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

[explanade]

This will be a good thing for many ERs. It's a challenge to maximize your benefit when the rules of the game keep changing, but I'm in favor of simplifying the product. I had worked out a plan to keep MAGI low and get insurance for less than 1200/year for a couple. If this new plan goes through, I can get a 7500 tax credit and then shop for whatever plan makes the most sense. I won't have to work at keeping my MAGI low. I'll be able to convert to Roth in the lowest tax brackets and reduce my exposure to RDMs later in life. This could be good.

But you assume premiums won't rise a lot more.

Insurers will be allowed to charge older insureds up to 5 times more than the youngest ones, compared to 3 times now.

Plus the penalty for not having continuous coverage doesn't seem to be much of a deterrent to free riding, not paying for insurance until needed. So as the rolls shrink from all young, healthy people not enrolling, premiums for older people go up even more.

 

[audreyh1]

It's section 133 of the Energy and Commerce Bill http://energycommerce.house.gov/sit...ocuments/Section-by-Section Summary_Final.pdf

That section doesn't say pre-existing conditions won't be covered. It just mentions the 30% surcharge.

Section – 133 Continuous Health Insurance Coverage Incentive
The continuous coverage incentive is designed to limit adverse selection in health care markets. Beginning in open enrollment for benefit year 2019, there will be a 12-month lookback period to determine if the applicant went longer than 63 days without continuous health insurance coverage. If the applicant had a lapse in coverage for greater than 63 days, issuers will assess a flat 30 percent late-enrollment surcharge on top of their base premium based on their decision to forgo coverage. This late-enrollment surcharge would be the same for all market entrants, regardless of health status, and discontinued after 12 months, incentivizing enrollees to remain covered. This process would being for special enrollment period applicants in benefit year 2018.

Sorry, DH had to run off, I'll get the reference as soon as I can.

It is possible he misinterpreted the pre-existing conditions not covered after lapse, because I haven't been able to find any reference to his comment. Or perhaps he read something that was published before yesterday's release, not realizing that it wasn't current.

OK - DH was reading a current 3/7 article, but it linked to a 1/24 article about pre-existing that is now out of date. http://time.com/money/4644137/obamacare-repeal-continuous-coverage-preexisting-conditions/

 

[MichaelB]

That section doesn't say pre-existing conditions won't be covered. It just mentions the 30% surcharge.

Sorry, DH had to run off, I'll get the reference as soon as I can.

Right. Neither of the bills proposes any change to coverage of preexisting conditions, guaranteed availability, coverage of adult children up to age 26, limits on out-of-pocket expense limits, prohibitions agains health status underwriting, elimination of lifetime and annual limits. Were these were forgotten, left for another time, or accepted as desirable requirements? My guess is they stay.

 

[LARS]

I would think you would have to spend at least $8,000 on premiums to get the $8,000 credit.

Someone posted that they would buy a high deductible plan and put the difference (of the $8,000) in a HSA.

Got to love the ER crowd: already scheming to maximize!

 

[Nature Lover]

I totally agree with GTFan & pb4uski -"there is no attempt to rein in HC costs in the new proposal which is by far the biggest issue here". All that is happening is that cost is being shifted away from the government and leaving more people without health insurance. NOBODY has proposed changes to lower the COST.

Count me in among those who are disappointed to see no cost control measures. If it were not for the huge cost increase, ACA would have been fine too.

+100 here. Just another case of kicking the can down the road. The real choice Congress will be making is whether to act quickly (and make a new [-]mess [/-]structure of winners/losers), or defer action now in order to work on a solution that actually lowers the cost of HC, and thus, costs of HI) and Medicare!). With today's politics, I expect they'll choose to act quickly if possible---because it solves a political problem----not because it solves the HC or HI cost problem.

Also, watch out for the medicaid/innovation funds....longer-term, these are clearly a target for reduction. Another new [-]mess[/-] set of winners/losers. Reducing the Federal contribution towards costs over time would certainly help Congress....but without lower HC costs, it will ultimately push a decision to the States/Local Govts to either tax more or deny care to the poor.

Getting costs down can be such a huge win, but Congress seems determined to ignore it.

 

[zedd]

Got to love the ER crowd: already scheming to maximize!

HEY! I resemble that remark. Oh, and get off my lawn

 

[Montecfo]

I'm not seeing anything in either bill that refers to purchasing policies across state lines. Am I missing it or is that something that would need to be handled in completely separate bills?

No, it is not there. This is intended to be a budget reconciliation bill. The competition issues will be in separate bills.

 

[SecondCor521]

I would think you would have to spend at least $8,000 on premiums to get the $8,000 credit.

Someone posted that they would buy a high deductible plan and put the difference (of the $8,000) in a HSA.

That was me. From the link in the OP:

"SECTION_15: REFUNDABLE TAX CREDIT FOR HEALTH INSURANCE
This section creates an advanceable, refundable tax credit for the purchase of state-approved, major medical health insurance and unsubsidized COBRA coverage."

I was reading the word refundable to mean that if you didn't use all of the credit to cover the cost of insurance, you would get the balance back as a tax refund.

That's similar to how it works with other refundable tax credits (such as the dependent tax credit - this year mine wipes out all of my tax liability and then some, which I'll be getting back). But you're right to point out there could be limitations.

 

[Fermion]

This is very interesting but I don't see how the new plan will work for some places like Alaska.

We were thinking of becoming Alaskan residents, taking our RV up there for a number of years but the insurance for a silver or bronze plan is insane. For it to be affordable to lowish income folks, the subsidies right now are on the order of $1500 a month for a couple around age 50. That is $18,000 a year in subsidies, now being replaced with $7,000. The $11,000 difference is just too much to handle, so we won't be moving there.

Now that is our situation, which is flexible. What about someone who is already in Alaska? Feel a bit sorry for them, hope they can find a job.

 

[Nature Lover]

Neither of the bills proposes any change to coverage of preexisting conditions, guaranteed availability, coverage of adult children up to age 26, limits on out-of-pocket expense limits, prohibitions agains health status underwriting, elimination of lifetime and annual limits. Were these were forgotten, left for another time, or accepted as desirable requirements? My guess is they stay.

I agree generally (I think there is a provision somewhere allowing some health status underwriting..in the form of higher premiums only..not denial of coverage). I think the big ticket items in the list became somewhat "untouchable" with all the public feedback. That being said, without changing these big cost provisions, then for all but the young and healthy participants, we might need to expect higher premiums...maybe much higher. That, combined with the lesser "subsidy" provided by the credits to many, means potentially more "personal responsibility" than people were already up in arms about. We'll have to see how the discussion progresses in DC.

 

[Ian S]

Right. Neither of the bills proposes any change to coverage of preexisting conditions, guaranteed availability, coverage of adult children up to age 26, limits on out-of-pocket expense limits, prohibitions agains health status underwriting, elimination of lifetime and annual limits. Were these were forgotten, left for another time, or accepted as desirable requirements? My guess is they stay.

I think the reason is that none of those items can be dealt with via reconciliation which only require 51 votes in the Senate but rather would have to overcome a filibuster i.e. get 60 votes which is unlikely to happen.

 

[daylatedollarshort]

We have a Bronze plan now. The catastrophic plans listed on the exchange site were not much less in premiums for our area compared to the Bronze plans. $8K subsidy wouldn't cover much unless the prices come down, which seems highly unlikely with the 3 to 1 age band limit being lifted. I don't see how switching to a catastrophic plan would make much of a difference for us going forward if this bill becomes law.

 

[NW-Bound]

This is very interesting but I don't see how the new plan will work for some places like Alaska.

We were thinking of becoming Alaskan residents, taking our RV up there for a number of years but the insurance for a silver or bronze plan is insane. For it to be affordable to lowish income folks, the subsidies right now are on the order of $1500 a month for a couple around age 50. That is $18,000 a year in subsidies, now being replaced with $7,000. The $11,000 difference is just too much to handle, so we won't be moving there.

Now that is our situation, which is flexible. What about someone who is already in Alaska? Feel a bit sorry for them, hope they can find a job.

Ah, you youngsters of 50 get off easy. Wait till you are older, and I am sure everybody wants to get older (as the alternative really sucks). I found what I posted a couple of months ago, on 12/3/2016 (it is faster than playing with healthcare.gov all over again to get the numbers).

The premium for a Silver plan for a couple of 60 is $44,808 in Anchorage!

Y'all think it is absurd? You have not seen anything yet. As I said, the number varies from place to place. If a cliff of $19,536 is bad, look at what I found in Anchorage. The following is for a couple of the age of 60.

Joint MAGI = $80,079, annual premium for Silver plan = $6,558 + $6,000 deductible
Joint MAGI = $80,080, annual premium for the same = $44,808 + $6,000 deductible

One dollar more in income, and you pay an additional $38,250 for insurance!

 

[MBSC]

I was quick to answer someone on this thread that basically, if passed as proposed, my read was that subsidies of ACA (nonMedicaid) are in place until 2020. So effectively no substantive change for 2017, 2018 and 2019.

I must say that today in the Press I've seen nothing confirming outright this view (just dates on various bits and bobs of ACA). Do others concur with this conclusion of plan as proposed?

The individual responsibility (your portion of the premium) was capped at 9.66% MAGI in 2016 and is capped at 9.69% in 2017 for all age ranges. During the 2018-2019 transition period, age bands will be added as shown in the chart on page 78. Persons over age 59 could have an individual responsibility up to 11.5% MAGI in 2018.

Silver Plan CSR for 2018-2019 is dependent on the outcome of the 'House v Burwell' case.

Regarding HSAs, I'm glad to see them considering HSA contributions which correlate with actual high deductible plans. I would also like to see HSAs available to users of any kind of policy, not just the defined HDHPs.

Currently even silver plans have huge deductibles and max out of pocket costs but are excluded from being HSA eligible due to having office visit co-pays or Rxs paid before the deductible is met.

I read the Ways and Means summary so if I missed that, let me know.

The qualifying criteria for an HSA eligible plan is not changed in this proposed bill.

 

[Hamlet]

This is very interesting but I don't see how the new plan will work for some places like Alaska.

We were thinking of becoming Alaskan residents, taking our RV up there for a number of years but the insurance for a silver or bronze plan is insane. For it to be affordable to lowish income folks, the subsidies right now are on the order of $1500 a month for a couple around age 50. That is $18,000 a year in subsidies, now being replaced with $7,000. The $11,000 difference is just too much to handle, so we won't be moving there.

Now that is our situation, which is flexible. What about someone who is already in Alaska? Feel a bit sorry for them, hope they can find a job.

Yup. The new subsidies are independent from the local cost of care, so people in high cost states are going to see dramatic sticker shock.

This seems more likely to end up in an insurance death spiral than the current ACA. The higher spread allowed for older folks, combined with the lower subsidy levels and modest penalty that you only pay if you get sick will make it much more likely for an older healthy person to try and run without insurance.

It's not clear to me that any insurance companies will be interested in entering a market with this setup unless they price for the worst case.

 

[Refresher]

The individual responsibility (your portion of the premium) was capped at 9.66% MAGI in 2016 and is capped at 9.69% in 2017 for all age ranges. During the 2018-2019 transition period, age bands will be added as shown in the chart on page 78. Persons over age 59 could have an individual responsibility up to 11.5% MAGI in 2018.

Silver Plan CSR for 2018-2019 is dependent on the outcome of the 'House v Burwell' case.


The qualifying criteria for an HSA eligible plan is not changed in this proposed bill.

How?
If your income is 15k a year and your premiums are 1k a month under the new plan with the 4k tax credit your paying 8k a year which is 53% of income. How does the 11.5% figure in?

If your income is 47K and your premiums minus credits are the same 8k then I see it closer to the that 11.5%

Or does it mean if your income is 15k the insurance companies must offer a plan for $5725 which would make your responsibility $1725 or 11.5%?

 

[Big_Hitter]

Got to love the ER crowd: already scheming to maximize!

hey at least that 10% tanning tax is gone

 

[Fermion]

It's not clear to me that any insurance companies will be interested in entering a market with this setup unless they price for the worst case.

It definitely will be interesting. We had insurance companies pulling out of markets where people were getting $15,000 or more of subsides if you include cost sharing. Exactly how fast are they going to run for the door when the subsidy drops to $6000?

 

[socca]

Back in the old days (before Obamacare), health insurance companies provided their policyholders with indemnification only against future adverse medical events. They worked aggressively to avoid covering existing medical conditions. I went through this medical underwriting process many times - unpleasant, to be sure, but I considered it a necessary evil in order to keep insurance premiums reasonable.

My personal preference would be to return to the old days, where health insurance companies sold only indemnification against future adverse medical events, and allow some other mechanism to help pay the medical cost of existing conditions. Insurance companies shouldn’t be allowed to deny all coverage to someone with existing conditions, but they should be allowed to exclude existing conditions from coverage and let some other mechanism help pay for them.

So, what might this other mechanism to help pay for existing conditions look like? Who would pay the taxes to provide this benefit? How would this program be administered? Would we need to create a new health care bureaucracy, or can an existing bureaucracy be adapted? I have no idea - I’m not an expert in health policy matters, just a guy trying to avoid being financially ruined by the American healthcare system.

 

[LARS]

Back in the old days (before Obamacare), health insurance companies provided their policyholders with indemnification only against future adverse medical events. They worked aggressively to avoid covering existing medical conditions. I went through this medical underwriting process many times - unpleasant, to be sure, but I considered it a necessary evil in order to keep insurance premiums reasonable.

My personal preference would be to return to the old days, where health insurance companies sold only indemnification against future adverse medical events, and allow some other mechanism to help pay the medical cost of existing conditions. Insurance companies shouldn’t be allowed to deny all coverage to someone with existing conditions, but they should be allowed to exclude existing conditions from coverage and let some other mechanism help pay for them.

So, what might this other mechanism to help pay for existing conditions look like? Who would pay the taxes to provide this benefit? How would this program be administered? Would we need to create a new health care bureaucracy, or can an existing bureaucracy be adapted? I have no idea - I’m not an expert in health policy matters, just a guy trying to avoid being financially ruined by the American healthcare system.

Well luckily very few seem to agree with you. And I say that as someone who had to jump through multiple state medical underwriting hoops to get HI pre ACA as we moved about the country in ER. And, I again say this as someone who is an incredibly light user of HI (knock on wood going forward).

 

[travelover]

........I have no idea - I’m not an expert in health policy matters, just a guy trying to avoid being financially ruined by the American healthcare system.

Yea, too bad no other developed countries have faced this problem and found a workable solution.

 

[Pilot2013]

Back in the old days (before Obamacare), health insurance companies provided their policyholders with indemnification only against future adverse medical events. They worked aggressively to avoid covering existing medical conditions. I went through this medical underwriting process many times - unpleasant, to be sure, but I considered it a necessary evil in order to keep insurance premiums reasonable.

My personal preference would be to return to the old days, where health insurance companies sold only indemnification against future adverse medical events, and allow some other mechanism to help pay the medical cost of existing conditions. Insurance companies shouldn’t be allowed to deny all coverage to someone with existing conditions, but they should be allowed to exclude existing conditions from coverage and let some other mechanism help pay for them.

So, what might this other mechanism to help pay for existing conditions look like? Who would pay the taxes to provide this benefit? How would this program be administered? Would we need to create a new health care bureaucracy, or can an existing bureaucracy be adapted? I have no idea - I’m not an expert in health policy matters, just a guy trying to avoid being financially ruined by the American healthcare system.

I am in agreement, mostly with the part about how I am not sure myself how to solve the COST issue, but I am convinced redistribution is not the way. Primarily because once it is in place (as we are seeing now) it is very hard to eliminate without someone being demonized, once we DO figure out the cost issue.

 

[exnavynuke]

Yea, too bad no other developed countries have faced this problem and found a workable solution.

Why travelover... that sounds suspiciously like sarcasm....

 

[Bryan Barnfellow]

"SECTION_15: REFUNDABLE TAX CREDIT FOR HEALTH INSURANCE
This section creates an advanceable, refundable tax credit for the purchase of state-approved, major medical health insurance and unsubsidized COBRA coverage. To be eligible, generally, an individual must not have access to government health insurance programs or an offer from any employer; and be a citizen, national or qualified alien of the United States, and not incarcerated. "

As usual, the 6-8 million of us (unrepresented) Americans living outside the US are out of sight and out of mind. We have to pay for Medicare while abroad but can't use it, and in some cases -- such as my own in Switzerland -- we have to pay fully out of pocket for our local health insurance. Mine and my wife's comes to close to the equivalent of $20,000 annually. I retain only a slim hope that we might be included in the tax credit section in the final version of the bill.

 

[bamsphd]

Did people really NOT ER before the ACA?

I tried and failed to get insurance at any price before the ACA. So I personally postponed ER until the Supreme Court upheld the ACA. Then I took Cobra followed by no-subsidy HSA qualified policies.

Lots of people ER'ed with retiree insurance (ex-Military, ex-Gov, ex-Union, ...). The minority without any pre-existing conditions sometimes risked (often in ignorance) having their insurance cancelled.

However, not many people voluntarily ERed if they knew they couldn't buy health insurance. Without insurance you don't get negotiated prices, without negotiated prices self insurance is problematic.