California introduces Covered CA; Obamacare Exchange is Cheaper than Anticipated

[palehorse]

The Forbe's article is not making an apples to apples comparison. If you buy health insurance from ehealthinsurance.com in 2013, the health insurance company can screen you based on pre-existing conditions and accept who they want, whereas in 2014 the exchange plans won't be able to do that and must accept everyone.

To illustrate the point: It is fairly wide known that for a given year, ~20% of the population is responsible for ~80% of healthcare spending. So If you make the following assumptions:
1. pre-existing 20% don't rotate around the population
2. health insurance companies could screen the pre-existing 20% perfectly
3. premium have perfect correlation with the healthcare expense for the individual
4. reduced the population to 5 people and total healthcare cost of the population to $100, just to make the math easier to follow.

Then for health insurance from ehealthinsurance.com in 2013, they would accept the 4 healthy people with an average premium of (20% of $100)/4 or $5 and the one pre-existing individual would be screened out or pay a much higher rate than the one advertised of $80 or sign a waiver to get the $5 premium but have to pay the pre-existing cost out of pocket. For exchange plans in 2014, all five people would be accept and pay $100/5 or $20. In this example the 4 healthy people had their premiums go up from $5 to $20 or a 300% increase and the one pre-existing person's premium goes down from $80 to $20 or a 75% cut in price. Now my assumptions 1-3 aren't true in the real world, though health insurance companies try their best to do assumptions 2 and 3. As result this represents an upper bound to the increase due to removing the ability to screen on pre-existing conditions.

This may be nit picky. But without the bold words, the copay would be 6400 a year later because you would be in a different benefit year. Considering that 40% of americans live "paycheck to paycheck" and the low savings rates of americans, I have my doubts on how many could afford a sudden $1,000 car repair bill, let alone 6400 or 12800 copay on short notice.

Thank you for proving the point that most of our rates ("we" being the "healthy people" ) are going to increase dramatically -- wayyyy beyond what they've already increased on a annual basis -- in order to subsidize everyone else even more than we already are. Hell, in your fictitious example, it's by as much as 300%!!

I, for one, am not cool with that... at all. I want nothing to do with your (or Obama's) socialized medicine bullshit.

If this entire debacle causes my employer to drop their share of coverage, which would ultimately hurt MY FAMILY, things are going to get real ugly for you assholes who support this nonsense... unless, of course, YOU personally are willing to pay any/all dramatic cost increases that my family incurs as a result of Obamacare? No? I didn't think so.

But thank you, again, for proving my point.

 

[Attic]

I still don't see what's to keep the young healthy singles from putting money towards a nice BMW or Mercedes lease payment instead of Obamacare, and opting for the small fine each year, and then when they get seriously sick or dying they simply jump in Obamacare at subsidized rates due to non denial get treated,.. and then do the same thing until they are 40 and want health insurance full time.

My rates will be up ~50% when this kicks in btw. The OP regarding 2% max increase is something I can't square. I expect it to perhaps be higher. I'll consider paying the fine instead for the first few years.

 

[palehorse]

I still don't see what's to keep the young healthy singles from putting money towards a nice BMW or Mercedes lease payment instead of Obamacare, and opting for the small fine each year, and then when they get seriously sick or dying they simply jump in Obamacare at subsidized rates due to non denial get treated,.. and then do the same thing until they are 40 and want health insurance full time.

My rates will be up ~50% when this kicks in btw. The OP regarding 2% max increase is something I can't square. I expect it to perhaps be higher. I'll consider paying the fine instead for the first few years.

I thought they were making the tax penalty equivalent to the Bronze or Silver plan (annually), therefore making it essentially pointless to select the penalty instead? Is that not the case?

 

[Attic]

I thought they were making the tax penalty equivalent to the Bronze or Silver plan (annually), therefore making it essentially pointless to select the penalty instead? Is that not the case?

I believe that is the intended policy, but not to be fully realized until 2018-2020. For the beginning years the fine is quite small IIRC.

When/If fully realized to a price equivalent to a years worth of the bronze/silver. I'm not convinced the fines will be enforced with any success when they are trying to collect substantial sums from folks who just don't have the money.


Health care costs need to be lowered one way or another,.. my main gripe with Obamacare is I didn't see anything to address the biggest problem,.... yet.

 

[sactoking]

I still don't see what's to keep the young healthy singles from putting money towards a nice BMW or Mercedes lease payment instead of Obamacare, and opting for the small fine each year, and then when they get seriously sick or dying they simply jump in Obamacare at subsidized rates due to non denial get treated,.. and then do the same thing until they are 40 and want health insurance full time.

My rates will be up ~50% when this kicks in btw. The OP regarding 2% max increase is something I can't square. I expect it to perhaps be higher. I'll consider paying the fine instead for the first few years.

They can't. If you miss open enrollment you can't buy in the exchange until the nest year's open enrollment unless you have a qualifying event. In many states if you miss open enrollment you won't be able to buy off the exchange either, or you will be subject to an extended waiting period. The fear of people "buying insurance on the way to the hospital" is not realistic.

I thought they were making the tax penalty equivalent to the Bronze or Silver plan (annually), therefore making it essentially pointless to select the penalty instead? Is that not the case?

No. The penalty is multi-faceted, and is essentially a lesser of/greater of/lesser of test (as follows).

The lesser of:
1. The national average cost of a bronze plan for your family size; or
2. The greater of:
a. 1% of your income (in 2014. 2% in 2015, 2.5% in subsequent years); or
b. The lesser of:
i) 1/12 of the applicable payment amount times the number of months you were without insurance excluding the first period of up to 3 months you were without coverage calculated separately for each adult and dependent in your family and added together; or
ii) 300% of the applicable dollar amount for adults.

Where the "applicable dollar amount" is $95 in 2014, $325 in 2015, and $695 plus the cost of living adjustment for all subsequent years for adults and one half that amount for dependents under age 18.

 

[chucky2]

sactoking,

So say someone single making $25k a year in 2016 decides not to obtain health insurance.

1.) What would be their fine?

2.) Lets say the developed a kidney stone and needed treatment. What happens once Obamacare is fully enacted? He's just an emergency like he is now? Or it's handled differently?

Chuck

 

[sactoking]

sactoking,

So say someone single making $25k a year in 2016 decides not to obtain health insurance.

1.) What would be their fine?

2.) Lets say the developed a kidney stone and needed treatment. What happens once Obamacare is fully enacted? He's just an emergency like he is now? Or it's handled differently?

Chuck

Assuming they went all 12 months without insurance:

The lesser of (following the format above):
1. Let's spitball $250/month, so $250 * 12 = $3,000; or
2. The greater of:
a. $625; or
b. The lesser of:
i) 1/12 * (12 - 3) * $695 = $521; or
ii) $695 * 3 = $2,085.

So the penalty would be $521 (it's less than $695 b/c the first three months uninsured are forgiven).

If the patient was uninsured and developed kidney stones the patient could not get coverage on an exchange without a qualifying life event (like insurance with an employer today). The patient might be able to get insurance off an exchange, without a tax credit, but that is up to the state (or insurer, if the state has no law). Most likely scenario: that will be an uncompensated ER visit.

 

[1prophet]

sactoking,

So say someone single making $25k a year in 2016 decides not to obtain health insurance.

1.) What would be their fine?

2.) Lets say the developed a kidney stone and needed treatment. What happens once Obamacare is fully enacted? He's just an emergency like he is now? Or it's handled differently?

Chuck

better question what quality level of health insurance can someone making 25k a year get without going broke paying the out of pocket fees if they need to use it.

make up your own person and zipcode and plug it in the following site

http://www.ehealthinsurance.com/ehi/ifp/individual-family-health-insurance!goToScreen?referer=http%3A%2F%2Fwww.ehealthinsurance.com%2Findividual-family-health-insurance%3Faction%3DchangeCensus%26census.zipCode%3D&screenName=all-plans#close

As to why healthcare costs so much and it wasn't addressed with this new healthcare law.

http://www.nytimes.com/2013/06/02/h...ds-the-world-in-health-expenditures.html?_r=0

 

[glenn1]

better question what quality level of health insurance can someone making 25k a year get without going broke paying the out of pocket fees if they need to use it.

make up your own person and zipcode and plug it in the following site

http://www.ehealthinsurance.com/ehi/ifp/individual-family-health-insurance!goToScreen?referer=http%3A%2F%2Fwww.ehealthinsurance.com%2Findividual-family-health-insurance%3Faction%3DchangeCensus%26census.zipCode%3D&screenName=all-plans#close

As to why healthcare costs so much and it wasn't addressed with this new healthcare law.

http://www.nytimes.com/2013/06/02/h...ds-the-world-in-health-expenditures.html?_r=0

Even assuming the "typical person" numbers provided in the OP, you need to incur around $5,200 in medical costs in a single year before you reach breakeven presuming no deductible ($3,600/year premium + 70% of eligible expenses).

Breakeven for the "catastrophic" plan is even worse at ~ $7,800 presuming no copays ($1,800/year premiums plus $6,000 deductible). The identical plan ($6k deductible with no copay after ded limit is hit) is available today in CA for $116/month @Blue Shield CA via eHealthinsurance (I used a 23 y.o. male in ZIP 93940 as an example). Thus it's a little over 20% increase under Obamacare given the numbers from the OP.

Again, my earlier point stands - Obamacare isn't "health insurance" in any sense of the word where you're paying modest premiums to cover for unexpected and remote medical risks that are catastrophic in nature. Instead it's a several thousand dollar pre-paid medical expense account that covers routine and expected medical care, and also obliges the purchaser to accept a very expensive rider fee to obtain a discount plan on expensive procedures. It's a timeshare real estate sales model applied to medical care.

 

[chucky2]

Assuming they went all 12 months without insurance:

The lesser of (following the format above):
1. Let's spitball $250/month, so $250 * 12 = $3,000; or
2. The greater of:
a. $625; or
b. The lesser of:
i) 1/12 * (12 - 3) * $695 = $521; or
ii) $695 * 3 = $2,085.

So the penalty would be $521 (it's less than $695 b/c the first three months uninsured are forgiven).

If the patient was uninsured and developed kidney stones the patient could not get coverage on an exchange without a qualifying life event (like insurance with an employer today). The patient might be able to get insurance off an exchange, without a tax credit, but that is up to the state (or insurer, if the state has no law). Most likely scenario: that will be an uncompensated ER visit.

OK, thanks for that. I guess I'm not understanding then what's going to prompt the millions of people (many of them young-late 20's/30's) who because they haven't had any real medical problems yet in life, decide to just keep their money for the next cell phone/computer/TV/etc and pay the $521 while simultaneously rolling the dice on not having any medical problems. Or, even someone who is living correctly but decides that their car needs a new transmission (or heck, a new used car) and the money would be better spent elsewhere. They can still walk into the ER just like they've always done. What's going to cause these folks to actually pay for a health insurance plan?

Chuck

 

[piasabird]

Penalties are based on income level.

I could say I dont pay anything for healthcare where I work, but I still have a copay and whatever the insurance company decides they will not cover. Then there are the liars the do the billing for places like a hospital that will claim a 2 day stay in a hospital or an emergency room visit is like $5k-$10k. The overcharging by hospitals and doctors is what drives up costs.

 

[dali71]

Funny how First has avoided his thread like the plague since the truth came out. :biggrin:

 

[xBiffx]

Funny how First has avoided his thread like the plague since the truth came out. :biggrin:

You noticed that too, huh?