ObamaCrapCare has so many unintended consequences that an entire blog could be used for a year to lay out its deficits. In the following posting by Michael Barone, he discusses an issue that most people who are not involved with employers, HR departments and the like would ever have thought about, including the "architects" of ObamaCrapCare.
Employer's second largest cost, more than raw materials and plant and equipment, is health insurance. To be able to cut this expense drops significant dollars directly to the bottom line. If this can be done with out impacting retention, it is a major plus.
There are a number of industries where turnover is high and training minimal that can afford to provide bare bones plans, as allowed by ObamaCrapCare, those companies will be able to increase their profits and still comply with the law. The problem is that these plans, as designed by the Washington brain trust, are not what you would buy if you had the choice.
As with most things in life, health care cost and benefits usually have a high degree of correlation. If you want a program that is top of the line with few deductibles and low co-pays it will be expensive. On the other hand if you want a plan with a very high deductible (such as $10,000 or $20,000) and co-pays (as low as 50% for another $10,000), those plans are currently available and the cost is low. However, after January first that whole landscape changes.
On the first of the year, the highest deductible available will be $2500. The benefits for that plan vary, however, most will have limited visits to the doctor (2-6 per year per person), generic drugs only, and additional co-pays for hospital stays and outpatient care. It will be a very poor plan. It will cover the "essential" benefits but not much else.
As an example, over the past six weeks, yours truly has been fighting kidney stones. It is not a life or death issue, however, we have had three visits to the ER for pain, one lithotrypsy procedure (outpatient) and a stent removal (also out patient.) We have been to see doctors four times. We have not received the bills yet, however, it would not surprise us to see charges in excess of $10,000. If we had had one of the skimpy plans to which Barone writes, the we would be saddled with most of that cost.
Most people who are now praising ObamaCrapCare have not looked at the unintended outcomes. Employers will do what they can to lower costs, meaning less in benefits. Those who can will end their reliance on private insurance and will tell their people to go to the exchanges and gladly pay the lesser fine for not providing the insurance.
After a couple years of trying to keep private insurance, employers who want to take care of their employees will be forced for economic and survival reasons to send their employees to the exchanges. They won't like to do it, but will forced to do so by their competition.
Within 6 years, we suspect by 2020, most private insurance will be gone. Insurance companies will find that they cannot profitably produce and manage the product and they will get out of the market. The only remaining segments that will exist will be government and union plans (we wonder how they got so lucky??) as well as those "cadillac" plans that will still be available for the wealthy. The rest of us will have ObamaCrapCare.
Initially it will be low skilled workers who get shafted but it will not be long before the rest of us get to see how bad health care can really become under Obama's nightmare.
Conservative Tom
Employer's second largest cost, more than raw materials and plant and equipment, is health insurance. To be able to cut this expense drops significant dollars directly to the bottom line. If this can be done with out impacting retention, it is a major plus.
There are a number of industries where turnover is high and training minimal that can afford to provide bare bones plans, as allowed by ObamaCrapCare, those companies will be able to increase their profits and still comply with the law. The problem is that these plans, as designed by the Washington brain trust, are not what you would buy if you had the choice.
As with most things in life, health care cost and benefits usually have a high degree of correlation. If you want a program that is top of the line with few deductibles and low co-pays it will be expensive. On the other hand if you want a plan with a very high deductible (such as $10,000 or $20,000) and co-pays (as low as 50% for another $10,000), those plans are currently available and the cost is low. However, after January first that whole landscape changes.
On the first of the year, the highest deductible available will be $2500. The benefits for that plan vary, however, most will have limited visits to the doctor (2-6 per year per person), generic drugs only, and additional co-pays for hospital stays and outpatient care. It will be a very poor plan. It will cover the "essential" benefits but not much else.
As an example, over the past six weeks, yours truly has been fighting kidney stones. It is not a life or death issue, however, we have had three visits to the ER for pain, one lithotrypsy procedure (outpatient) and a stent removal (also out patient.) We have been to see doctors four times. We have not received the bills yet, however, it would not surprise us to see charges in excess of $10,000. If we had had one of the skimpy plans to which Barone writes, the we would be saddled with most of that cost.
Most people who are now praising ObamaCrapCare have not looked at the unintended outcomes. Employers will do what they can to lower costs, meaning less in benefits. Those who can will end their reliance on private insurance and will tell their people to go to the exchanges and gladly pay the lesser fine for not providing the insurance.
After a couple years of trying to keep private insurance, employers who want to take care of their employees will be forced for economic and survival reasons to send their employees to the exchanges. They won't like to do it, but will forced to do so by their competition.
Within 6 years, we suspect by 2020, most private insurance will be gone. Insurance companies will find that they cannot profitably produce and manage the product and they will get out of the market. The only remaining segments that will exist will be government and union plans (we wonder how they got so lucky??) as well as those "cadillac" plans that will still be available for the wealthy. The rest of us will have ObamaCrapCare.
Initially it will be low skilled workers who get shafted but it will not be long before the rest of us get to see how bad health care can really become under Obama's nightmare.
Conservative Tom
There are three levels. Neither individuals nor employers are required to buy the Bronze level (which is actually very good compared to NO INSURANCE, which is what 30 MILLION Americans have now). However, for those who want, and can afford, a higher benefits package, they may opt for Silver or Platinum plans. If we are going to have an honest discussion about this, let's talk about it factually. As far as private insurance companies getting forced out by Obamacare, I have already offered you the $20 bet that UnitedHealthCare will be thriving in 5 years. You turned down the bet.
ReplyDelete--David
Actually there are four levels. they are Bronze, Silver, Gold and Platinum. Each level has certain required benefits and premiums can only vary by 2% above or below the "target premium."
ReplyDeleteHuman beings as they are usually going to opt for the lowest premium, not the highest (unless they are very rich.) I have sold this stuff for 26 years and people when given a choice between a richer plan and a cheaper (and I mean cheaper) will 90% of the time opt for the cheeeeeeaaapest. They will disregard the amount of dollars that they will have to pay if they have a sickness or injury, will ignore the amount of visits they get under the plan, will ignore most of the benefits. They want it cheap.
My guess is that 75% of the people when offerred ObamaCrapCare will opt for the bronze, poor plan. That would be an interesting study!
The reason I would not take your bet on UnitedHealthCare is that we do not know if Obama Crap Care will still be around as it is currently configured in 5 years. if it is, UHC will be gone. However, if ObamaCare is modified and the unrealistic constraints on claims verses premiums received is removed and the "stupid" is removed from the plan, they might still be here
Yes, most people will be on the Bronze plan because, as you say, it is the cheapest and many can't afford better. If I could afford a Mercedes, I wouldn't buy a Chevy! My only point was that the levels do allow those who want (or need for health reasons) the other levels may choose them.
ReplyDeleteTell me what the "unrealistic constraints on claims verses premiums" is in the law, specifically. We can still make the bet with the contingency that the bet is void, if that happens. Deal? If not, tell me what other requirements you have. UnitedHealthCare isn't going out of business no matter what changes happen with Obamacare. I am 100% sure of that.
--David
The constraints I mentioned are the requirement that a company must return premium if they do not spend 80 or 85% of their premiums for claims. This is a stupid and uninformed requirement. In one year claims experience might be very positive and the next the company could get hammered with claims 130%, 150% or even 200% of premiums collected. The first year they would have to return premiums and the second they get no relief. The plan might have worked if they used a rolling 5 or 10 year average. That might have made sense as the year to year variances would have been smoothed. This one clause will make many companies drop out of the health insurance market. Only one year could wipe out may good years.
ReplyDeleteIn fact when Hurricane Andrew hit Florida years ago, Allstate had more claims dollars paid out than they collected in premiums over the past 40 years. Yes, that is not health insurance, however, we could have a major health crisis--a pandemic for example--that could put many companies out of business.
I doubt that United HealthCare will go out of business, however, if ObamaCrapCare does not change, it will be out of the health insurance business by 2020. That is the bet. They have already pulled out of California--the largest market!
We may both be dead by 2020, but I will take the bet.
ReplyDeleteOne of us doesn't understand how the medical loss ratio rule works. My understanding is that the more claims the have to pay out in a given year, the less likely they would have a penalty. The penalty comes when the spend huge sums of money for advertising (I am sick of those damn UnitedHealthCare public relations TV ads they run constantly) or on lavish salaries and bonuses for their CEO and top management. In a year where they had to pay out an unusually high amount of claims, their medical loss ratio would be more favorable (i.e., less likely to result in penalty) than when they their claims were lower.
http://www.hhs.gov/news/press/2010pres/11/20101122a.html
Anyway, the penalty obvious needs to be set higher in order to force outfits like UHC to pay out a higher percentage of our legitimate claims (like mine!!), because they have been paying back billions in penalties rather than cut their exorbitant personal incomes and ad budgets. It is the same problem the Wall Street regulators have with Goldman Sachs. They paid a $500 million fine for their securities fraud, and still made a big profit on the deal. The mentality at the UnitedHealth and most of the other largest for-profit health insurance companies toward "penalties" is the same as that of Goldman Sachs.
--David
You are mistaken on the medical loss ratio and how claims run for insurance companies. The major problem is that it is a year to year measure. Claims can be high and low in any given year. One year claims could be 60% of premiums requiring the insurance company to return 20-25% of premiums collected. The next year claims could be 150% of premiums. In the latter case, the insurance company cannot recover the the excessive claims, it is a total loss. If a company had a couple years of bad claims, it could bankrupt them. That is not good policy, but it is what the ObamaCrapCare designers want, a single payer!
ReplyDeleteI do not know the basis for your concerns over United Health Care, my experience with my clients has been very positive. I sell them all the time. No problems with claims in the several hundred clients. There must be something wrong with your doctors coding, your understanding of the plan or something else.
Okay, so now it is clear that you don't understand the HHS rule. Here it is..
ReplyDelete"New regulations issued today by the Department of Health and Human Services (HHS) require health insurers to spend 80 to 85 percent of consumers’ premiums on direct care for patients and efforts to improve care quality."
http://www.hhs.gov/news/press/2010pres/11/20101122a.html
The penalty happens only if they spend LESS than 80-85%. United Healthcare is among the worst of the worst on medical loss ratio. To protect their high salaries and big advertising budgets, they gladly pay millions in customer rebates all over the country. But I would rather have them pay my damn claims than give me a stinking cash rebate. My doctor DID code the form correctly! We spend many hours on the phone with United Healthcare to confirm the code number, and I watched the doctor with my own eyes put the code on the form year after year. Their claims people deliberately deny many legitimate claims to boost their gross profits. That is why their medical loss ratio is among the worst in the industry. United Healthcare sucks. We dumped them. Our new health insurance company is doing a great job for us. I had a $60,000 health claim with them this year. They paid all the claims with zero hassles. If it were United Healthcare, it would have been a nightmare getting them to pay.
--David
I understand this rule. It is you who has not thought about or knows enough about the rule to make a statement. You do not understand insurance and think of it as a piggy bank that you can raid anytime for any reason. You probably had a plan that did not cover certain things in an effort to bring down the premium and you are blaming the insurance company for something you are unwilling to admit was your mistake for choosing the wrong program.
ReplyDeleteYour doctor did not code the form someone in his office did. You did not spend hours on the phone getting the right codes. Stop the hyperbole!
What is the reason that United used to decline your claims?
The rule is not that hard to comprehend. If you pay more than 80-85% in claims, you pay no rebates to customers. You only pay rebates if your medical loss ratio falls below that level. In the example you were using, if the company ever had to pay 100% or more in claims, no rebate would be required under Obamacare.
ReplyDeleteAs a major insurer, I expect United Healthcare has around the same mix of customers and claims as other major insurers. But their medical loss ratio is among the worst. That is because they screw around with other people the same way they did with us for years. Yes, it did take hours. Phone doctor. They refer you to UHC. Call them. They tell you to tell the doctor to resubmit. We went through multiple episodes of the same run-around. After the first year, I knew what the code was, my doctor knew what the code was, I WATCHED HIM WRITE THE CODE on the form. We still had the same resistance from them. They DID finally pay all the claims, but we had the same fight with them over it every year. Their strategy is to wear you down to the point where you just give up. I am sure it works for them with a lot of people, but not me. If you don't believe me, go check their medical loss ratio compared to Blue Cross or any reputable company.
--David
I went looking for objective proof that most United Healthcare customers think that UHC service sucks compared to their competition. J.D. Powers did a customer satisfaction survey of 33,000 customers all over the country. The conclusion? United Healthcare sucks! They are the worst of the major insurers….
ReplyDeletehttp://www.jdpower.com/consumer-ratings/healthcare/ratings/909201498/2013-Member+Health+Plan+Study/index.htm
For example, look at the providers here in the Pacific Northwest. That's why I switched from UHC to Group Health. Or look at the results in your state of Michigan. They are in last place in Michigan by a WIDE margin. I rest my case.
--David