Heeeeeeere's Obamacare!

[Ziggurat]

This is false.

I believe that you are conflating underwriting with actuarially sound rate setting. They are two entirely different things, performed by people with entirely different backgrounds.

This sounds like a semantic debate, one which I'm not particularly interested in pursuing. I you go back and look at the origins of the discussion, you'll see the issue was raised of whether or not anyone's rates significantly increased. A claim was made that coverage for expensive procedures could not be offered for cheap, and that rates would only go up significantly because of improved coverage. I pointed out that this is false: coverage can be cheap even for expensive procedures if the risk is low. Since insurers can no longer use your individual risk in assessing your premium (and I really don't care if that's called underwriting or actuarial rating or whatever), then a person with a low individual risk could see their rates increase significantly even for the same coverage. I understand you're involved in this industry and I'm willing to defer to you on terminology, but I don't think your objection changes the substance of the discussion.

 

[Kestrel]

Not necessarily. When it's a completely risk-underwritten pool and doesn't cover maternity or drugs... it's not so hard to maintain a low premium with a low to moderate deductible and OOP Max.

Those approaching retirement age are charged the highest premiums for exchange policies. People this age have a much higher risk of having a stroke, heart attack or other serious medical condition. The actuaries also know the risk of anyone in this age group needing maternity care is essentially zero.

So yes, those of childbearing age could save a few bucks if maternity care was not included. But for society as a whole, it's probably a bad bargin. We end up with babies and mothers with problems that could have been prevented with proper maternity care.

The ACA requirement that all plans include coverage of prescription drugs, mental illness, rehabilitation therapy and such does make the policies more expensive. I have yet to see any estimates of how much each of these requirements adds to the premium. The only data I do have is that the premium on my new exchange policy that covers all of these extras is only $15 more a month than the old policy that only covers basic medical.

 

[AlaskaBushPilot]

Back story: Small business owner without insurance for 5 plus years because I am healthy but for 2 back surgeries I had when I was younger. No policy at any price would cover me for what will happen - my back will go out. So I went without and got away with it.

The ACA results: I now have a gold level plan with $0 deductible and annual max $6,000 out of pocket. All my fees for doctors, lab work, xrays, mental health, prescriptions ect are all flat fees ranging from $20 to $250 (ER visit). I get one free eye exam a year and some other bits and pieces. Most importantly they can't deny me coverage for back issues.

I also went ahead and added a dental plan that covers 2 cleanings a year and has a 100 deductible with a 20% copay after that.

I was eligible for a $25.00 a month tax credit and choose to apply the full amount to my health insurance bill. Total monthly cost after credit $170.34

Needless to say I am quite happy and look forward to seeing a dentist and getting my first regular check up in god knows how many years. There were over 110 plans to choose from and once the website was ironed out it took about a full hour to figure everything out. Thanks Obama.

I was scanning the last five pages for a different reason but wanted to spotlight this for a moment to acknowledge and demonstrate that the law is not an all-or-nothing "everyone loses" or "everyone wins" affair. This story is going to be common. Guys with bad backs getting insurance. That's the good news. The bad news is the same thing - these are the people we expect to sign up. Not the young invincibles.

Looks like there is some data finally coming out on the 18-34 year old cohort, which they were banking on coming in at 40%. It came in at 28%, and soon we will find that like the above, it is skewed towards those that want services as opposed to those who want to escape premiums because they are healthy.

The numbers would have to increase by almost half in order to pay for coverage of the older and sicker, not even factoring in the self-selection bias towards more costlier insurees. How much would this cohort have to increase in order to pay for both? I can hardly imagine, but the situation is untenable to put it mildly.

I don't think this means a "death spiral" at all upon reflection, despite the invincibility of the math. Because I have no idea what Obamacare actually is, given the fact it is a constantly moving target with major parts of the law just abandoned or otherwise modified. They have to do something, but it is a political matter beyond my capacity to predict.

 

[Unabogie]

Looks like there is some data finally coming out on the 18-34 year old cohort, which they were banking on coming in at 40%. It came in at 28%, and soon we will find that like the above, it is skewed towards those that want services as opposed to those who want to escape premiums because they are healthy.

No, sorry, this is false. 40% is the TOTAL number of people in that demographic. They were never banking that all of them would sign up in the first year. And it's not like there's no precedent for this, since Romney care signed up exactly 28% of the same folks in 2006, and in later years signed up most of the rest, and it's still doing fine and is very popular.

The numbers are actually looking pretty good.

http://www.hhs.gov/news/press/2014pres/05/20140501a.html

 

[Kestrel]

It's widely believed that premiums would skyrocket if younger Americans did not sign up for insurance. In fact, premiums would have to go up by less than 10% even if none of the younger age group signed up.

 

[MattusMaximus]

Oops! GOP steps in it again...

Obamacare Truthers Get Caught in a Lie on Delinquency Rate

One way to make Obamacare look bad: Count as unpaid the new enrollees whose premiums aren’t even due yet! ...

... Here’s a little language from the Democratic memo that lays it out a bit more fully: “As of April 15, premiums had only come due for individuals who had signed up for coverage before March 15. Five million individuals had enrolled in coverage through the marketplaces as of March 17. On April 17, the president announced that 8 million Americans had signed up for coverage through the marketplaces. That means that more than 3 million enrollees—or nearly 40 percent of all enrollees—did not have premiums due by April 15 and therefore were not required to have paid them by that point.”

In other words, people who didn’t even have premiums due yet, and who account for 37.5 percent of all enrollees, are counted in this GOP report as part of the delinquent third.

If you don’t want to take it from Democrats, take it from the insurance officials themselves. They dispute the GOP numbers. ...

I think the GOP was better off screaming about death panels

 

[Kestrel]

Obamacare Truthers Get Caught in a Lie on Delinquency Rate


I think the GOP was better off screaming about death panels

The GOP base has been trained to ignore the mainstream media as a source of news. They will continue to believe in death panels as long as the radio pundits and right wing blogs continue claiming that death panels exist. For the same reason, they are certain that Obama cooked the books on health care sign ups.

The scary part is that a large segment of our population has been sucked in by conspiracy theory thinking. To actually fake the numbers would require the cooperation of a vast number of civil servants. In our nation, civil servants can't be fired at will. This job protection exists to immunize them from political manipulation.

 

[Unabogie]

The GOP base has been trained to ignore the mainstream media as a source of news. They will continue to believe in death panels as long as the radio pundits and right wing blogs continue claiming that death panels exist. For the same reason, they are certain that Obama cooked the books on health care sign ups.

The scary part is that a large segment of our population has been sucked in by conspiracy theory thinking. To actually fake the numbers would require the cooperation of a vast number of civil servants. In our nation, civil servants can't be fired at will. This job protection exists to immunize them from political manipulation.

The question I ask every time one of these lies is exposed is, if Obamacare is such a trainwreck and is so unpopular and is such a liability to Democrats, why does the GOP lie so much about it? Either Obamacare isn't a trainwreck, and isn't in a death spiral, and isn't a liability, or it is, but the GOP can't help themselves and just lie anyway.

Neither is very comforting coming from one of the two major major parties we have here.

 

[Fast Eddie B]

It's widely believed that premiums would skyrocket if younger Americans did not sign up for insurance. In fact, premiums would have to go up by less than 10% even if none of the younger age group signed up.

Just curious...

...over what time frame?

I remain very, very interested how this plays out over the next several years, if and when average increases can be computed.

Of course, we were told to anticipate an average decrease of $2,500/yr for a typical family. Repeatedly.

I wonder what that was based upon.

 

[Fast Eddie B]

Some survey numbers here:

http://www.npr.org/2014/04/03/298401923/npr-poll-obamacare-more-popular-than-president

Obamacare is gaining popularity, yet more still oppose than favor.

But let's hope it's a success, and it's approval numbers continue to grow.

It will all hinge on individual's real world experiences with it going forward.

 

[Emily's Cat]

This sounds like a semantic debate, one which I'm not particularly interested in pursuing.

Well, seeing as I'm an actuary, it's not particularly semantic to me.

I you go back and look at the origins of the discussion, you'll see the issue was raised of whether or not anyone's rates significantly increased. A claim was made that coverage for expensive procedures could not be offered for cheap, and that rates would only go up significantly because of improved coverage. I pointed out that this is false: coverage can be cheap even for expensive procedures if the risk is low. Since insurers can no longer use your individual risk in assessing your premium (and I really don't care if that's called underwriting or actuarial rating or whatever), then a person with a low individual risk could see their rates increase significantly even for the same coverage. I understand you're involved in this industry and I'm willing to defer to you on terminology, but I don't think your objection changes the substance of the discussion.

You might have seen that I supported the overall point that you're making? That, however, doesn't put me in a position to ignore false information when it is presented. Consider it a public service.

What is outlawed is risk rating, which is an underwriting function - it is the application of differing rates to an underlying premium structure, based on the assessed risk of the individual.

Premiums are still based on actuarial data, and on sound actuarial methodology. That methodology incorporates, among many other things, the overall expected risk level of the entire pool. That's how we get premiums that are sufficient to ensure solvency of the product.

 

[Emily's Cat]

Those approaching retirement age are charged the highest premiums for exchange policies. People this age have a much higher risk of having a stroke, heart attack or other serious medical condition. The actuaries also know the risk of anyone in this age group needing maternity care is essentially zero.

Sure, they're charged the highest premium - 3X the premium of the youngest people. But their costs, on average, are about 7.5X as high as the youngest people. Take a minute and think about what that means for the premium for young people.

So yes, those of childbearing age could save a few bucks if maternity care was not included. But for society as a whole, it's probably a bad bargin. We end up with babies and mothers with problems that could have been prevented with proper maternity care.

Um... okay? But as long as "society as a whole" isn't the one paying for it, and we're still expecting individual people to pay for a pretty good chunk of their own costs... then forcing people to pay for services that they do not want, and will not use, so that someone else gets a cost break may not make them happy.

The ACA requirement that all plans include coverage of prescription drugs, mental illness, rehabilitation therapy and such does make the policies more expensive. I have yet to see any estimates of how much each of these requirements adds to the premium. The only data I do have is that the premium on my new exchange policy that covers all of these extras is only $15 more a month than the old policy that only covers basic medical.

I don't particularly care if you haven't seen them, Kestrel. As I said, there are many moving parts involved in this. The amount added varies by state, and by carrier. The impact has, for my part of the world, been between about 5% and 35%, depending on the plan design, how many of those were already covered, the market, the location, and many other pieces.

 

[Kestrel]

Just curious...

...over what time frame?

I remain very, very interested how this plays out over the next several years, if and when average increases can be computed.

Of course, we were told to anticipate an average decrease of $2,500/yr for a typical family. Repeatedly.

I wonder what that was based upon.

The limits on premiums based on age create a small premium subsidy of the oldest purchasers by the youngest. If young Americans had not signed up for the ACA, the premiums of older Americans have to be 10% higher to make up the shortfall. This is just a simple math calculation.

The $2,500 figure is an estimate of how much cost shifting adds to the medical and health insurance bills of an average family over a year. The need for cost shifting will go down as more Americans are covered by private insurance or a government programs like Medicaid.

 

[Kestrel]

Sure, they're charged the highest premium - 3X the premium of the youngest people. But their costs, on average, are about 7.5X as high as the youngest people. Take a minute and think about what that means for the premium for young people.

I do understand and have actually calculated the effect. Yes, the young folks in the individual market pay a bit more due to this rule, but many of them are also eligible for subsidies. And as they get older, the same rule will reduce their premiums.

The sources I have seen put the ratio of medical costs around 5 to 1. Do you have a source for the 7.5 to 1 ratio?

Um... okay? But as long as "society as a whole" isn't the one paying for it, and we're still expecting individual people to pay for a pretty good chunk of their own costs... then forcing people to pay for services that they do not want, and will not use, so that someone else gets a cost break may not make them happy.

I don't particularly care if you haven't seen them, Kestrel. As I said, there are many moving parts involved in this. The amount added varies by state, and by carrier. The impact has, for my part of the world, been between about 5% and 35%, depending on the plan design, how many of those were already covered, the market, the location, and many other pieces.

I was hoping you had a source where we could look at how much each requirement adds to the price of insurance. But instead I get the impression you are annoyed by the question.

 

[Fast Eddie B]

The $2,500 figure is an estimate of how much cost shifting adds to the medical and health insurance bills of an average family over a year.

Wow.

My mistake.

I really thought I recalled the president saying his plan would save the typical American family $2,500 a year.

I must be misremembering.

Or someone is really spinning a pretty darn simple sentence after the fact.

But all seriousness aside...

...I do think I understand the 10% figure. You meant it not as an increase in rates, but as a differential between young and old.

Or 10% higher than they would have been if young people HAD signed up.

Or something.

Just confused - and not for the first time!

 

[Grizzly Bear]

Wow.

My mistake.

I really thought I recalled the president saying his plan would save the typical American family $2,500 a year.

I must be misremembering.

Or someone is really spinning a pretty darn simple sentence after the fact.

But all seriousness aside...

...I do think I understand the 10% figure. You meant it not as an increase in rates, but as a differential between young and old.

Or 10% higher than they would have been if young people HAD signed up.

Or something.

Just confused - and not for the first time!

I think your recollection was correct:
http://www.politifact.com/truth-o-m...st-typical-familys-health-insurance-premium-/

I didn't follow that issue very well so I'll defer my own comments on it at this time.

 

[plague311]

I do understand and have actually calculated the effect. Yes, the young folks in the individual market pay a bit more due to this rule, but many of them are also eligible for subsidies. And as they get older, the same rule will reduce their premiums.

The sources I have seen put the ratio of medical costs around 5 to 1. Do you have a source for the 7.5 to 1 ratio?



I was hoping you had a source where we could look at how much each requirement adds to the price of insurance. But instead I get the impression you are annoyed by the question.

I think you'll find getting sources from EmilyCat a bit complicated. Most of the things she states as facts are specifically related to information she gets from her job, that she can't share here, so you'll just have to take her word for it. At least that's the way it's come across so far. I couldn't find anything using googlefu if anyone else comes across it I'd be interested as well.

 

[Kestrel]

I think you'll find getting sources from EmilyCat a bit complicated. Most of the things she states as facts are specifically related to information she gets from her job, that she can't share here, so you'll just have to take her word for it. At least that's the way it's come across so far. I couldn't find anything using googlefu if anyone else comes across it I'd be interested as well.

While the ACA was being created, there was little discussion in the media of the coverage mandates except for contraception. On that issue, opponents waged a war over an issue that most of us believed was settled a half century ago.

One goal of the ACA was to assure that insured persons would get the care they needed without going bankrupt in the process. Prescription drug coverage had to be included to achieve that goal. One of my friends just started a treatment program where the drugs alone will cost $80,000.

 

[Emily's Cat]

I do understand and have actually calculated the effect. Yes, the young folks in the individual market pay a bit more due to this rule, but many of them are also eligible for subsidies. And as they get older, the same rule will reduce their premiums.

The sources I have seen put the ratio of medical costs around 5 to 1. Do you have a source for the 7.5 to 1 ratio?

I was hoping you had a source where we could look at how much each requirement adds to the price of insurance. But instead I get the impression you are annoyed by the question.

I'm not annoyed by the question, I'm sorry if I gave you that impression. I can't give you a source. My source for the 7.5:1 is internal company data, which I'm not at liberty to divulge. My source for the % impact is based on real world discussions with other actuaries over the course of the last few years, comparing the impacts that we're calculating in our company, and what they;re calculating in their companies... and trying to estimate an aggregate impact level. The problem is that there are lots of moving parts, so the spread is large, and it's virtually impossible to pin it down to a single number and say "This, this is how much the change is worth".

 

[Emily's Cat]

I think you'll find getting sources from EmilyCat a bit complicated. Most of the things she states as facts are specifically related to information she gets from her job, that she can't share here, so you'll just have to take her word for it. At least that's the way it's come across so far. I couldn't find anything using googlefu if anyone else comes across it I'd be interested as well.

Snideness aside, this is true for a lot of things. This is a field that I'm fairly expert in. I've got 14 years experience, and this is my focus. A significant amount of numbers that I use are based on studies I've done for my job - I can share ballpark bits and pieces, but I cannot share actual results, it would be unethical to do so. Beyond that... treat me like any other expert. Decide whether or not you want to believe me on your own.

although I also refuse to give you my RL name and credentials, so you're left with deciding whether or not I make enough sense for you to conclude that I'm not full of baloney!