Heeeeeeere's Obamacare!

[Puppycow]

Here's a report that supports the idea that healthcare spending is concentrated amongst the sickest.

Shocking. Who would have thought?

I wonder if funeral spending is concentrated amongst the deadest.

 

[Trakar]

Kestrel and Trakar - if you don't mind sharing, what professions are you in? I recall that Kestrel has an association with the health industry, but I'm not sure what. I really only ask out of curiosity, so if you'd rather not disclose that, it's fine I'm a health actuary.

I am a retired software engineer. Healthcare is just an area of public policy that I find interesting.

I am not working in the field, but I do have interest in, and some basic understandings of, U.S. health care policies and practices. I'm sure Emily's Cat, working within the industry most impacted by such policies is much more up to speed and competent in the details of issues like the ACA than I am. Like most everyone else, however, I have my opinions and considerations.

 

[Kestrel]

The metal levels of ACA insurance plans are defined by Actuarial Value. A Bronze plan pays 60% of all medical bills injured by policy holders, Silver plans 70%, Gold plans 80% and Platinum plans 90%. But who verifies that the schedule of deductibles, copays and limits in each health plan actually produces these results?

 

[Emily's Cat]

I am a retired software engineer. Healthcare is just an area of public policy that I find interesting.

Well you've got a better handle on it than a lot of people!

 

[Emily's Cat]

I am not working in the field, but I do have interest in, and some basic understandings of, U.S. health care policies and practices. I'm sure Emily's Cat, working within the industry most impacted by such policies is much more up to speed and competent in the details of issues like the ACA than I am. Like most everyone else, however, I have my opinions and considerations.

Mmm... I'm knowledgeable about the parts that affect my company, and specifically the lines of business I support. There is a lot of stuff in ACA that is specific to Medicare or Medicaid, and I have very little knowledge of any of that. My knowledge on things relating to providers (I understand there isn't much) is very limited, as is what I know of ACOs. I know a pretty solid bit about the Individual & Family market, somewhat less about the Small Group market.

Honestly, the bill is just too big for me to try to be an expert about the whole thing.

 

[Emily's Cat]

The metal levels of ACA insurance plans are defined by Actuarial Value. A Bronze plan pays 60% of all medical bills injured by policy holders, Silver plans 70%, Gold plans 80% and Platinum plans 90%. But who verifies that the schedule of deductibles, copays and limits in each health plan actually produces these results?

CMS released an Actuarial Value calculator that we use. You input the benefit design, and it estimated what the expected percent of incurred costs will be.

We're not required to have paid that amount in actuality. We're required to have a product that is expected to pay that percent on average. Sounds like it should be the same, but because of variances in age and health status, it's entirely possible that a specific plan design misses the target mark.

 

[Trakar]

Mmm... I'm knowledgeable about the parts that affect my company, and specifically the lines of business I support. There is a lot of stuff in ACA that is specific to Medicare or Medicaid, and I have very little knowledge of any of that. My knowledge on things relating to providers (I understand there isn't much) is very limited, as is what I know of ACOs. I know a pretty solid bit about the Individual & Family market, somewhat less about the Small Group market.

Honestly, the bill is just too big for me to try to be an expert about the whole thing.

I'm so disillusioned!


Seriously, with bills such as this, even the most knowledgeable people regarding the legislation are generally only going to be able to speak to how the bill impacts and interacts with their own field of expertise. I know only superficially about how ACA interacts with and impacts the operations of the insurance industry, I am more familiar with how it impacts and interacts with the business and legal aspects of health care providers. I wouldn't dub myself an "expert" in these areas but I have a more focused interest in these areas and have thus read more about those areas of interaction.

 

[Emily's Cat]

I'm so disillusioned!


Seriously, with bills such as this, even the most knowledgeable people regarding the legislation are generally only going to be able to speak to how the bill impacts and interacts with their own field of expertise. I know only superficially about how ACA interacts with and impacts the operations of the insurance industry, I am more familiar with how it impacts and interacts with the business and legal aspects of health care providers. I wouldn't dub myself an "expert" in these areas but I have a more focused interest in these areas and have thus read more about those areas of interaction.

See now - that's what makes this a good discussion! We know different aspects of it, so there's room to learn and to compare. And maybe argue about nitpicky things in the mix!

 

[RandFan]

Here's a report that supports the idea that healthcare spending is concentrated amongst the sickest.

Shocking. Who would have thought?

I wonder if funeral spending is concentrated amongst the deadest.

Mgr: Bob, this report seems to suggest that most of our spending is concentrated on people whose vehicles need repair because of accidents.
Bob: We are an auto collision insurance company sir.
Mgr: Yes, but how is that fair to people who do not get into accidents?
Bob: Perhaps we could send them a Christmas calendar once a year.
Mgr: I like the way you think Bob.

 

[Kestrel]

CMS released an Actuarial Value calculator that we use. You input the benefit design, and it estimated what the expected percent of incurred costs will be.

We're not required to have paid that amount in actuality. We're required to have a product that is expected to pay that percent on average. Sounds like it should be the same, but because of variances in age and health status, it's entirely possible that a specific plan design misses the target mark.

That explains the wide variation in benefit designs on the exchanges. Saw a Silver plan yesterday with a $5,000 deductible. The deductible didn't apply to doctors visits and a lot of routine care. A nice fit for the needs of many consumers, but I suspect that most exchange customers would not have looked deep enough to figure that out.

 

[xjx388]

Mgr: Bob, this report seems to suggest that most of our spending is concentrated on people whose vehicles need repair because of accidents.
Bob: We are an auto collision insurance company sir.
Mgr: Yes, but how is that fair to people who do not get into accidents?
Bob: Perhaps we could send them a Christmas calendar once a year.
Mgr: I like the way you think Bob.

The point seemed to be in contention a few posts before that so I thought I would help confirm the obvious...

ETA: The larger point is also that a person would probably do better by saving the money they would have spent on premiums into an HSA or other savings account. Most people do not spend much on healthcare until much later in their lives. Thus, they can probably afford to pay their own healthcare for most of their lives then use the savings when they no longer can. Or better yet, pay for a catastrophic plan and save the difference to pay for the relatively small outlays earlier in their lives.

 

[RandFan]

The point seemed to be in contention a few posts before that so I thought I would help confirm the obvious...

Thanks for having a sense of humor. Looking back it was redundant and a cheap shot.

ETA: The larger point is also that a person would probably do better by saving the money they would have spent on premiums into an HSA or other savings account. Most people do not spend much on healthcare until much later in their lives. Thus, they can probably afford to pay their own healthcare for most of their lives then use the savings when they no longer can. Or better yet, pay for a catastrophic plan and save the difference to pay for the relatively small outlays earlier in their lives.

I agree with your argument except that human nature isn't conducive to long term planning for most. Of course we can debate about the merits of govt enforced behavior and that's also fair.

 

[Emily's Cat]

The larger point is also that a person would probably do better by saving the money they would have spent on premiums into an HSA or other savings account. Most people do not spend much on healthcare until much later in their lives. Thus, they can probably afford to pay their own healthcare for most of their lives then use the savings when they no longer can. Or better yet, pay for a catastrophic plan and save the difference to pay for the relatively small outlays earlier in their lives.

I agree with your argument except that human nature isn't conducive to long term planning for most. Of course we can debate about the merits of govt enforced behavior and that's also fair.

I disagree with your argument, xjx388. Some of it might be bias on my part, but I don't think just saving the premium amounts would really be a reasonable alternative, unless you also have substantial other sources of wealth to draw on.

Sure, *most* people experience illnesses later in life. And sure, *most* people don't have catastrophic things happen to them.

But it's far from stable. And all it takes is one event to really destroy that savings approach. It's not that the likelihood of an event is large (it's fairly small) - it's that the severity of it is enormous. A few years ago, I ended up with an ER visit, followed by three months of a specialty drug, followed by surgery. Even if I had put away the full premium equivalents from the prior 15 years of my working life, I wouldn't have had nearly enough socked away to cover the actual costs. My bill came out to over $125,000 all told. Even if my premium had been $500 a month for 15 years, I would have ended up being $35,000 short. That's enough to bankrupt me, easily.

 

[Armitage72]

Personal anecdote, so obviously of limited value.

Yesterday I got my first paycheck of 2015, with the new year's insurance coverage. The company that I work for is providing the same coverage that I had last year.

They're taking 85 cents less out of each paycheck than they did last year.
Clearly, the insurance company is suffering to have to jack up rates like that...

 

[Emily's Cat]

Personal anecdote, so obviously of limited value.

Yesterday I got my first paycheck of 2015, with the new year's insurance coverage. The company that I work for is providing the same coverage that I had last year.

They're taking 85 cents less out of each paycheck than they did last year.
Clearly, the insurance company is suffering to have to jack up rates like that...

How big is your company? I would suspect that what you're seeing is experience rating.

It's not cut and dried, as it tends to vary by company size... but employer-sponsored health care is usually not pooled with anyone else. They only pool the experience of their own employees. And since the rates tend to be based on the costs actually experienced by that company in prior years... it's not horribly uncommon to see a healthier-than-average company show a drop in rates some years. There are also a lot of variations on the actual funding methodology used, that can cause this to happen in some years.

As clarification - is this the amount that you contribute to your health insurance, or the total amount? If it's the amount that you contribute, then there's an added layer of translation involved. It could be that the actual cost went up, but your company also decided to contribute a larger proportion of the cost on your behalf.

It gets really complicated really fast.

 

[Trakar]

Mgr: Bob, this report seems to suggest that most of our spending is concentrated on people whose vehicles need repair because of accidents.
Bob: We are an auto collision insurance company sir.
Mgr: Yes, but how is that fair to people who do not get into accidents?
Bob: Perhaps we could send them a Christmas calendar once a year.
Mgr: I like the way you think Bob.

And if Bob were a sales manager a suggestion for drive-through restaurant coupons along with a few to Daiquiri-Hut* might have earned him a bonus!

*A chain (unsure if it still exists) in Louisiana and Texas that served a variety of alcoholic daiquiris in plastic cups (like Icees) at drive through stands, and they always stayed open until 30 minutes after the bars closed!

 

[Trakar]

The point seemed to be in contention a few posts before that so I thought I would help confirm the obvious...

ETA: The larger point is also that a person would probably do better by saving the money they would have spent on premiums into an HSA or other savings account. Most people do not spend much on healthcare until much later in their lives. Thus, they can probably afford to pay their own healthcare for most of their lives then use the savings when they no longer can. Or better yet, pay for a catastrophic plan and save the difference to pay for the relatively small outlays earlier in their lives.

If you want to argue that self-insuring through putting sufficient funds into a secured account as an alternative to being forced to purchase and carry private insurance, is a better way to go for some people in meeting ACA requirements. I would certainly be interested in paying attention to and participating in that discussion. I know such is allowed for businesses covering their employees, and I believe some states have set up a situation where their citizens can participate in programs that are similar to individual self-insurance, but I really haven't investigated such in depth,...or am I misunderstanding your statements.

Personally, my healthcare (and my wife's) is covered through Tricare, so I haven't really explored all the options from the insured individual perspective with regard to all of the available ACA options.

 

[Armitage72]

It's not cut and dried, as it tends to vary by company size... but employer-sponsored health care is usually not pooled with anyone else. They only pool the experience of their own employees. And since the rates tend to be based on the costs actually experienced by that company in prior years... it's not horribly uncommon to see a healthier-than-average company show a drop in rates some years.

To be honest, I figured that it was something like that.
The HR department organizes physical fitness, nutrition, and general health-related activities throughout the year. The number of activities you complete determines your tier for the next year's health insurance. The higher your tier, the less gets deducted from your paycheck.
We're healthier, so the company gets charged less, so we get charged less.

 

[Trakar]

To be honest, I figured that it was something like that.
The HR department organizes physical fitness, nutrition, and general health-related activities throughout the year. The number of activities you complete determines your tier for the next year's health insurance. The higher your tier, the less gets deducted from your paycheck.
We're healthier, so the company gets charged less, so we get charged less.

That sounds like a plan that needs to be more widely implemented!

 

[RandFan]

To be honest, I figured that it was something like that.
The HR department organizes physical fitness, nutrition, and general health-related activities throughout the year. The number of activities you complete determines your tier for the next year's health insurance. The higher your tier, the less gets deducted from your paycheck.
We're healthier, so the company gets charged less, so we get charged less.

That sounds like a plan that needs to be more widely implemented!

I concur.