Wells Fargo drops most employee healthcare insurance options, cites Obamacare *update

[drebo]

It should be a right and government should provide it. And yes, government bureaucrats who report to elected officials should decide who gets what. Comparing it to car insurance is silly. If you can't afford auto insurance rates, you can take the bus. It's inconvenient, but it's not life threatening. If you can't afford health insurance, your health and life is in danger. Free market can't operate in a situation when one of the participants is under threat to life and health. It's no more free market than a bank robbery.

Health INSURANCE is not, has never been, and should not be a "right".

Health CARE, on the other hand, is, and has always been, a "right".

I have no problem with the government providing health care directly to people who need it (see my post above regarding government-run hospitals). I do, however, have a problem with the government picking winners and losers via policy designed to funnel these people through a bunch of useless and expensive middlemen.

Until the government is prepared to provide health CARE directly to people who want to use government-provided health CARE, any and all "reforms" are nothing more than corporate handouts.

 

[woolfe9999]

Another thing to think about, I hear plenty of ads on the radio (not as much on TV, but maybe that's because I barely watch it anymore) for hospitals. They spend plenty of time talking about how great their care is, and how wonderful their staff are, but very rarely do you hear anything about price.
Ads for nearly every other service make note that their prices are the best, but not so in health care because the public never see the prices. And since the prices are so obfuscated there is little competition in that area.

It's actually even worse than just not putting pricing information up front. In many cases they won't even give you prices when you make an inquiry. My father needed a certain surgery and we wanted to shop around and do some comparison on prices as well as other factors relating to quality of care. In most cases, I couldn't even get a ballpark estimate over the phone. They required a visit and consultation first, which itself costed money, before they'd give you a cost estimate.

 

[werepossum]

Health INSURANCE is not, has never been, and should not be a "right".

Health CARE, on the other hand, is, and has always been, a "right".

I have no problem with the government providing health care directly to people who need it (see my post above regarding government-run hospitals). I do, however, have a problem with the government picking winners and losers via policy designed to funnel these people through a bunch of useless and expensive middlemen.

Until the government is prepared to provide health CARE directly to people who want to use government-provided health CARE, any and all "reforms" are nothing more than corporate handouts.

Exactly right. Most things necessarily in life are not automatically supplied by the government unless you cannot provide them for yourself, nor should they be.

It's actually even worse than just not putting pricing information up front. In many cases they won't even give you prices when you make an inquiry. My father needed a certain surgery and we wanted to shop around and do some comparison on prices as well as other factors relating to quality of care. In most cases, I couldn't even get a ballpark estimate over the phone. They required a visit and consultation first, which itself costed money, before they'd give you a cost estimate.

This is a direct result of our shifting the cost of our medical care to other entities, after which we want the best available. And I've found that prices quoted can often be only a fraction of the actual cost once all the unmentioned extras are added.

 

[sactoking]

Exactly right. Most things necessarily in life are not automatically supplied by the government unless you cannot provide them for yourself, nor should they be.


This is a direct result of our shifting the cost of our medical care to other entities, after which we want the best available. And I've found that prices quoted can often be only a fraction of the actual cost once all the unmentioned extras are added.

Indeed, anyone who's ever received bills for hospital, ER doctor, follow-up doctor, trauma team, ambulance, radiology, radiologist, anesthesiologist, lab tests, itemized medical supplies, etc for the same incident knows that medical price quotes are impossible to rely upon.

 

[shira]

Just found out today that Wells Fargo Corporation is dropping all employee healthcare insurance options except for Health Savings Accounts and a High Deductible plan. The company news release and FAQs specifically cited Obama's new healthcare law as a primary reason as well as higher costs generally. This seems to support the recent report that half of employers would drop health insurance or severely limit options in the next couple years. IIRC, the White House went bananas when that came out, angrily denouncing it as untrue. Guess that it's more true than the administration would like to admit. Perhaps it's just the Wells Fargo C-suite types deciding to do this in order to "stick it to Obama," but it's not something that bodes well for Obama's re-election if more companies start taking this option.

Here is the relevant text for those interested; I've had requests to post a copy of the document and while it does not say "for internal use only" it's probably still not a good idea to post it here.

By now you may have heard that Wells Fargo is taking a new approach to your medical plans in 2012. Throughout the continental u.s., we will offer team members two "account based" medical plans: Health Reimbursement Account medical plan; and Health Savings Account medical plan.

Wells Fargo has decided to make this change because rising healthcare costs and the impact of federal healthcare reform require us to take a new approach to managing costs together.

Considering that Obamacare won't be fully in place until 2014, it's pretty amusing to see Wells Fargo claiming that their health insurance changes for 2012 are a response to Obamacare.

My own company has begun offering a Health Reimbursement Account (HRA) medical plan (in addition to a higher-cost, traditional PPO plan), not because of Obamacare but because the structure of such plans front-loads costs on the insured, thereby reducing demand for health services. Thus, employees are given a choice as to which sort of plan they want. I chose the HRA because it will save me a few hundred dollars in premiums each year and my own health care costs are very predictable.

The transition to HRAs is a GOOD thing. Anyone who understands that controlling health care costs is vitally important to the economic health of the U.S. should be applauding such changes, not "blaming" Obamacare.

 

[woolfe9999]

Indeed, anyone who's ever received bills for hospital, ER doctor, follow-up doctor, trauma team, ambulance, radiology, radiologist, anesthesiologist, lab tests, itemized medical supplies, etc for the same incident knows that medical price quotes are impossible to rely upon.

Yes that's true. When I talked to providers over the phone, they told me that there were numerous components to the bill for a surgery, and that the surgeon's fee was only one part of that bill. The trouble is, when I asked if they could tell me just what the surgeon's fee would be, they refused to give me that information saying I had to make an appointment first. In one case, after the consultation, we were told what the surgeon's fee would be, and that the fee was the same for that type of surgical procedure regardless of the patient. The other fees related to length of hospital stay, etc. could vary a lot from case to case but not the surgeon's fee. They couldn't or wouldn't answer me when I asked why they couldn't have just told me the surgeon's fee over the phone given that it was a fixed fee, and why we had to make an appointment and pay them money to get that information.

 

[senseamp]

Health INSURANCE is not, has never been, and should not be a "right".

Health CARE, on the other hand, is, and has always been, a "right".

I have no problem with the government providing health care directly to people who need it (see my post above regarding government-run hospitals). I do, however, have a problem with the government picking winners and losers via policy designed to funnel these people through a bunch of useless and expensive middlemen.

Until the government is prepared to provide health CARE directly to people who want to use government-provided health CARE, any and all "reforms" are nothing more than corporate handouts.

We both agree that health care is a right. :thumbsup: I also agree that Obamacare is far from perfect. But, we have to start somewhere. It's not politically feasible to get to single-payer without going through some of these options first. It would be nice, I agree, but there are enough Liebermans on Insurance company dole to block it.

 

[senseamp]

Yes that's true. When I talked to providers over the phone, they told me that there were numerous components to the bill for a surgery, and that the surgeon's fee was only one part of that bill. The trouble is, when I asked if they could tell me just what the surgeon's fee would be, they refused to give me that information saying I had to make an appointment first. In one case, after the consultation, we were told what the surgeon's fee would be, and that the fee was the same for that type of surgical procedure regardless of the patient. The other fees related to length of hospital stay, etc. could vary a lot from case to case but not the surgeon's fee. They couldn't or wouldn't answer me when I asked why they couldn't have just told me the surgeon's fee over the phone given that it was a fixed fee, and why we had to make an appointment and pay them money to get that information.

Another reason why so called free markets don't work in health care. It's like going to buy a car where the dealer is going to bill you whatever he wants for the car, after you agree to buy it.

 

[charrison]

Another reason why so called free markets don't work in health care. It's like going to buy a car where the dealer is going to bill you whatever he wants for the car, after you agree to buy it.

The problem is the market in health care is heavily distorted. For decaded we have been letting a 3rd pay our medical bills, so the general consumer has no idea what anything costs. As shira pointed out above HSA are fixing this.

I started an HSA a few months ago and cost for most things have been upfront as the doc is getting paid now and not later by insurance. There are still pricing games going on between insurance provider, but it is far more transparent.

 

[sactoking]

Considering that Obamacare won't be fully in place until 2014, it's pretty amusing to see Wells Fargo claiming that their health insurance changes for 2012 are a response to Obamacare.

Why?

First off, "Obamacare" isn't "fully in place" by 2014. The abnormally large chart hanging on the wall at work still lists new requirements being put in place through 2019.

Second, "Obamacare" is partially in place now. The abnormally large chart hanging on the wall at work indicates it started being implemented in 2009.

Third, some of the changes already implemented or soon-to-be-implemented are not changes to sneeze at. IIRC (I'm not at work so I can't reference the abnormally large chart hanging on the wall) "Obamacare" institutes something like $6billion in taxes on the health insurance industry starting in 2012. If you don't think those taxes will get passed on to companies and consumers I have some beach-front property in Oklahoma you might be interested in. Things like no deductible/no coinsurance well-visit checkups and no lifetime maximums are already in place (as of 2010 IIRC) and those drive up premiums costs as well.

Fourth, insurers have incentive to roll out future changes mandated by "Obamacare" before the "go live" date of implementation. As of 2014 insurers will be required to offer certain insurance plans both inside and outside of the state/federal exchanges. These plans must have the same provisions and must cost the same, i.e. no price discrimination, i.e. the premium charged might not reflect the risk assumed. If I were an insurer, I sure as hell wouldn't start marketing those products on 1/1/14 and *hope* my actuarial statistics were correct. No, I'd get state product approval and phase them in over 2012 and 2013 while phasing out products that will be illegal in 2014, thus ensuring that I had a least a modicum of a statistical base to project profitability on in 2014 and beyond. Well, as insurers do that many employers and employees will find that their group plans are either eliminated or modified to more closely comply with future (known) legal requirements and those changes won't reduce costs for the vast majority of Americans.

 

[Lanyap]

Are you referring to this chart?

 

[senseamp]

The problem is the market in health care is heavily distorted. For decaded we have been letting a 3rd pay our medical bills, so the general consumer has no idea what anything costs. As shira pointed out above HSA are fixing this.

I started an HSA a few months ago and cost for most things have been upfront as the doc is getting paid now and not later by insurance. There are still pricing games going on between insurance provider, but it is far more transparent.

It's distorted by definition. One party is under physical duress. Free market only works for elective parts of medicine, boob jobs, lasik, that kind of of stuff, where you can not get the procedure without severe negative consequences to your health. HSA system is idiotic, the whole use it or lose it concept only encourages people to get unnecessary medical care.

 

[charrison]

It's distorted by definition. One party is under physical duress. Free market only works for elective parts of medicine, boob jobs, lasik, that kind of of stuff, where you can not get the procedure without severe negative consequences to your health. HSA system is idiotic, the whole use it or lose it concept only encourages people to get unnecessary medical care.

Well it appears you dont know how an HSA works. HSA is not a use it or lose it, FSA is use it or lose it. HSA must be paired with a high delectable insurance plan.

HSA is actually just insurance and the typical plan pays for nothing until you hit you the deductible. You get lower premium in exchange for higher deductibles. It appears more people and companies are headed this direction as it does generate cost savings.

And most healthcare transactions do not occur under duress.

 

[dullard]

Well it appears you dont know how an HSA works. HSA is not a use it or lose it, FSA is use it or lose it. HSA must be paired with a high delectable insurance plan.

HSA is actually just insurance and the typical plan pays for nothing until you hit you the deductible.

Your first paragraph is correct. An HSA is not use it or lose it. An HSA is use it or keep it forever. That gives customers a strong incentive to not use it (thereby wasting money on needless medical tests/proceedures). It is backed by an insurance policy, so you are still given typical preventative care and covered in case of catastrophic problems.

But your next paragraph's opening line is incorrect. A HSA is NOT insurance. A HSA is essentially the United State's best retirement account. In order to get that retirement account though, you need to buy high-deductable health insurance. They go together but are two entirely separate things. Too bad far too many people don't realize the HSAs massive tax benefits and use it as a temporary saving's account that they underfund and overuse.

 

[sactoking]

Are you referring to this chart?

Ha, no, but the one we have is almost as confusing.

 

[senseamp]

Well it appears you dont know how an HSA works. HSA is not a use it or lose it, FSA is use it or lose it. HSA must be paired with a high delectable insurance plan.

HSA is actually just insurance and the typical plan pays for nothing until you hit you the deductible. You get lower premium in exchange for higher deductibles. It appears more people and companies are headed this direction as it does generate cost savings.

Thanks for the clarification. I don't have a problem with high deductible, I just don't think it's going to solve the big problems with health care costs. Anything major will eat through the deductible almost immediately.

And most healthcare transactions do not occur under duress.

Most healthcare transactions occurs when people are either very sick or scared of becoming very sick. Either physical or emotional duress. Most people don't go to the doctor for fun, they go out of pain or fear.

 

[trenchfoot]

"Obamacare". It's as if the Repub's fingerprints aren't all over it, with the results of their watering it down, bastardizing it, emasculating it and monkeying around with it every which way they could to keep the profits rolling in for the Health Care Industry and denying Obama and the Dems any clear success on it's creation and implementation.

The Repubs had so much fun ruining that program, I bet they're still laughing their asses off over it, especially after tagging it in a way that excludes their explicit culpability in determining how this jigsaw puzzle of a program is missing so many of its critically important pieces to make it work the way it should.

 

[shira]

Why?

First off, "Obamacare" isn't "fully in place" by 2014. The abnormally large chart hanging on the wall at work still lists new requirements being put in place through 2019.

Second, "Obamacare" is partially in place now. The abnormally large chart hanging on the wall at work indicates it started being implemented in 2009.

Third, some of the changes already implemented or soon-to-be-implemented are not changes to sneeze at. IIRC (I'm not at work so I can't reference the abnormally large chart hanging on the wall) "Obamacare" institutes something like $6billion in taxes on the health insurance industry starting in 2012. If you don't think those taxes will get passed on to companies and consumers I have some beach-front property in Oklahoma you might be interested in. Things like no deductible/no coinsurance well-visit checkups and no lifetime maximums are already in place (as of 2010 IIRC) and those drive up premiums costs as well.

Fourth, insurers have incentive to roll out future changes mandated by "Obamacare" before the "go live" date of implementation. As of 2014 insurers will be required to offer certain insurance plans both inside and outside of the state/federal exchanges. These plans must have the same provisions and must cost the same, i.e. no price discrimination, i.e. the premium charged might not reflect the risk assumed. If I were an insurer, I sure as hell wouldn't start marketing those products on 1/1/14 and *hope* my actuarial statistics were correct. No, I'd get state product approval and phase them in over 2012 and 2013 while phasing out products that will be illegal in 2014, thus ensuring that I had a least a modicum of a statistical base to project profitability on in 2014 and beyond. Well, as insurers do that many employers and employees will find that their group plans are either eliminated or modified to more closely comply with future (known) legal requirements and those changes won't reduce costs for the vast majority of Americans.

I agree that "fully in place" was sloppy wording by me. But what I meant was that the major provisions of Obamacare (health care exchanges, no more discrimination on the basis of pre-existing conditions, and the health-care mandate) would be in place in 2014.

Because of the mandate, insurers are going to be seeing a huge influx of funds from low-risk customers with which to offset the costs of insuring higher-risk customers. That's the whole point of the mandate - to reverse the death-spiral trend of ever-increasing premiums as the young and healthy bail out of the market. The CBO's own analysis of Obamacare's predicted effect on premiums was as follows:

For the effect on health insurance premiums, the CBO referredto its November 2009 analysisand stated that the effects would "probably be quite similar" to that earlier analysis. That analysis forecast that by 2016: for the non-group market comprising 17% of the market, premiums per person would increase by 10 to 13% but that over half of these insureds would receive subsidies which would decrease the premium paid to "well below" premiums charged under current law; for the small group market 13% of the market, premiums would be impacted 1 to −3% and −8 to −11% for those receiving subsidies; for the large group market comprising 70% of the market, premiums would be impacted 0 to −3%, with insureds under high premium plans subject to excise taxes being charged −9 to −12%. The analysis was affected by various factors including increased benefits particularly for the nongroup markets, more healthy insureds due to the mandate, administrative efficiencies related to the health exchanges, and insureds under high premium plans reducing benefits in response to the tax.

In other words, the CBO estimated that group-insurance premiums (which is what the OP is referring to) should DECREASE under Obamacare. I haven't seen any other impartial analysis the contradicts the CBO's. So I'm inclined to think that any significant increases in premiums (or reductions in coverage) being seen now have very little to do with Obamacare and an awful lot to do with companies reacting to the still-horrible state of the health-insurance status-quo in the United States.

 

[sactoking]

Because of the mandate, insurers are going to be seeing a huge influx of funds from low-risk customers with which to offset the costs of insuring higher-risk customers. That's the whole point of the mandate - to reverse the death-spiral trend of ever-increasing premiums as the young and healthy bail out of the market. The CBO's own analysis of Obamacare's predicted effect on premiums was as follows:



In other words, the CBO estimated that group-insurance premiums (which is what the OP is referring to) should DECREASE under Obamacare. I haven't seen any other impartial analysis the contradicts the CBO's. So I'm inclined to think that any significant increases in premiums (or reductions in coverage) being seen now have very little to do with Obamacare and an awful lot to do with companies reacting to the still-horrible state of the health-insurance status-quo in the United States.

Well, working as a regulator I would have to delve into the CBO's analysis more to get a solid frame of reference, but from a quick-glance analysis I would say there are some potential deficiencies in their thinking:

1) While the mandate will "bring back" a quantity of young, healthy insureds to subsidize the older insureds it will also "bring back" a quantity of otherwise uninsurable people with known, and often exorbitantly large, medical costs. It could take 10, 20, 50, or 100 healthy insureds to offset the costs associated with just one insured who was previously uninsurable. If the statistical projections are wrong (I don't know if they are) increased costs from the mandate could outstrip increased risk pooling.
2) Compounding #1 is the fact that insurers will be legally prohibited from charging a price commensurate with risk for those with existing conditions (since technically the price = cost of treatment as the probability of the condition existing in that person is 100%). I don't remember what the cap is, let's just say it's 400%. That means that Healthy Person A on Plan Z would pay $200 per month and Unhealthy Person B on Plan Z would pay no more than $800 per month (not including federal subsidies). There are definitely scenarios in which those prices might not be sustainable, so the premium for Plan Z would be set to $300 for Person A and $1200 for Person B. In other words, capping the disparity between healthy and unhealthy premiums has the deleterious effect of dragging healthy premiums up.
3) Compounding #1 and 2, the federal government will be subsidizing the cost of Plan Z for Person B. Where does that subsidy come from? From the insurers. Through 2019, the health insurance industry will pay ~$100 billion dollars in new money taxes. Those taxes will get passed right along to their captive buyers, the American people.
4) I don't know what sort of "efficiencies" they expect to see reflected in premiums resulting from the exchanges, but all of the companies I've talked to so far have said they're looking to file increased rates to recoup the costs associated with all the additional exchange requirements.
5) The CBO's last contention, that premiums will go down for large group markets, is specious analysis. The drop is due to decreased coverages available. The decreased coverages are because the federal gov't is planning on taxing certain benefits until the industry's collective butt bleeds. What they've basically done with that is say "Insurance costs are too high, so we're going to tax the shit out of certain benefits until they're no longer offered. When they cease to be offered, premiums will go down and we'll take credit for lowering premiums". What's not said is that you're paying less and getting less, which is not the same thing as paying less for the same coverage.

 

[Ausm]

Since even government can never afford everything, government bureaucrats will decide who gets what.

There would be no difference if your Healthcare was under private control because The health insurance industry decide right now what they will or will not cover in order to make a profit.

 

[werepossum]

There would be no difference if your Healthcare was under private control because The health insurance industry decide right now what they will or will not cover in order to make a profit.

That's somewhat true, except the government is there to smack them down if they do not live up to their contracts. But it's certainly true that health care, like anything of value that requires materials and/or labor, is inherently rationed in every economic system.

 

[charrison]

Thanks for the clarification. I don't have a problem with high deductible, I just don't think it's going to solve the big problems with health care costs. Anything major will eat through the deductible almost immediately.

And once the deductible is covered, insurance usually pays for most or all after that.

Most healthcare transactions occurs when people are either very sick or scared of becoming very sick. Either physical or emotional duress. Most people don't go to the doctor for fun, they go out of pain or fear.

Are you serious? Yes people go to the doc when they are sick, but that does not mean they are on their death bed either. A trip to the doc for the common stuff should not need to have insurance involved at all.

 

[Zebo]

Just dont get sick. Stay in marathon running shape eat right and you'll have little problems, like one in 1000 freak shit like Lance Armstrong. IMO whole medical industry is full of quacks snake oil salesmen and fraudsters so it's best to stay away anyway, great insurances or not. That they are overpaid just wants me to do 100 pushups. And yes I still can.

 

[Zorkorist]

The apathy in the health care industry is obvious.

People that don't care about you, or your family, can't help you.

It doesn't matter how much money is funnelled towards them, they don't care.

-John

 

[quest55720]

There would be no difference if your Healthcare was under private control because The health insurance industry decide right now what they will or will not cover in order to make a profit.

So you would trust the Tea Party with your families healthcare? I don't trust any of the fools in washington DC with my families healthcare. Any crappy CEO would be better than what we have right now in the federal government.