Affordable Care Act - need clarification from the insurance gurus

[txfireguy2003]

Lengthy thread, so I didn't read it all, but here's my understanding:

It's multifaceted actually. On one hand, there are millions of people who would not have been covered before, being added to the rolls. These are people who, due to serious health conditions, age, what have you, were previously considered uninsurable. Insurance companies hedge their bets. They figure you (and whatever group you're a member of) will pay more into the system in monthly premiums than they will have to pay out in medical bills. The guy with cancer, or heart conditions is just too risky in their eyes, and he'll only be paying for a few months or maybe a year before they have a major payout on him, and/or, he dies before he pays hundreds of thousands of dollars into their system, yet, they're still paying hundreds of thousands out. ACA doesn't allow them to exclude anyone, regardless of current health status, so they're going to raise their rates in order to offset the risk of the previously uninsured folks. On the other hand, you have the ACA's requirements to cover certain treatments that they normally might not, or would only cover on their higher priced plans. For example, (this is not necessarily policy, just an example) if Company ABC has three levels of coverage, levels 1, 2, and 3, and each level covers some of the same things but excludes certain things, they costs can be different for each level of coverage. For example, level 1 is a simple catastrophic care plan, it has a HIGH deductible, and only pays...let's say 50% of costs after you meet the deductible, and it doesn't cover many treatments, like say allergy shots, it costs $100/month. Level two has a moderate deductible, and covers 80% of costs after you meet the deductible, and most but not all treatments are covered, it costs $200/month. Level three is a full on, zero deductible, covers everything, no exclusions, you can even file for cosmetic surgery and get it paid for, and all you pay is a co-pay, it costs $500/month. Previously, you could choose to go with the cheaper option, with the knowledge that you might have to pay more for treatment, and certain treatments may not be covered at all. You could also choose the mid-grade plan and get coverage for most common treatments, and pay less out of pocket when you go to the doctor, but you're still going to have to pay a deductible, and it costs more per month, that's your choice. Finally, if you are wealthy, and tend to see a doctor a lot for whatever reason, you might choose the Cadillac plan, you'll be covered for everything, but you'll pay upfront. Now, under the ACA, that insurance company is no longer allowed to exclude any of those common treatments, and they are required to have reasonable deductibles, effectively meaning that they have to do away with level 1. So, if you're a level 1 customer, you either lose your coverage, or you have to upgrade to level 2, and pay more. Additionally, ACA may require coverage for things that level 2 didn't cover before, (for example, the birth control battle) so that's added to even the level 2 plans....yep, you guessed it, the company isn't going to give you more coverage without passing that cost on to you, whether you wanted that coverage or not. So now, the level 1 and 2 customers see their rates increase. But what about level 3 customers? They can keep their coverage, I guess, but since it's a Cadillac plan, they get to pay taxes on that money.

[Shane]

The ACA doesn't require policies to have reasonable deductibles. Obamacare policyholders have found that even after their premiums skyrocketed, they're co-pays and deductibles went way up too. Double whammy.

[bcmuzzy]

Insurance companies DO lose money, and insurance companies DO GO BROKE/BANKRUPT. Conseco is one that comes to mind.

I don't know enough of the details, but Mike D probably nailed it.

Maybe Conseco and other ins co. need to stop paying to name pro stadiums.

[Speedgoat]

Just wait until you see the cost of Medication increase. Spain, France, and other countries on the public healthcare option typically take 40%-50% of an individuals salary to apply towards health care. For any good the bill is doing, it is causing 3 times the damage in other areas.

[HeyMikey]

Following...........some good info/opinion here!

[Jerry H]

There is no way you can discuss this without bringing up politics.

That is the problem, the federal government is so involved in OUR daily lives that you can no longer separate the two.

BTW this whole thing was designed to put insurance companies out of business leaving US with no choice but to turn to the federal government for our health care.

[60 Deluxe]

What exactly are you wanting answered? Will premiums go up or what is the root cause for premiums going up?

Pretty complicated all the way around. In the exchange model, there are fewer differentiators between carriers. Essential health benefits baseline coverage types and coinsurance levels creating the metallic categories of coverage. Price (Risk Based) will be the biggest differentiator. The premium amounts may not be lower under exchanges, but depending on where one falls on the federal poverty level they could be subsidy eligible and their monthly out of pocket for premiums could be less.

Insurance carriers have made significant investments to become compliant with the new regs. Some have spent 500-600M over the last 2-3 years to get ready. There are more to the regs than just Exchanges; Admin Simp, MLR to name a few. They aren't charity organizations so it's likely the cost will be passed on to the consumers. The new regs are adding additional expense to the life cycle that don't do anything to treat a condition or illness.

Make sense?

Yes , your explanation makes sense from business perspective. Problem is that the act was intended to make health care a right for all whether or not it made business sense. Something had to be done to fix the system that was broken and almost certainly something will be done to fix this solution that is not workable. In the end there probably won't be insurance carriers or non-government health care providers. Your premium will show up as an additional 25% federal income tax.

[60 Deluxe]

I think I said pretty much the same thing, just with more and different (and maybe less clear) words.

The couple of surviving insurance companies will be private companies, but they'll have been bailed out by and controlled by the government. They'll be able to claim that it's still "private" insurance, but if the government calls all of the shots, what difference does it make if there are shareholders or not?

Fannie and Freddie come to mind?

[Boomerang]

They want to ad those for free and they don't have to pay for it subsidized by those who already pay...simple economics. You need to pay more for those who don't (technically they "pay" buy get a rebate based on income). Interesting how an actuary calculates risk based on income???

[profish2004]

This thread is not intended to start a political debate so please dont get it burnt.

I need help clarifying something. It is my understanding that the increase in insurance premiums are not because of the ACA but because more people are using their insurance and insurance companies are not making as much profit (lets face it - insuranbce companies dont lose money, it comes down to how much profit they lose or gain every year. I dont think one insurance company has ever gone out of business even in the worst year of natural disasters).

Others say ACA is causing it to increase. Is it because the companies are losing customers to the ACA pool of companies because they can now shop for better deals?

Can you explain?

if you are are watching the libtard media news channels please STOP! the kool aid is still being served.

[RiverRat1]

ACA is causing insurance prices to go up because it has 'upgraded' the kind of coverage everyone is supposed to have.

For example you now must insure your self against substance abuse (cocaine, meth and such) Never mind that you don't need that insurance - you must now carry it. Same with abortion insurance. Never mind that you are 60 years old and had a hysterectomy or that your a man - you must now carry abortion insurance.

That is the stuff considered an upgrade. Not all insurance plans covered that kind of stuff - they did not cover that so that the plans were cheaper and more people could afford to purchase their policies.

The idea of forcing coverage is that it puts more money into that kind of care in the hopes that it will lower the cost of that care. (abortions, substance abuse, pre-existing condition)

Texas and other states forced insurance to grant insurance to anyone that wanted to pay for the insurance - regardless of pre-existing. But that no longer matters.

So that is it in a nutshell as far as the increase in cost. As far as putting / forcing more people into insurance that did not have or could not afford - that has some impact. But for the most part their cost is covered with subsidies and they are forced to pay for the insurance.

Remember this is an insurance law - not health care. Obamacare will not lower the cost of healthcare. But will only guarantee a continuous increase in the cost.

But does ACA really cap (or did it lower the cap) on what doctors can charge for certain procedures? I heard this as well and that would surely make premiums go up.

[RiverRat1]

It costs more because the ACA requires insurance policies to pay for things that were not previously covered by just about all health insurance policies, most of which aren't needed or wanted by most people. Insurance companies of any type (health, homeowners, etc.) can not cover pre-existing conditions and remain in business, but Obamacare requires pre-existing conditions to be covered. The reason pre-existing conditions can't be covered is because if they were, then people could wait until their house was on fire before going out and buying a homeowners policy. We could wait until we were diagnosed with cancer before buying health insurance. If insurance covers pre-existing conditions, then nobody would waste money paying premiums until they actually needed to file a claim. The only way insurance works is when people chip in and pay premiums when there is a CHANCE they could have a loss. But if the only people paying premiums are the people who are CERTAIN to have a loss, then it all falls apart. There would not be enough people chipping in to help pay for other people's losses, so nobody could afford it.

That's what the ACA requires. BUT.....that's where the individual mandate comes in. The unconstitutional law requires us to buy a product, whether we want it or not. And we don't have any control over the price of it either. Because the ACA requires insurance policies to cover pre-existing conditions with NO LIFETIME LIMIT, the premiums have to be a lot higher in order for it to work. There are also requirements that policies have to provide maternity coverage and things like that for EVERYBODY, even people who have no need for that type of coverage.

It gets even better for younger people. These are the healthy people that rarely even go to the doctor. Many of them previously have chosen to not buy health insurance. But now they MUST buy a policy whether they want it or not. Insurance premiums are typically set based on rate classes or pools of people in similar circumstances that have similar things happening to them that might trigger insurance payments. So, before the ACA came along anyway, young healthy people that bought health insurance had premium costs that were far cheaper than the premiums for older, less healthy people that get sick and go to the doctor a lot more. This way, people are paying their own way more fairly. But under the ACA requirements, younger people are paying their normal premiums PLUS a bunch extra in order to pay for all the extra costs of insuring the older people's pre-existing conditions on an unlimited basis. Premiums for older people are still going to be much higher than they used to be, but they would be astronomically higher if the younger people weren't paying for a big part of it.

It all hinges on the individual mandate though. It should have been ruled unconstitutional, but it wasn't. But now the big worry is that the fine for not buying the unbelievably expensive insurance that people don't want is pretty cheap. Old and sick people who know they're gonna be going to lots of doctors' offices and hospitals are going to sign up. Young and healthy people are just going to pay the fine and do without insurance. That will mean that there won't be enough healthy people that never file a claim signing up to pay premiums to cover the expenses of the folks who need to go to the doctor. That's when insurance companies will start going broke, and guess who will bail them out because they're "too big to fail". Before long, most of them will be out of business and the few that remain will be basically government-owned enterprises. We'll pretty much end up with a single payer government health insurance system that the federal government will be in complete control of.

Won't that be fun? (It's almost as if somebody planned it to crash the system, huh?)

And this exact statement has been made since the very beginning, way before ACA became law. I just wish more people would have a brain that could remember things more than a day or two old.

A lot of people saw this coming a LONG time ago. Now it was just a lucky guess or happened for different reasons LOL

[Speedgoat]

And this exact statement has been made since the very beginning, way before ACA became law. I just wish more people would have a brain that could remember things more than a day or two old.

A lot of people saw this coming a LONG time ago. Now it was just a lucky guess or happened for different reasons LOL

The people that said it were ridiculed and called racist or elitist. Now see what we have is a law that was pushed in the night before anyone knew the consequences that would come. Minimal research was done.

[db@100]

Is it a pre existing condition when a woman goes to the doctor with a lump in her breast and finds out she now has breast cancer or is it a pre existing condition if, when at birth her parents do a gene test and find out she carries the breast cancer gene?

[rubydog]

And this exact statement has been made since the very beginning, way before ACA became law. I just wish more people would have a brain that could remember things more than a day or two old.

A lot of people saw this coming a LONG time ago. Now it was just a lucky guess or happened for different reasons LOL

Some of us went to schools to be educated in insurance and it's basis of operation. Along comes Obama and his ideals and he is smarter than the industry mathematicians, actuaries and underwriters. As the saying goes, he upset the apple cart.

I can say I told ya so but is is anybody outside these walls that vote really listening? I guess not, he got voted in a second term.