What a surprise... my health insurance provider dropping out!

[DawgMan]

It's Ground Hog Day again and I just got notice from my new/replacement 2017 Obamacare provider (after a 50% premium increase from 2016 and worse coverage) that they are dropping out as a provider in 2018. I'm still 2 - 3 yrs from RE with 2 almost graduated college kids left on plan, but these notices just piss me off!!

Someone help me understand something about all this healthcare noise. I have been self-employed for 29 yrs so I am accustomed to shopping my healthcare plan over the years, but like most people who had to convert to Obamacare, I have only seen my premiums skyrocket with reduced coverage.

I'm trying to get my arms around the big picture and understand why there are not more people screaming. It feels like fuzzy math when I google stats, but from what I can see, you got about 326M US citizens... 50M Medicare, 20M Obamacare/Medicaid, and 20M uninsured?? That leaves 236M on employer plans?? How are the same issues plaguing those of us on Obamacare not hitting the employers/employees with the same relative impact? Someone explain to me how the employer plans are minimizing the issues here. It seems like there should be a revolt from at least half of the country. Ok, my rant has ended

 

[DektolMan]

Same here in CT as we are down to 2 insures and they both might leave, will find out in Sept. Like you we were self employed for 40 years, always shopped plans and choose the risk level I was comfortable with. We were forced onto Obamacare and like you we saw higher premiums and deductibles. How the hell was this ever affordable.

I have 3 years, DW 4, till Medicare. Looks like I might have to go shopping for some type of plan to the time we hit 65.

 

[savory]

Same here in CT as we are down to 2 insures and they both might leave, will find out in Sept. Like you we were self employed for 40 years, always shopped plans and choose the risk level I was comfortable with. We were forced onto Obamacare and like you we saw higher premiums and deductibles. How the hell was this ever affordable.

I have 3 years, DW 4, till Medicare. Looks like I might have to go shopping for some type of plan to the time we hit 65.

Interesting that Obamacare is the stated problem and Medicare, the other gov't program is the solution. Seems it should not be too much of a reach to fix this. I hope we get the right DC partnerships to reach a satisfactory approach.

 

[easysurfer]

Haven't received a letter about my health insurance provider dropping out, but read to expect about a 40% increase in premium in 2018 for where I'm at.

 

[DawgMan]

I know there is a religious type plan (name escapes me right now) that I have heard some rolling the dice with. I believe there are certain restrictions (i.e. if you are in a car accident and have been drinking it may not be covered), but I heard the premiums are a good bit lower and it qualifies with the government to avoid the "no coverage" tax. For the early retiree, the issue becomes filling the gap until Medicare. Has anyone found any associations you can join (kind of like a credit union) where you can get better policies??

 

[Aerides]

It does seem off balance that the exchange pools and costs go up exponentially, while these same insurers manage large MC pools with no noise. What... so employer plans up 3% while ACA goes up 30%?

I think non-employee group plans like credit unions, chambers, etc., went out the door with ACA but will follow in case others have thoughts.

 

[Carpediem]

I know there is a religious type plan (name escapes me right now) that I have heard some rolling the dice with.

Liberty HealthShare is one of those you're referring to. From what I understand, they are the least restrictive when it comes to meeting their requirements to join.

 

[ncbill]

lost mine (UHC) last year, currently with BC/BS.

the above resulted in a 60% premium increase from 2016 to 2017.

fortunately, BC/BS has backed off on its projected 25% increase for next year, now projecting 15% increase.

of course, those percentages are just averages...

ironically, I could buy to a short-term plan (have to medically qualify) from my 2016 insurer for a fraction of the price.

EDIT: there are many religious-based health share plans that are compliant with the ACA.

just know that in addition to meeting their religious criteria, at least one plan is very restrictive on health conditions, even weight.

i.e. not only do fatties like me have to pay more monthly, but are also assigned a health coach, and if deemed not sufficiently compliant with their weight reduction plan, sayonara.

 

[UtahSkier]

Someone help me understand something about all this healthcare noise.

Healthcare pricing is based on pools. Called risk pools. Basically, everyone in a pool shares the cost of healthcare for that pool plus a premium to the insurer for managing the pool.

Before Obamacare, you had a large number of people who couldn't get coverage (pre-existing condition) or whose treatment was very expensive.

Obamacare gives those people coverage generally at the same rate as you pay. There costs go down and your costs go up.


So, all these previously uninsurable individuals are in the non-employer risk pools which are generally smaller than the employer pools and sicker (more expensive to treat).

To make things worse, the Obamacare risk pools are segmented by county. This means the pools are pretty small. These small pools have no buying power and the providers can pretty much charge higher prices. Prices I pay for simple lab work are nearly double when I switched from my grand fathered plan to an Obamacare plan.

Add to the small risk pools multiple insurers. A market with 2 insurers has to split an already small population reducing buying power even more. And then, there is the risk of "Hot Potato".

This is my term for when a small plan gets a really expensive member. All the members of that pool for that insurer have to pay a premium to support the costs of all members. That expensive member's will necessarily raise premiums for all members. Members will price shop and switch plans. This will have the effect of further raising premiums as the number of members in that pool decline.

The employer based risk pools are generally insulated from all of this. Their population is larger and they do not have to support really sick, unemployed people.

 

[Carpediem]

Excellent summary, UtahSkier. Thank you!

 

[Jerry1]

The employer based risk pools are generally insulated from all of this. Their population is larger and they do not have to support really sick, unemployed people.

Not sure of all the workings of the insurance pools but I think your summary is pretty much on target. However, one of the things driving cost increases is the government subsidy and the unknown risk around it in the current political climate. Bottom line is that most of this increase is an insurance issue and not a cost of healthcare issue. Healthcare cost is going up, but no where near the percentages the individual market is experiencing.

On the employer risk pool comment - I believe an insured employer has pretty much the same risk as the individual market. They may even be in the same pool. Statistically though, they're just as likely to have a very sick individual.

The reason most employers don't have the same issue is that they're self insured. Therefore, they've already accepted the risk of their population and have for years/decades. They pay actual medical expenses and an administrative fee for handling the claims processing and medical administration.

 

[flyingaway]

My opinion is that when Obama care started, many previously uninsured sick people got in and got medical services, which caused huge loss for the insurance companies. However, once that period passed, the insurance market should stabilize. This is similar to a company's group insurance for the small part, and to the government medicare for the large part.

 

[whatnot]

What UtahSkier said. Now add the fact that individuals do not face a penalty to get health insurance, a lot of young and healthy people will not sign up for healthcare.
So insurance companies have to raise their rates if the pool of people do not include younger and healthier populations.
Now if the young and healthy end up in a car accident or with a serious illness, the ER can not turn anyone away. The cost of healthcare can easily bankrupt an individual. Then the hospitals/taxpayers bear the cost of uncompensated care.
Bottom line a very difficult issue with no easy answers.

 

[GrayHare]

Though at a lower rate than individual plans, employer plans are likely rising in cost too. This may help explain why wages have been stagnant.

 

[Fermion]

Pretty much what everyone else said. Easy summary:

Two populations: Employed, Unemployed

Out of the Employed population, everyone gets healthcare and pays for it by a reduced salary. No real choice. Healthy people pay, sick people pay.

Out of the Unemployed population, a lot of the healthy people don't buy in. Sick people buy in.

Insurer looks at these two and thinks they can make more profit on the employed group. Go figure.

 

[bingybear]

Pretty much what everyone else said. Easy summary:

Two populations: Employed, Unemployed

Out of the Employed population, everyone gets healthcare and pays for it by a reduced salary. No real choice. Healthy people pay, sick people pay.

Out of the Unemployed population, a lot of the healthy people don't buy in. Sick people buy in.

Insurer looks at these two and thinks they can make more profit on the employed group. Go figure.

I only quoted one of several that gave good descriptions, but I think some over generalize.

Using this one..

Two populations: Employed, Unemployed

Really should count the Under Employed and Self Employed (without insurance options) People who can't get enough hours to qualify to get company insurance or work for themselves (sharing economy) may not have insurance available thru their companies.

People who work for companies with few enough employees that they are not required to (and don't ) provide insurance.

It is likely easier to analyze/estimate the risk of companies of people than those falling thru the cracks is a given county. It would be more interesting if the risk pools were shaken up differently.

 

[SecondCor521]

In addition to the reasons excellently explained by UtahSkier, I believe the following also contribute:

1. Every Obamacare plan must cover a number of MEC (minimum essential coverage) items. This means I, as a single 48-year-old male who has had a vasectomy, am covered for pregnancy benefits under my ACA plan. I have also never used drugs and never been drunk, yet I also am covered for opioid recovery treatment.

2. Obamacare limits the variance in premiums between young people and old people to less than the differences in cost by age. This effectively means that younger people are subsidizing older people.

 

[ExitLeft]

Insurers were expecting to receive subsidies if not enough healthy people joined the exchanges, but the subsidies were blocked by Rubio's provision...

Washington post, 12/14/15:
When the Obama administration was crafting Obamacare, it came up with a crony capitalist solution to entice reluctant insurers to join the exchanges. Many insurers worried that there would not be enough healthy people paying in to cover the costs of sick people. So the administration created a “risk corridor” program to help prop up insurers who lost money in the first three years of the law. Profitable insurers would pay some of those profits into a pool to help insurers who lost money. If the amount insurers lost exceeded what the companies paid in, the government would step in and make up the difference.

Calling this “a taxpayer-funded bailout for insurance companies,” Rubio last year quietly inserted language into the omnibus government spending bill that barred the Department of Health and Human Services from dipping into general funds to pay failing insurers. “While the Obama administration can still administer the risk-corridor program, for one year at least, they won’t be able to use taxpayer funds to bail out insurance companies,” Rubio said.

 

[MichaelB]