could find examples), but the anecdotal evidence is plentiful - just witness Amazon and the fact they didn't pay corporate taxes for years now because their reported "profits" were either zero or close to it..and we all know Amazon basically prints money. Otherwise, Bezos wouldn't be the richest guy in the universe. Sounds like you don't think the HC companies are playing that game..but I sure do. And the general market must agree, because their stocks are on average up > 100% more than the S&P since the ACA was passed..the only bright spot is that my HC mutual fund is doing well as a result..and outpacing my S&P500 index fund by a LOT..

[NW-Bound]

Stock valuation is based on earnings.

If company A makes 5% profit, while company B makes 10% profit with the same sales, company B will be valued at 2x as much, roughly speaking.

Amazon's valuation is sky high, because people expect it to grow and grow, like Jack's bean stalk. But if you add up all the gross sales that Amazon makes, it pales besides the total sales of Walmart, Costco, Target, etc... Amazon does not have that big a gross sales, let alone profit.

In other words, Amazon is highly valued. Actually it is overvalued with respect to its sales and profits.

[jimbee]

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Originally Posted by 24601NoMore Not sure I follow the logic..profits are at all time highs, regardless of the 80/20 rule.

I'm saying that even without the profit, as defined by the 80/20 rule, health insurance is expensive. Therefore, profit is not the reason, at least not the main reason, it is expensive.

Quote:

Originally Posted by 24601NoMore Personally, I (as well as many others who have commented over time) don't believe for a second that most HC insurers are truly only making 20% or less on their premiums. Smart accountants always find a way to make it APPEAR that a company is making a smaller profit than they actually are. I don't have the hard data at my fingertips to prove it (although with enough time and effort, I'm pretty confident I could find examples), but the anecdotal evidence is plentiful - just witness Amazon and the fact they didn't pay corporate taxes for years now because their reported "profits" were either zero or close to it..and we all know Amazon basically prints money. Otherwise, Bezos wouldn't be the richest guy in the universe. Sounds like you don't think the HC companies are playing that game..but I sure do. And the general market must agree, because their stocks are on average up > 100% more than the S&P since the ACA was passed..the only bright spot is that my HC mutual fund is doing well as a result..and outpacing my S&P500 index fund by a LOT..

Ok, profits are at an all time high. Cut ACA premiums in half, and I bet most people still won't consider them cheap. (unsubsidized premiums)

[NW-Bound]

Quote:

Originally Posted by jimbee I'm saying that even without the profit, as defined by the 80/20 rule, health insurance is expensive. Therefore, profit is not the reason, at least not the main reason, it is expensive...

+1

The law says that for every $1 that an insurance company brings in as premium, it has to pay out $0.80 as benefit coverage.

That means that if the insurance paid its employees nothing, and incurred absolutely no cost in its business, it would make 20% profit.

If we eliminate that 20% profit and use it to reduce the premium by 20%, it is still expensive! You will pay $16,000/year in premium instead of $20,000/year. It's still not cheap.

It has been estimated that the cost of managing Medicare is something like 10% of the benefit payout. So, eliminate the private insurance of ACA and let the government run it, we will get a savings of around 10%.

By the way, United Healthcare shows a profit-to-sales of about 5%. That's a lot better than Walmart at 2.5%. Hence, United is valued higher than Walmart, proportionally to the gross sales.


PS. I would think it is not easy for an insurance company to cheat the book on premium brought in, and benefits paid out to doctors and hospitals.

PPS. Is 5% profit of United Healthcare excessive? For comparison, Intel profit is 9%, and Apple is 6%.

[copyright1997reloaded]

This is another of those no-win threads that sometimes pop up on ER.org and is especially emotional because many here are beneficiaries of ACA subsidies (while at the same time having large retirement portfolios).

Nothing in life is free. There is a cost to having preexisting condition coverage. There is a cost to having community ratings (or a lowest to highest age scale that doesn't reflect cost differentials), and there is a cost to having plans with tons of coverage items beyond catastrophic coverage.
http://www.early-retirement.org/sk/f.../separator.gif
All one has to do is to look at one of the states (for example NY) which even pre-ACA had some/most of these features (e.g. community rated).

Way back in 2009 when I retired I looked at health plans in NY State which was community rated, guaranteed issue, no-preexisting condition checks. For a family of three (two adults, one child), I was looking at $25K or more annually for coverage.

Here's the net: Those of you who are getting discounted ACA coverage are doing so on the backs of young healthy individuals and the US taxpayer. Your subsidized costs do not come close to reflecting the actuarial costs (age adjusted) for your plan.

Many here want to blame the insurance companies. While I am not a fan of them, I seriously doubt that is the magical fix to the problem. We have a country of overweight and in general unhealthy people and a system that encourages bad health decisions, along with highly paid doctors and other hospital administrators (and insurance companies). That is why it is possible to go to other countries (e.g. Poland or wherever) and pay "full boat" and yet pay less for medical treatment.