Obamacare Only Looks Worse Upon Further Review

[Greenbeard]

Greenbeard is right, insurance premiums have been steadily rising it's not just now, in 2010. Didn't an insurance company in CA raise their premiums something like 39% while the HC debate was going on and the DC crowd glommed on to that saying "see, rising premiums, we must pass Obamacare!".

Yes, Wellpoint's proposed rate hike in California (later withdrawn when "numerous and substantial errors" were found in their math justifying the increase) was one of the sparks that brought reform back from the dead after Scott Brown's election. In that case, the premium hikes actually helped trigger reform, not the other way around.

 

[uscitizen]

Premiums were not rising before health care reform passed?

 

[Claudette]

Yeah, that thing that hasn't been implemented yet totally isn't accomplishing the things we hoped it would!

Could you be more disingenuous maybe? The Rates are going up in anticipation of the Law going into Effect. Even the CBO now says it will result in Higher costs, NOT LOWER.

Totally agree.

I was watching O'Reilly the other night and he was saying that he got his premium in the mail and it had gone up by $1,200. He was flabbergasted. Of course he says he can pay the extra and so can any other wealthy person who buys their own insurance.

If your not wealthy and buy your own insurance then its going to be one big hit in the pocketbook.

He called his insurance company and basically was told that they were gearing up for 2014.
Insurance companies are going to have to cover everyone with every illness. Of course thosd of us with health coverage are going to be footing the bill.

Anyone with coverage is going to be paying more. Way more.

Of course if employers have to pay more they won't be hiring. No jobs.

Yeah. Obama/Pelosi/Reid care really sucks. Hope and Change we can believe in. Bullshit.

 

[Oddball]

What "government insurance pool" are you talking about? The health insurance exchanges containing only private health plans?

Uh-huh...."Private" insurers, issuing policies which are fully compliant with federal mandates for which coverages will be offered and to whom....Otherwise, they wouldn't be allowed into the "private" health insurance exchanges.

Care to remind the class what the definition of fascism is, oh great oracle?

 

[Greenbeard]

Private" insurers, issuing policies which are fully compliant with federal mandates for which coverages will be offered and to whom....Otherwise, they wouldn't be allowed into the "private" health insurance exchanges.

And? Name a state in which health insurance products are currently unregulated. Hmm, it looks like by your definition there aren't any "private" insurers in existence anyway, nor have there been for some time.

 

[Oddball]

So, you're capitulating on the point that the federal "exchanges" are basically legalized medical fascism.

Glad we could cut through your usual diversionary text walls to the nut of the issue.

 

[boedicca]

Greenbeard is right, insurance premiums have been steadily rising it's not just now, in 2010. Didn't an insurance company in CA raise their premiums something like 39% while the HC debate was going on and the DC crowd glommed on to that saying "see, rising premiums, we must pass Obamacare!". And premiums will continue to rise . . . likely, even faster and higher . . . . because no one really knows how this will all play out come 2014. Insurance companies are going to grab what they can while they can (and joe average, once again, gets the shaft). But at some point uncle will say "see, still rising premiums, not even Obamacare could stop it!, the only solution is single-payer, government controlled HC." That's the end-game, always was. They just couldn't get that through all in one fell swoop . . . . but step by step they are moving towards it.

I met with my company's insurance broker yesterday. All of the companies are jacking up rates as much as they can prior to ObamaCare. I'm expecting a 14% hit. Oh joy.

In prior years, the hits have been due to the CA Insurance commission mandating that plans cover things our employees didn't want, and the ongoing crush on non-government plans to absorb the losses caused by Medicare and Medicaid.

 

[Charles_Main]

Premiums were not rising before health care reform passed?

Not at such an extreme 1 year rate. NO!

 

[Bern80]

1) What do you want insurers to compete on? Price? Risk (i.e. win by attracting the healthiest enrollees and rejecting everyone else)?

You're not getting how a market works or something if that's the question you're asking. Businesses selling like products don't get to set the rules. The consumer does that. Insurance companies simply will compete for people's money. How will the insurance companies get people's money? By doing what they want. That might mean lower cost plans, and/or greater customization of plans.

2) How does fragmenting the insurance market empower insurers to negotiate down reimbursements to providers, particularly in geographic regions where certain providers have attained substantial market clout (driving up prices).

Again you're not thinking about it the right way. Insurance companies will compete for people's money if they are forced to. I promise you that is the insurance companies worst fear to be deregulated. What I mean by deregulation would be things like states not dictating what insurance companies have to sell and making it easier for new companies to enter the market. That would drive down the prices of plans. That will bring to reimbursement rates frankly because providers won't have a choice. Reimbursement rates are what they are because they know the insurance companies can afford it. Haven't you ever noticed that if you told a hospital you wanted to pay cash for care your bill will likely be less than what the charge the insurance company? That's what would happen when the cost of plans goes down.

3) The five large health insurance companies are already national operations--how would removing state restrictions on out-of-state companies ("deregulation") dent their market shares? Just as Cleveland is a hub for Continental Airlines, why wouldn't Maine remain a "hub" for Anthem Blue Cross Blue Shield? In fact, given that insurers form relationships with networks of providers, why wouldn't the large, nationally present insurers (i.e. those who already have relationships with providers in most states, including lower reimbursements--and ultimately lower premiums--than potential competition) have an immediate and likely insurmountable advantage over any sort of upstart insurance company?

The goal isn't necessarily to 'dent their market share'. The hope would be that by removing government regulation on what they can and can't cover, it would allow for better customization of plans for the consumer. If Blue Cross for example did a good job of that, they could concievably gain market share while still lowering the cost of their plans.

4) Why is market transparency now a bad thing? You don't think prices should be publicly available to shoppers?

Never said that. I said it's something government doesn't need to be wasting tax payer money on.

[

 

[Oddball]

"Private" insurers, issuing policies which are fully compliant with federal mandates for which coverages will be offered and to whom....Otherwise, they wouldn't be allowed into the "private" health insurance exchanges.

Care to remind the class what the definition of fascism is, oh great oracle?

And? Name a state in which health insurance products are currently unregulated. Hmm, it looks like by your definition there aren't any "private" insurers in existence anyway, nor have there been for some time.

So, you're capitulating on the point that the federal "exchanges" are basically legalized medical fascism.

Glad we could cut through your usual diversionary text walls to the nut of the issue.

 

[Greenbeard]

You're not getting how a market works or something if that's the question you're asking. Businesses selling like products don't get to set the rules. The consumer does that. Insurance companies simply will compete for people's money. How will the insurance companies get people's money? By doing what they want. That might mean lower cost plans, and/or greater customization of plans.

Health insurance companies aren't selling Pepsi or widgets. They're constructing risk pools that necessarily involve them paying out on behalf of customers. This is an industry where you don't want every customer you can get and selling products to every consumer seeking to buy them is not always in your interest. That's why their business model is necessarily exclusionary to the maximum extent allowed by the law. When it comes to buying a Pepsi, $1.50 from me or you or anyone is equivalent--Pepsi won't turn away a paying customers. Health insurers, on the other hand, don't compete solely on price, they also compete on the risk of their customers. Hence the invention of pre-existing condition exclusions, rescissions, and rate variations based on demographics or health background.

Insurers can essentially compete on three things: 1) price, 2) comprehensiveness, and 3) risk. To some extent, 1 and 2 obviously stand in opposition to each other. Shedding benefits is cheap. Annual benefit limits or greater cost sharing can make for lower premiums. They can also become problematic if it turns out you need health care. Last year 62% of bankruptcies were due to illness or medical bills and, of those people, more than three-quarters were insured at the onset of their health issues. What happens when benefits become less comprehensive and insurers pay out less? Premiums will go down, things like medical bankruptcies will rise. I would guess that population health will also take a hit.

Again you're not thinking about it the right way. Insurance companies will compete for people's money if they are forced to. I promise you that is the insurance companies worst fear to be deregulated. What I mean by deregulation would be things like states not dictating what insurance companies have to sell and making it easier for new companies to enter the market. That would drive down the prices of plans.

Let's consider what the most competitive state markets are right now. We can use the results of a 2008 survey done by the GAO. We can either look at the total number of carriers in a state (perhaps adjusted for population) or we can look at the total market share of the five largest insurers in the state. I think the latter metric is more useful for looking at how competitive the market is.

By that measure, in 2008 the most competitive state health insurance markets were those in which the five largest carriers had less than, say, 80% of the market share. In increasing order of competitiveness, those states were: Colorado (79), Oregon (79), Michigan (77), New York (74), Arizona (73), Missouri (73), Texas (68), and Wisconsin (56). Honorable mention goes to Illinois and Oklahoma which, at 82% market share for the top 5 insurers, narrowly missed my arbitrary cutoff.

How were premiums in those states in 2008? Take a look at the group market:

Of the eight most competitive insurance markets: three are in the most expensive tier, three are in the second most expensive tier, 1 is in the third most expensive tier, and 1 is in the fourth most expensive tier. Our two honorable mention states wind up in the most expensive and the 2nd most expensive tiers. Now, let's reorder our eight most competitive states from cheapest premiums to most expensive and note how many insurance benefit mandates each had in 2008:

Colorado (49)
Michigan (26)
Missouri (39)
New York (55)
Wisconsin (34)
Arizona (29)
Oregon (36)
Texas (54)

No real obvious pattern there. The same would be true if you looked at state liability report cards: the most and least expensive markets on our list, Texas and Colorado, both have the highest grades for medical liability climate, while the 2nd cheapest and 2nd most expensive, Michigan and Oregon, both get D's for their liability climate, and so on.

The lesson here is that simply having more insurers in the market (i.e. more competition) or fewer benefit mandates isn't the silver bullet that will give you lower premiums.

Here's an interesting example for you. On that benefit chart, you'll notice that the state with the highest number of mandates (63) is Maryland. Maryland also doesn't have a particularly competitive market: its top five carriers cover 90 percent of its market (with its largest carrier covering more than half of the state's population). It also gets a D for its medical liability climate. And yet, as I've noted before, it has the lowest group premiums (as a percentage of household incomes) in the nation. I discussed in that linked thread why that's the case and--to ruin the punchline--it's not due to deregulation.

That will bring to reimbursement rates frankly because providers won't have a choice. Reimbursement rates are what they are because they know the insurance companies can afford it. Haven't you ever noticed that if you told a hospital you wanted to pay cash for care your bill will likely be less than what the charge the insurance company? That's what would happen when the cost of plans goes down.

Insurers can't afford these reimbursements. That's why, as noted above in this thread, they have to keep raising premiums by double digits to keep up in numerous states. On average, providers mark up their services 182% beyond the actual costs of providing them. Let me steal a few lines from a Health Affairs paper published earlier this year that looked at how provider market clout in California is driving up costs there:

It has become common in the parlance of health plan–provider relations to refer to "must-have" providers—especially hospitals—that must be included in a plan’s provider network to make the plan acceptable to customers. "Must-have" hospitals, by definition, have market leverage over health plans, because plans cannot plausibly threaten to exclude them. Importantly, "must-have" providers’ strong negotiating position is not necessarily derived from size but rather by factors not typically part of antitrust analysis. That is, they are "must-have" for reasons other than large market share.​

Now look at it from that provider's viewpoint: are there "must-have" insurers, particularly in an increasingly fragmented market populated by smaller pools?

Frankly, I don't know how you can credibly make the argument that weakening the bargaining position of one player at a negotiating table will obviously result in a more favorable deal for him.

The goal isn't necessarily to 'dent their market share'. The hope would be that by removing government regulation on what they can and can't cover, it would allow for better customization of plans for the consumer. If Blue Cross for example did a good job of that, they could concievably gain market share while still lowering the cost of their plans.

It sounds like you're just looking for an excuse to shed risk and benefits, regardless of the consequences for health, equity, and cost distribution (who pays when someone declares personal bankruptcy because their insurance coverage couldn't pay for medical problems they developed?). I suppose that's fine as long as no one ever has any serious health problems. Keep your fingers crossed on that one.

 

[Oddball]

Yep...Gotta justify and rationalize that medical care fascism, no matter how many smoke-blowing text walls need to be tapped out.

 

[Oddball]

Geez, Pinkbeard....Does your ass really hurt that bad when your collectivist technocrat text walls get so easily shot to pieces by a few very basic questions?

 

[The T]

Private" insurers, issuing policies which are fully compliant with federal mandates for which coverages will be offered and to whom....Otherwise, they wouldn't be allowed into the "private" health insurance exchanges.

And? Name a state in which health insurance products are currently unregulated. Hmm, it looks like by your definition there aren't any "private" insurers in existence anyway, nor have there been for some time.

Much to your delight. You seem to revel in ham-fisted government control over just about everything.