UPHELD!!! Obamacare

[docjohn]

Hrant makes some great points. In the real world you would not believe how many people who are insured for various reasons give false info when they check in to the er for emergent care...much of "our" meaning the systems' loss is the uninsured coupled with bad demographics of those who would otherwise be covered because of bad info,in college towns especialy the drunken fall down students who come in with thier parents ins info but use thier college address well the computers don't like that, and the time and effort to merge that info is a lost cause......What obama care is trying to do is allow the folks who would keep thier health issues untreated until it f$cks them up and they go to the er an avenue to get preventative or "well" doctor visits...but you get what you pay for in life,so who knows what doctors will accept the new medicaid

 

[enkrypt3d]

it couldn't come soon enough.... i was just denied coverage due to a pre-existing condition.... I'm livid.

I guess this doesn't bother anyone

 

[Hrant]

I guess this doesn't bother anyone

Of course it does.

But then again, let me reiterate that the "market" is operating based on certain rules that we all as a society have agreed to pursuant to our quasi pluralistic democracy. We have "voted" that there will be winners and losers based on how each one of "us" chooses (though not so easy but using the term rather loosely) play within the market. The ACA is trying to change the rules and therein lies the conflict of who will lose rather than how many more will or may win. It is not a clear cut outcome irrespective of how many stats and studies are produced to support one vs. the other.

Without taking away any of the individual painful scenarios, and some of the examples offered are indeed sad and reflect the failures of our public policies (but again this is not a failure of the market), let me offer the devil's argument with a totally impassionate response. And I apologize before hand for this will come across as being insensitive but that is not my intent; as with all my previous posts, I am trying to give this discussion some structure given the different ideological flavors that govern this debate.

1) For the friend who lost his job and decided to "roll the dice" (assuming this was indeed the scenario) by not purchasing COBRA insurance because it was expensive - albeit apparently the family had savings/resources - who should be held responsible and accountable for this decision/outcome and grief? Is this the fault of the insurance company or the person/family for having taken a gamble? Harsh question indeed.

From a public policy perspective how does one redress this situation when an alternative as in COBRA coverage was made available. Well the ACA now mandates that such individual must purchase health insurance - if they opt out to, they pay a modest tax penalty in comparison to premium costs. The Exchange offers richer benefit policies and "may" offer them at a lower premium option (than COBRA) by using subsidies. And such policies will not have lifetime limits and there will be a cap on copays and deductibles.

[I won't address at this time the potential of rationing care given that the current pent-up demand will not be easily accommodated with the current supply of physicians and allied health workers.]

2) Regarding: "I was just denied coverage due to pre-exiting condition." Again, without knowing the particular circumstances, the first question that one would ask to solve the underlying public policy question (if any) is: why didn't you have insurance coverage already, or why were you un-insured? Was this by choice or the premiums were too high, or did you just lose a job that offered such coverage and you didn't opt for COBRA? Details matter in such hanging statements.

If the issue is the premium was too high, then that is a dollar and cents issue. If you are poor enough, then you would qualify for Medicaid even with pre-existing conditions. If you are not that poor, at least here in California there is a state administered program through private insurers that offers insurance for such pre-exiting condition individuals who can't find coverage elsewhere albeit it has, as expected, higher premiums.

Assuming your pre-existing condition is a rather a costly and/or chronic proposition, no rational (actuarially sound) insurance company will offer you coverage - as in single policy - knowing full well that you will cost them more than their annual premium and this perhaps for years to come. That would be accepting a pure loss. No business is this blindly altruistic - for profit or non-profit. Now, if you were part of a large employer group, this would be averaged out with little impact on all the other employees' premiums. For small group employers, their insurance premium may double just because of your pre-existing condition (if you are a new hire) and may cause the employer to either drop health insurance offerings altogether or opt for higher employer contributions with higher deductible and copay policy.

In this second case, the ACA again offers a solution: pre-existing conditions can't be turned down. And insurance companies will make sure that they capture this "risk" in their projections of new premiums under the ACA. [Or minimize such individuals with savvy marketing or not even participating in the Exchange.] Since the Exchange is focusing on individuals and small group employers, where the premiums land and which option you choose may or may not be "affordable" even after subsidies (the income elasticity). This is still the unknown and the $64K question. As we say it in the business, you will now have "access" with coverage through the Exchange, but whether it is "affordable" for you to use care once you have to shell out of pocket copays and deductibles (price elasticity) is another question.

HTH

 

[BD]

As usual, an entitlement law written in the name of the people that will mostly likely bankrupt the country, so the liberal side of the political spectrum, have mad loopholes.

I just wait till I get sick before I sign up for the program... Unless the IRS get to me first. Than again, if this recession goes on forever, I'll be a iPhone using, cigar smoking, rolex wearing, NSX driving individual who is on paper, in the bottom 50%. Therefore, I'm pretty much exempt from paying. However, I'll be much happier to pay for my current $382, soon to be $428, $0 deductible, 100% coverage Kaiser insurance, because I know if they screw me over, I have the right to go after them.

 

[enkrypt3d]

Of course it does.

But then again, let me reiterate that the "market" is operating based on certain rules that we all as a society have agreed to pursuant to our quasi pluralistic democracy. We have "voted" that there will be winners and losers based on how each one of "us" chooses (though not so easy but using the term rather loosely) play within the market. The ACA is trying to change the rules and therein lies the conflict of who will lose rather than how many more will or may win. It is not a clear cut outcome irrespective of how many stats and studies are produced to support one vs. the other.

Without taking away any of the individual painful scenarios, and some of the examples offered are indeed sad and reflect the failures of our public policies (but again this is not a failure of the market), let me offer the devil's argument with a totally impassionate response. And I apologize before hand for this will come across as being insensitive but that is not my intent; as with all my previous posts, I am trying to give this discussion some structure given the different ideological flavors that govern this debate.

1) For the friend who lost his job and decided to "roll the dice" (assuming this was indeed the scenario) by not purchasing COBRA insurance because it was expensive - albeit apparently the family had savings/resources - who should be held responsible and accountable for this decision/outcome and grief? Is this the fault of the insurance company or the person/family for having taken a gamble? Harsh question indeed.

From a public policy perspective how does one redress this situation when an alternative as in COBRA coverage was made available. Well the ACA now mandates that such individual must purchase health insurance - if they opt out to, they pay a modest tax penalty in comparison to premium costs. The Exchange offers richer benefit policies and "may" offer them at a lower premium option (than COBRA) by using subsidies. And such policies will not have lifetime limits and there will be a cap on copays and deductibles.

[I won't address at this time the potential of rationing care given that the current pent-up demand will not be easily accommodated with the current supply of physicians and allied health workers.]

2) Regarding: "I was just denied coverage due to pre-exiting condition." Again, without knowing the particular circumstances, the first question that one would ask to solve the underlying public policy question (if any) is: why didn't you have insurance coverage already, or why were you un-insured? Was this by choice or the premiums were too high, or did you just lose a job that offered such coverage and you didn't opt for COBRA? Details matter in such hanging statements.

If the issue is the premium was too high, then that is a dollar and cents issue. If you are poor enough, then you would qualify for Medicaid even with pre-existing conditions. If you are not that poor, at least here in California there is a state administered program through private insurers that offers insurance for such pre-exiting condition individuals who can't find coverage elsewhere albeit it has, as expected, higher premiums.

Assuming your pre-existing condition is a rather a costly and/or chronic proposition, no rational (actuarially sound) insurance company will offer you coverage - as in single policy - knowing full well that you will cost them more than their annual premium and this perhaps for years to come. That would be accepting a pure loss. No business is this blindly altruistic - for profit or non-profit. Now, if you were part of a large employer group, this would be averaged out with little impact on all the other employees' premiums. For small group employers, their insurance premium may double just because of your pre-existing condition (if you are a new hire) and may cause the employer to either drop health insurance offerings altogether or opt for higher employer contributions with higher deductible and copay policy.

In this second case, the ACA again offers a solution: pre-existing conditions can't be turned down. And insurance companies will make sure that they capture this "risk" in their projections of new premiums under the ACA. [Or minimize such individuals with savvy marketing or not even participating in the Exchange.] Since the Exchange is focusing on individuals and small group employers, where the premiums land and which option you choose may or may not be "affordable" even after subsidies (the income elasticity). This is still the unknown and the $64K question. As we say it in the business, you will now have "access" with coverage through the Exchange, but whether it is "affordable" for you to use care once you have to shell out of pocket copays and deductibles (price elasticity) is another question.

HTH

A bit wordy but cobra from my last job would cost me $1350 a month for me and my wife.... um how about no. I run my own business as an independent contractor and need to purchase my own insurance.

 

[NSXLNT]

A bit wordy but cobra from my last job would cost me $1350 a month for me and my wife.... um how about no. I run my own business as an independent contractor and need to purchase my own insurance.

Me too. COBRA is basically an unaffordable option for most people. There's no ethical reason why an individual should not be able to purchase a policy on his own that costs the same as what was available through some large group policy.

 

[LJSB]

cobra from my last job would cost me $1350 a month for me and my wife.... um how about no. I run my own business as an independent contractor and need to purchase my own insurance.

Me too. COBRA is basically an unaffordable option for most people. There's no ethical reason why an individual should not be able to purchase a policy on his own that costs the same as what was available through some large group policy.

Something here doesn't makes sense. Perhaps some of you folks don't understand how COBRA works or, it's different in your state.

I run a business in NY and if an employee leaves or is let go, they can opt for COBRA and it is the same rate that the employer pays. The employer has the option of adding 2% for handing the process.

Before you say why to the 2% ,bear in mind that the employer is the one who collects the money or has to pay a third party to administrate this. The employee usually pays 1-2 weeks late and the employer has to foot the bill until they pony up. I usually get stuck somewhere along the line on this.

It seems that until the employee pays the bill they don't realize the true cost of the benefit they had all along. COBRA IS a better rate then you would pay for the same policy if you were not part of the employer group.

My group health insurance premiums go up 15-25% A YEAR.
That's a really big number.

Consider this example;
You have a rate of $1350 per month and say the employer pays 80% and the employee pay 20%.

If the premium goes up 20%, you the employee would pay an additional $12.46 and the company an additional $48.95 per week.

That would mean based on a 40 hour week, for the employer the employee just cost them another $1.22 and hour and in the employee's view, he sees his pay just got cut.

This is an environment that can create a bad dynamic between the two which is not the making of either party. Pay cuts demoralize the employee and sometimes effect performance so the employer is in a trap. He has to pay the additional premium and give the employee a raise just to keep the employee where they were in terms of take home pay.
Realistically the employee expects a raise if it's been a while since their last one and what this means is that the cost of keeping that employee just went up, significantly, while they may be at their limit of reasonable production expectations.

This spiraling pyramid cost is making it hard to keep people and tempting for the employer to consider downsizing.

 

[Hrant]

A bit wordy but cobra from my last job would cost me $1350 a month for me and my wife.... um how about no. I run my own business as an independent contractor and need to purchase my own insurance.

Wordy indeed because you left out all the pertinent details. Again, you are tossing info without context which makes offering solutions dubious at best.

You stated you were denied coverage because of pre-existing condition. But did you shop other venues? Are you aware of California's Major Risk Medical Insurance Board program that offers coverage policies through commercial plans for those with pre-existing conditions.

You state $1350 is too much no thank you. You do not disclose if this is a Cadillac plan or the bare minimum with high deductible. Frankly $1350 a month is not that high - if you are purchasing this in the individual market, have a pre-existing condition, and presumably you are not in your 30s.

And thank you Jo (pbassjo) for the COBRA example. As I noted, there are many well intentioned opnions floating in this thread albeit they need to be grounded with some reality check.

 

[enkrypt3d]

Wordy indeed because you left out all the pertinent details. Again, you are tossing info without context which makes offering solutions dubious at best.

You stated you were denied coverage because of pre-existing condition. But did you shop other venues? Are you aware of California's Major Risk Medical Insurance Board program that offers coverage policies through commercial plans for those with pre-existing conditions.

You state $1350 is too much no thank you. You do not disclose if this is a Cadillac plan or the bare minimum with high deductible. Frankly $1350 a month is not that high - if you are purchasing this in the individual market, have a pre-existing condition, and presumably you are not in your 30s.

And thank you Jo (pbassjo) for the COBRA example. As I noted, there are many well intentioned opnions floating in this thread albeit they need to be grounded with some reality check.

The policy I was denied for would cost me $245 a month for me and my wife so yes its a huge difference than Cobra... and I wasn't paying $1350out of my pocket (nor was the company I was working for - per person... )

Thanks for the tips.. I'll check it out. I can not wait for these insurance companies to be unable to exclude ppl based on their health.... (like me)

I wish the law went further to reduce costs of health care... I was in the hospital 5 years ago w/o insurance and the bill was $250k.... for 30 days.

I Hrant & pbassjo I can scan and show you my COBRA letter that shows the $1350 / month charge.... so its not like I'm making this up!

 

[Hrant]

I am not questioning the numbers. But as in every such scenario of comparisons, the questions are in the details; the $249/mo with what benefits/policy type vs. the $1350/mo.

I am not a broker, but I am quite confident the two policies were not identical in terms of deductibles, copays, and other variables - such as pre-existing or not. Was the $249 a catastrophic coverage only vs. the COBRA being a full benefit coverage with preventative care, medications, etc.? Something just seems amiss between the two actuarial premiums.

As for the $250K bill, the hospital industry is unique of its use of arcane accounting policies where the charges (the bill you saw) have no correlation to actual reimbursement or costs. Insurance companies facing the same bill often pay about 20-30% of that bill. It's like they know there will be about 5-10% walk in cash patients so they mark up their costs by 200% and even 500% knowing full well that some (especially overseas rich tourists - if its a reputable high end hospital) will pay it; and I know some were paying by American Express .........., some will try negotiate a percentage of the bill, and some bills will go into bad debt or charity care on their books. The net remains a cash cow for most hospitals.

 

[LJSB]

I Hrant & pbassjo I can scan and show you my COBRA letter that shows the $1350 / month charge.... so its not like I'm making this up!

I'm not accusing you of making up anything. Cool your jets.

This is a direct cut and paste from the U.S. Department of labor Cobra information page found <!--[if gte mso 9]><xml> <w:WordDocument> <w:View>Normal</w:View> <w:Zoom>0</w:Zoom> <woNotOptimizeForBrowser/> </w:WordDocument> </xml><![endif]-->[FONT=&quot]HERE[/FONT]

"The Consolidated Omnibus Budget Reconciliation Act (COBRA) gives workers and their families who lose their health benefits the right to choose to continue group health benefits provided by their group health plan for limited periods of time under certain circumstances such as voluntary or involuntary job loss, reduction in the hours worked, transition between jobs, death, divorce, and other life events. Qualified individuals may be required to pay the entire premium for coverage up to 102 percent of the cost to the plan."


It is a Federal Labor Law. Under COBRA you can get the SAME policy you had while you worked for your former employer for the exact same cost they paid plus 2%.

If you can't afford the policy, that they had I can certainly understand but AGAIN it is the same policy for the same price plus 2% if they even charge the 2%. It's a fact. It's the law, period.

This is from "An Employee's Guide to Health Benefits under Cobra" from the Department of Labor. You can get a .pdf copy of this booklet <!--[if gte mso 9]><xml> <w:WordDocument> <w:View>Normal</w:View> <w:Zoom>0</w:Zoom> <woNotOptimizeForBrowser/> </w:WordDocument> </xml><![endif]-->[FONT=&quot]Here.

"Another option may be to buy an individual health insurance policy.
HIPAA gives individuals who are losing group health coverage and
who have at least 18 months of creditable coverage without a break
in coverage of 63 days or more the right to buy individual health
insurance coverage that does not impose a preexisting condition
exclusion period."[/FONT]


Go look at the links I've have provided and you may find a answer to the dilemma you find yourself in.
Read and learn what your rights are.
Good luck.

 

[druby]

Insurance companies only live on a 2% profit margin... Bee, you're a smart guy, I'm just asking you as a common sense question... Does that make perfect sense to you? Do you feel bad for them? The two biggest buildings in Boston are: 1) the Prudential, and 2) the John Hancock tower. Do you really think they are hurting? How big is AIG again? Last I remember, it was big enough to throw the world economy into chaos. If they are "only" making 2%, they must be raking in a $htload of cash to become that big based on 2%.

None of the companies you mention are health insurance companies they are predominately life insurance companies that are investing their reserves in real estate. health Insurance carriers actually do rely only on around 2% profit margin. How else do you think with the new minimum loss ratio requirements that they are only allowed to keep around 15 cents on the dollar to pay ALL overhead and profit. How many companies can cover their overhead with only a 15% margin?

 

[druby]

Me too. COBRA is basically an unaffordable option for most people. There's no ethical reason why an individual should not be able to purchase a policy on his own that costs the same as what was available through some large group policy.

What most people don't realize is that COBRA is the premium your employer pays paying, the most they can charge additional is a 2% administrative charge. Your cost for COBRA is therefore the same as your large employer was paying and will vary from company to company based on their plan benefits and costs.

 

[LJSB]

I don't understand this 2% claim about that being their profit margin.

What I do know is that built into every policy is a 2% margin as a sales commission.

Independent brokers who put together plans for employers get this 2% from the Health Insurance Companies.

I use such a broker who works hard to craft the ideal policy for my business and helps me to choose the best company and policy for my needs. They act as the liaison between me and them and make straight that which is not easily or readily understood. Well worth it.

 

[bee_are_bee]

I don't understand this 2% claim about that being their profit margin.

What I do know is that built into every policy is a 2% margin as a sales commission.

Independent brokers who put together plans for employers get this 2% from the Health Insurance Companies.

I use such a broker who works hard to craft the ideal policy for my business and helps me to choose the best company and policy for my needs. They act as the liaison between me and them and make straight that which is not easily or readily understood. Well worth it.

It just means that, industry wide, the health insurance sector as a whole sees about a 2% profit. Last I checked the number was just over 4%.

 

[queenlives]

relevant to this thread:
http://mobile.businessweek.com/news...-risk-moral-authority-for-200-percent-returns

 

[LJSB]

It just means that, industry wide, the health insurance sector as a whole sees about a 2% profit. Last I checked the number was just over 4%.

I have to say I don't see how what you claim is likely or possible.

Why would anyone an entity or individual set up such a complex enterprise for 2%?

Furthermore, insurance companies primarily make money using the funds they get through premiums by investing. If they are running on a 2% margin I don't see how it would be possible for them to maintain the required funds for claims payouts to legally operate. States require them to have such funds to maintain a charter. The margin you claim is a tiny breath away from bankruptcy.

Show me, please.

 

[NSXLNT]

What most people don't realize is that COBRA is the premium your employer pays paying, the most they can charge additional is a 2% administrative charge. Your cost for COBRA is therefore the same as your large employer was paying and will vary from company to company based on their plan benefits and costs.

Thanks for clearing that up. However, that has not been my experience. Being self-employed, I have paid my own way for a long time. A previous post of mine in this thread explains what happened when I turned 50 and my rates were doubled. COBRA was one option I looked into and it was not cost-effective either.

 

[druby]

I have to say I don't see how what you claim is likely or possible.

Why would anyone an entity or individual set up such a complex enterprise for 2%?

Furthermore, insurance companies primarily make money using the funds they get through premiums by investing. If they are running on a 2% margin I don't see how it would be possible for them to maintain the required funds for claims payouts to legally operate. States require them to have such funds to maintain a charter. The margin you claim is a tiny breath away from bankruptcy.

Show me, please.

The insurance companies can afford such a low percentage because the money is still huge. 2-4% of a billion dollars is still good money (remember this is the profit not the overhead) and most of the carriers premiums run in the billions. Health insurance is pretty much money in money out. Most have pretty good reserves as well that they invest with. Most carriers I have dealt with are pretty good to work with and those that aren't I refuse to do business with. I have in 26 years never seen a claim that wasn't paid that should have been. At times I have to do an appeal and twice I had to go to the insurance commissioner for help (so the carriers are not always willing to pay everything) although one of the commissioner appeals I feel the carrier was correct and in fact the commissioner upheld for the carrier. I filed because the client insisted but the lady got a tummy tuck during her ceasarian section delivery and wanted the tummy tuck covered. That is cosmetic and something she asked for and shouldn't have been covered and I told her so. Most claim issues we deal with are just a simple coding mistake that is easily fixed.

 

[LJSB]

I understand what you are saying but I have a difficult time accepting a entity that has a billion or billions of dollars and getting into any business that only has a 2% return.



Where do you get that number? Really I would like to know. I don't mean it in any confrontational manner at all. I really am interested.

If a company is good or bad or their claims record is positive or not is not what I seek but source of the information that shows that the industry makes, as a average, a net profit of 2-4%.

 

[LJSB]

Thanks for clearing that up. However, that has not been my experience. Being self-employed, I have paid my own way for a long time. A previous post of mine in this thread explains what happened when I turned 50 and my rates were doubled. COBRA was one option I looked into and it was not cost-effective either.

What really gets my ire is for my employees, the health benfit they recieve is not taxed as income, which is good, but for me, the employer, it is. Unfair.

Depending on your tax bracket it can, for example add an additional 25-35% on top of the premium.

So if you go in business for yourself you buy your heath insurance with AFTER tax dollars.

For this reason I don't participate on my own company's Health Insurance Program, I am on my wife's.
My business's policy is better than my wife's but the slam of the extra tax translates into an additional $7K a year if I wanted in.

Just another way of heaping more on small business's shoulders.

 

[druby]

Article from US news about health insurance companies profits.

http://money.usnews.com/money/blogs/flowchart/2009/08/25/why-health-insurers-make-lousy-villains

Also being on the broker advisory boards for United Healthcare and in the past for Medical Mutual, Aetna, BCBS of GA and Humana they will go over the profit margins with us and how they calculate everything. It is pretty interesting to hear. medical Mutual and back in the day with BCBS (before Wellpoint and Anthem when they were non-profit) they actually did not look to make a profit at all. Medical Mutual uses that with us now to show how they can better afford to keep premiums down since they don't have to pay profit oit or be beholden to stock holders. However I do see the economies of scale with folks like United Healthcare being able to hold expenses down better just because they have so much business.

 

[LJSB]

Thank you. Now I see. I appreciate the link.

Would you know what would be their industry average percentage of gross profit is?

 

[druby]

Every carrier I ever talked with or went to meetings where it was discussed said they looked for 3-4%. I remember one year when a carrier - Starmark, had a 5% profit and they reduced rates and we had negative renewals the following year. There have been years when I have seen a carrier lose money as well. They normally pick their rates pretty accurately but there are times when some really huge claims hit that can effect the profits. I have seen quite a few claims paid that were in excess of $1M although only a few that went over $2M and none that ever hit $3M. Neonatal babies are the most expensive claims normally, especially those born with multiple issues or even worse born with drug addictions thanks to bad moms.

 

[kookoo4nsx]

I was in the same situation. 1200 for Cobra for myself, wife and kid.

Cobra for me alone was $400 per month. That's what I signed up for and a separate policy for my wife and son currently costs $275/month. It has the pregnancy exclusion. The policy is through golden rule.

A bit wordy but cobra from my last job would cost me $1350 a month for me and my wife.... um how about no. I run my own business as an independent contractor and need to purchase my own insurance.