California introduces Covered CA; Obamacare Exchange is Cheaper than Anticipated

[s0me0nesmind1]

Very interesting data point from the California Covered website:

So undocumented immigrants are exempt from the coverage requirements and penalties?! lolwowwhut?!

This just gets better every time I look up!

... Undocumented immigrants are exempt for uhh... a pretty obvious reason...

Who do you send the bill to? Oh just look him up by social security num-- oh wait... well then just look him up in the system by na-- oh wait. Look just send the bill to his address! Oh wait...

California isn't the sharpest tool in the shed. Take out the innovations of silicon valley and you have an abomination set for doom with their level of state debt and housing crisis.

 

[sactoking]

I didn't read most of the replies since, well, they didn't appear to be too constructive. I will say that the article is in part misleading. There have been other articles on the matter that have done a slightly better job, but even those are misleading in part.

One key item left out of the article in the OP: Only one major national player, Anthem, is participating in California's exchange. All of the others are sitting out because Covered California has made some really poor policy decisions. The insurers in the exchange are smaller, regional ones, many of which operate only in California; they pretty much have to be in the exchange. Given that, the anticipation is that Kaiser will knock most of them out within a couple of years due to pricing (since Kaiser owns their own providers) and Covered California will be begging Aetna and UHC to enter.

Another item related to the first is solvency. The article mentions that prices are lower because the insurers are trying to grab market share. That means that the rates are inadequate and the smaller ones will be relying on the risk corridor/risk adjustment/reinsurance programs to keep them afloat. Only the risk corridor program can really be calculated in advance so a sustained strategy of insufficient rates for market share will lead to insurer insolvency.

Item number three is the erroneous way they've spun pricing in the article; they say that in many cases premiums are going down when in reality they just aren't going up as much as originally thought. That's a huge difference and reflects the idiotic government accounting mentality many have (where increasing spending less than you want is seen as a spending cut).

Item number four is something every article I've seen gets wrong: if you parse language you'll note that they all say the "least expensive" or "second-least expensive" silver plan is what they're using to price compare. The problem is they're comparing that to current average prices. You can't compare an average to a component of an average and have meaningful discourse.

 

[xBiffx]

I'd be interested in seeing real numbers. I'm not doubting you, I'm genuinely curious.

Was it your monthly MediCare premium that doubled? Or was it out of pocket costs like co-pays etc that doubled? I assume you are reffering to cost increases from 2012-2013 that it doubled?

Found it. Quarterly premiums went from $175 to $300. Yes this was 2012-2013. The really dumb part was Tricare only cost $20/mo but that has to become secondary insurance and medicare is primary because medicare isn't optional. Very stupid.

By the way, this is my mother's insurance. I indicated first hand knowledge because she is retired and in bankruptcy proceedings and I handle all her finances. So all of her financial statements come to me since she obviously sucks with money. Not that this matters but people were assuming this was for me. Sorry to disappoint but I'm not that old, yet.

 

[monovillage]

I didn't read most of the replies since, well, they didn't appear to be too constructive. I will say that the article is in part misleading. There have been other articles on the matter that have done a slightly better job, but even those are misleading in part.

One key item left out of the article in the OP: Only one major national player, Anthem, is participating in California's exchange. All of the others are sitting out because Covered California has made some really poor policy decisions. The insurers in the exchange are smaller, regional ones, many of which operate only in California; they pretty much have to be in the exchange. Given that, the anticipation is that Kaiser will knock most of them out within a couple of years due to pricing (since Kaiser owns their own providers) and Covered California will be begging Aetna and UHC to enter.

Another item related to the first is solvency. The article mentions that prices are lower because the insurers are trying to grab market share. That means that the rates are inadequate and the smaller ones will be relying on the risk corridor/risk adjustment/reinsurance programs to keep them afloat. Only the risk corridor program can really be calculated in advance so a sustained strategy of insufficient rates for market share will lead to insurer insolvency.

Item number three is the erroneous way they've spun pricing in the article; they say that in many cases premiums are going down when in reality they just aren't going up as much as originally thought. That's a huge difference and reflects the idiotic government accounting mentality many have (where increasing spending less than you want is seen as a spending cut).

Item number four is something every article I've seen gets wrong: if you parse language you'll note that they all say the "least expensive" or "second-least expensive" silver plan is what they're using to price compare. The problem is they're comparing that to current average prices. You can't compare an average to a component of an average and have meaningful discourse.

As always, thank you for your informed posts on this subject. It's a real benefit to this forum to have your input on this tough issue.

 

[First]

I see you are narrowly defining the topic again. How many loans are directly given or backed the federal govt? You know exactly what I am bringing about the education bubble. Quit dancing.

Huh? No, you'll actually have to be specific about your nonsense. Your point about federally backed loans is a recent phenomenon, only since 2010 was it given exclusivity. Higher education costs have been going up well before 2010. Additionally, the interest rates are hardly different enough from market rates as to somehow suggest the federal gov't magically increased tuition costs. Frankly, the link between increasing loan availability and the higher education price increases we've seen is tenuous at best.

That would certainly make is a success in your book.

Single payer is a success around the world, FYI.

I am only using your definition of success to apply to programs you dont like. If you dont like it, decide your definition for success is pretty fucking stupid.

Your definition is not the one I'm using, though.

Well does is add to the deficit? It costs americans something.

What does it "cost" Americans? Specifically. For example, how did last year's $1T deficit "cost" me, an everyday American?

And does it add to health care costs? Does it add to american's premiums? Does it add costs to business plans? Does it add costs to business,healthcare and insurance providers to comply with regulations? Does it affect part time workers hours? Well then it cost Americans something.

It does almost none of those things, so no. Adding costs to businesses, as one example, has not resulted in any discernible fewer jobs or fewer hours. If you think so, you should link that shit from credible sources. Just saying it without contextualizing it means nothing. Complying with regulations is the cost of Western industrialization, though yes, we'd all like as few regulations as possible. Unfortunately our robust private economy is difficult to regulate, a consequence of our success and freedom.

Whether I fail at economics or not is irrelevant here. We are applying your measure of success to other markets. Seems to have a problem with your definition if you dont like it.

You don't understand the concepts you're trying to convey. 70's price controls created price ceilings that don't apply in this scenario, as the ACA rates are negotiable among state exchanges while the shortages of the 70's were not and most importantly, were globally impacted by the massive externality known as OPEC. Is there an OPEC-like influence here with ACA? Not unless you're, um, making up reality as you go along.

 

[First]

Very interesting data point from the California Covered website:

So undocumented immigrants are exempt from the coverage requirements and penalties?! lolwowwhut?!

This just gets better every time I look up!

You have to be somewhat brain damaged and/or extraordinarily partisan to think the states or the IRS have the authority to tax non-American citizens.

 

[DCal430]

I didn't read most of the replies since, well, they didn't appear to be too constructive. I will say that the article is in part misleading. There have been other articles on the matter that have done a slightly better job, but even those are misleading in part.

One key item left out of the article in the OP: Only one major national player, Anthem, is participating in California's exchange. All of the others are sitting out because Covered California has made some really poor policy decisions. The insurers in the exchange are smaller, regional ones, many of which operate only in California; they pretty much have to be in the exchange. Given that, the anticipation is that Kaiser will knock most of them out within a couple of years due to pricing (since Kaiser owns their own providers) and Covered California will be begging Aetna and UHC to enter.

Another item related to the first is solvency. The article mentions that prices are lower because the insurers are trying to grab market share. That means that the rates are inadequate and the smaller ones will be relying on the risk corridor/risk adjustment/reinsurance programs to keep them afloat. Only the risk corridor program can really be calculated in advance so a sustained strategy of insufficient rates for market share will lead to insurer insolvency.

Item number three is the erroneous way they've spun pricing in the article; they say that in many cases premiums are going down when in reality they just aren't going up as much as originally thought. That's a huge difference and reflects the idiotic government accounting mentality many have (where increasing spending less than you want is seen as a spending cut).

Item number four is something every article I've seen gets wrong: if you parse language you'll note that they all say the "least expensive" or "second-least expensive" silver plan is what they're using to price compare. The problem is they're comparing that to current average prices. You can't compare an average to a component of an average and have meaningful discourse.

Their is nothing wrong with these regional providers. These regional providers are the ones the state and local governments use to provide healthcare for their employees, so these aren't irreverent insurers. Some of these regional providers insure millions of Californians each already.

National providers have very low participation when it comes to healthcare for civil servants in California, and it has been fine. So I don't see a big deal with it for this exchange.

 

[First]

I didn't read most of the replies since, well, they didn't appear to be too constructive. I will say that the article is in part misleading. There have been other articles on the matter that have done a slightly better job, but even those are misleading in part.

One key item left out of the article in the OP: Only one major national player, Anthem, is participating in California's exchange. All of the others are sitting out because Covered California has made some really poor policy decisions. The insurers in the exchange are smaller, regional ones, many of which operate only in California; they pretty much have to be in the exchange. Given that, the anticipation is that Kaiser will knock most of them out within a couple of years due to pricing (since Kaiser owns their own providers) and Covered California will be begging Aetna and UHC to enter.

Another item related to the first is solvency. The article mentions that prices are lower because the insurers are trying to grab market share. That means that the rates are inadequate and the smaller ones will be relying on the risk corridor/risk adjustment/reinsurance programs to keep them afloat. Only the risk corridor program can really be calculated in advance so a sustained strategy of insufficient rates for market share will lead to insurer insolvency.

Item number three is the erroneous way they've spun pricing in the article; they say that in many cases premiums are going down when in reality they just aren't going up as much as originally thought. That's a huge difference and reflects the idiotic government accounting mentality many have (where increasing spending less than you want is seen as a spending cut).

Item number four is something every article I've seen gets wrong: if you parse language you'll note that they all say the "least expensive" or "second-least expensive" silver plan is what they're using to price compare. The problem is they're comparing that to current average prices. You can't compare an average to a component of an average and have meaningful discourse.

Which poor policy decisions did Covered CA make, in your estimation? I'd like to know personally.

 

[DCal430]

I should also point out that these regional insurers represent the largest insurers in the state. That Cigna, aetna, and uhc presence in california is low. They are not major players in california health insurance industry.

 

[First]

^ True, though I'd like to know why they haven't participated historically, before ACA. sactoking probably knows.

 

[sactoking]

Their is nothing wrong with these regional providers. These regional providers are the ones the state and local governments use to provide healthcare for their employees, so these aren't irreverent insurers. Some of these regional providers insure millions of Californians each already.

National providers have very low participation when it comes to healthcare for civil servants in California, and it has been fine. So I don't see a big deal with it for this exchange.

Which poor policy decisions did Covered CA make, in your estimation? I'd like to know personally.

I should also point out that these regional insurers represent the largest insurers in the state. That Cigna, aetna, and uhc presence in california is low. They are not major players in california health insurance industry.

^ True, though I'd like to know why they haven't participated historically, before ACA. sactoking probably knows.

Regional insurers, even ones with a large base in a state like CA, are more prone to insolvency because their risk exposure isn't sufficiently broad. The advantage the nationals have is that their risk base is geographically broadened such that morbidity risk is better controlled. While I'm not trying to say that CA using regional insurers guarantees issues I am saying that it increases the probability. Reserves have to be extraordinarily high to properly account for potential morbidity shock (especially that inherent in ACA Year One) and regionals typically don't have the level of reserves to written premium that a national will have. Example using spitball numbers: a regional might write $30mm in premium and have $15 in reserve while a national might write $30mm in premium in CA and have $250mm in reserve. The national can bleed its national reserve to cover unexpected losses in CA while a regional can't.

It has been relayed to me that CA's decision to go with an active purchaser model, along with their decision to only approve standardized plans, hurt their pull with the nationals. Standardized plans are great for consumers because they make apples-to-apples comparisons easy but they are terrible for insurers because they ensure price is the #1 competitive factor. When price is the primary competitive factor it becomes extremely difficult to price products since there tend to be clear-cut "winners" and "losers"; an insurer might price a plan thinking it will get 15% market share but then it turns out to be the least expensive plan and gets 60% market share. If the loss profile of the market share is poor then you have an insufficient rate and will bleed reserves through claims costs. If you're a regional without a large reserve to cushion any given year then a small mistake in pricing becomes magnified.

 

[DCal430]

Regional insurers, even ones with a large base in a state like CA, are more prone to insolvency because their risk exposure isn't sufficiently broad. The advantage the nationals have is that their risk base is geographically broadened such that morbidity risk is better controlled. While I'm not trying to say that CA using regional insurers guarantees issues I am saying that it increases the probability. Reserves have to be extraordinarily high to properly account for potential morbidity shock (especially that inherent in ACA Year One) and regionals typically don't have the level of reserves to written premium that a national will have. Example using spitball numbers: a regional might write $30mm in premium and have $15 in reserve while a national might write $30mm in premium in CA and have $250mm in reserve. The national can bleed its national reserve to cover unexpected losses in CA while a regional can't.

It has been relayed to me that CA's decision to go with an active purchaser model, along with their decision to only approve standardized plans, hurt their pull with the nationals. Standardized plans are great for consumers because they make apples-to-apples comparisons easy but they are terrible for insurers because they ensure price is the #1 competitive factor. When price is the primary competitive factor it becomes extremely difficult to price products since there tend to be clear-cut "winners" and "losers"; an insurer might price a plan thinking it will get 15% market share but then it turns out to be the least expensive plan and gets 60% market share. If the loss profile of the market share is poor then you have an insufficient rate and will bleed reserves through claims costs. If you're a regional without a large reserve to cushion any given year then a small mistake in pricing becomes magnified.

The problem is none of the other national insurers actually do any signficant business in California. They lack the partcipation of major medical groups.

 

[sactoking]

The problem is none of the other national insurers actually do any signficant business in California. They lack the partcipation of major medical groups.

Which is fine when you can medically underwrite, but when you have to accept anyone and everyone that applies , and at the same premium, it becomes a much bigger issue.

But your point is well-taken, and I think that it more illustrative of the point I'm trying to make, which is that Covered California is not an indicator of heathcare reform nationwide. California has always had a market that lent itself to regionality and didn't reflect the national picture, and apparently 2014 will be the same. Why should Vermont, Idaho, or Florida care one whit about CA?

 

[DCal430]

So in terms of the California market, the largest non-participating national provider is UHG which represents 9% of the Private Healthcare market in California. CIGNA is non existent in California, and Aetna is 2%. UHG also only entered the California market by acquiring a regional provider in the state.

But I do agree, California is 1 state, with its own laws and regulations. How things are in California have little baring on how things will be for other states like Florida.

 

[sactoking]

I might throw out there too that nobody yet knows how the MSPP (Multi-State Plan Participants) will throw things off-kilter. OPM (federal Office of Personnel Management) hasn't announced which states the MSPP will enter, what their plans will be, or how much they will cost. Since the MSPP don't have to conform to state law and the states don't get to approve rates (meaning that the MSPP can come in at the last minute and undercut everyone) that is a huge wildcard that can't be predicted at this point.

 

[First]

Interesting sactoking, that makes sense to me. Regionals don't have to by law have significant reserves though, correct? I would imagine the increased number of mandated additional patients would outstrip the morbidity rate, as you call it, in terms of net profit, because so many additional Californians now must sign up, no? I'm honestly curious, as I don't know the numbers.

 

[Tom]

Bullshit. I can speak firsthand and tell you they have. Also, its crap that it is forced into becoming some people's primary insurance when they already have their own. Especially retired military with Tricare.

It isn't crap to have more Americans getting proper healthcare rather than relying on emergency room care.

In the long run its very apparent that better healthcare for those who currently aren't getting it is cheaper. Not covering those people is the main reason healthcare here is more expensive than other countries.

Along with people who have too much health insurance so they never make any decisions based on cost.

 

[1prophet]

You have to be somewhat brain damaged and/or extraordinarily partisan to think the states or the IRS have the authority to tax non-American citizens.

http://www.factcheck.org/2012/05/tax-credits-for-illegal-immigrants/

Here we should explain that the IRS routinely seeks to collect both federal income taxes and federal payroll taxes from illegal immigrants, who are required to pay regardless of their immigration status. Because such workers don’t qualify for a valid Social Security number, the IRS issues a nine-digit Individual Taxpayer Identification Number. An ITIN doesn’t authorize the user to work legally in the U.S., and doesn’t entitle him or her to Social Security benefits.

 

[palehorse]

http://www.factcheck.org/2012/05/tax-credits-for-illegal-immigrants/

Thank you for posting the link. That is exactly why I thought it strange that CA would explicitly exempt the undocumented immigrants from both the insurance requirement and the penalties for failing to sign up.

Doing so is just plain ridiculous given that covering their care is a significant part of the reason our (legal citizen) rates have skyrocketed... :banghead:

 

[xBiffx]

It isn't crap to have more Americans getting proper healthcare rather than relying on emergency room care.

In the long run its very apparent that better healthcare for those who currently aren't getting it is cheaper. Not covering those people is the main reason healthcare here is more expensive than other countries.

Along with people who have too much health insurance so they never make any decisions based on cost.

Fine. But that isn't what this thread is about. Its about supposed cheaper than anticipated healthcare. That is crap and everyone knows it.

 

[DCal430]

Interesting sactoking, that makes sense to me. Regionals don't have to by law have significant reserves though, correct? I would imagine the increased number of mandated additional patients would outstrip the morbidity rate, as you call it, in terms of net profit, because so many additional Californians now must sign up, no? I'm honestly curious, as I don't know the numbers.

As a proportion I believe they are required to have save reserve requirements. Reserve requirements as based on a proportional basis.

Most regional, which are mostly non-profit tend to far exceed their reserve requirement. For example Blue Shield of California has a reserve requirement of around 300 million, but it actually has over 4 billion in reserves.

 

[DCal430]

...

 

[Agent11]

It's hard to make judgments right now. So much is still up in the air.

 

[bozack]

ahh yes, an article from arguably a liberal circle jerk of a publication bleating about the success of an Obama policy in one of the most liberal states in the nation.

 

[shira]

30% out of pocket will be still unaffordable when the medical bills come in the thousands.

These people have NO insurance pre-Obamacare, and would need to pay 100% out of pocket. So what's your point, exactly?