Health insurance rates lower with ObamaCare

[Gaspar]

In agreement?  Show me that the health care costs you just quoted doubled because of the exchange?  It used to be $200 a month?

Not because of the exchange. . .according to the exchange!

Hell if I know of any reason they should double except I am willing to bet they were calculated that way to compensate for the construction, and management of the new bureaucracy.

[Cats Cats Cats]

If the government creates an exchange that sells a plan for $12,500, you can damn well be sure that the insurance companies will make sure that the next cheapest plan is only a few bucks short of that.  This is the prime example of what happens with government price-fixing.

If the government says the Dodge Avenger is worth $200k, and sells it for such, you can bet Chris Nichols and all of the other Dodge dealerships will want to fill that profit gap, yet still compete by selling it for $150K.  Hell of a deal!

Ok, when in history has this happened?

[Cats Cats Cats]

Not because of the exchange. . .according to the exchange!

Hell if I know of any reason they should double except I am willing to bet they were calculated that way to compensate for the construction, and management of the new bureaucracy.

You seem making a claim that the insurance plans you printed will cease to exist after Jan 1 2014.  This is not an accurate statement.

[guido911]

Don't confuse gaspar as someone who is good at math.

Real numbers don't interest him. They don't fit his preconceived bias.

Are you FREAKIN SERIOUS? Did you forget who started THIS thread with a bullsmile story about insurance rates, and you are criticizing someone else about "real" numbers?

[Gaspar]

You seem making a claim that the insurance plans you printed will cease to exist after Jan 1 2014.  This is not an accurate statement.

I am not making that claim at all.  I am making the claim that they will become much more expensive because the market will become artificially inflated through the pricing of the government exchange negotiated plans.  

Look at this chart again.  The Platinum plan on this chart offers far less coverage than a typical plan and has far higher out of pocket expenses.  Maximum family out of pocket of $8,000?  My current plan is less than half what this costs and my total family out of pocket is capped at $3,000.  These are really shitty plans!

[Conan71]

You seem making a claim that the insurance plans you printed will cease to exist after Jan 1 2014.  This is not an accurate statement.

According to the seminar my wife attended which was put on by BCBS a couple of months ago, they will cease to exist as we know them.

[Gaspar]

According to the seminar my wife attended which was put on by BCBS a couple of months ago, they will cease to exist as we know them.

I just came back from a seminar for the National Sporting Goods Association in Florida where two insurance companies basically said the same thing, and a consultant for a company called Willis Global gave some interesting insight.  Independently they won't be able to operate under the new "pre-existing conditions" mandate, but the exchanges offer them the ability to deliver a scaled down product for a higher profit margin.  That's the main reason most of the mega-insurers were such supporters of the plan--goodbye competition, and heavy marketing budgets.  Outside of the system, these companies will also offer high end plans and supplement products at a premium. 

From what the consultant said though, there is a very high likelihood that nothing will change for several years, because no one seems to be able to get a handle on how to manage the new requirements.  Unfortunately costs will continue to skyrocket as they try to meet compliance requirements, but even the hospitals and docs don't know how they are going to tackle the new coding and billing requirements or the purchase of new software and systems to aid in that. It is quite the cluster.

[Conan71]

I just came back from a seminar for the National Sporting Goods Association in Florida where two insurance companies basically said the same thing, and a consultant for a company called Willis Global gave some interesting insight.  Independently they won't be able to operate under the new "pre-existing conditions" mandate, but the exchanges offer them the ability to deliver a scaled down product for a higher profit margin.  That's the main reason most of the mega-insurers were such supporters of the plan--goodbye competition, and heavy marketing budgets.  Outside of the system, these companies will also offer high end plans and supplement products at a premium.  

From what the consultant said though, there is a very high likelihood that nothing will change for several years, because no one seems to be able to get a handle on how to manage the new requirements.  Unfortunately costs will continue to skyrocket as they try to meet compliance requirements, but even the hospitals and docs don't know how they are going to tackle the new coding and billing requirements or the purchase of new software and systems to aid in that. It is quite the cluster.

Now, now Gaspar, these insurance consultants, actuaries, and plan offerers are just haters.  They know nothing about Obamacare and are just raising rates to stick their finger in Obama's.

Personally, I'll listen to people in the industry, not journalist's spin-up of it.

[Cats Cats Cats]

With the requirement that at least a set % of premiums must be used to pay medical expenses where is this extra profit coming from?

[Gaspar]

With the requirement that at least a set % of premiums must be used to pay medical expenses where is this extra profit coming from?

UH. . .The price increase?  15% of $800 is more than 20% of $450.

LOL! You were bamboozled. You should read it. . .

The language of the bill says they are required to spend somewhere between 80-85% on "medical claims and quality improvement activities."  It purposefully makes that so vague that it can literally mean anything, yet sounds great in a campaign.

If BCBS builds a new 30 Million dollar executive training center, I guarantee they are doing it as a quality improvement activity. If they hire a new CEO for 80 million dollars it is because he is going to improve quality.

Regardless, many companies simply find it easier to bank the gap funds and then issue rebates at the end of the year.  

The new medical loss ratio requirement (MLR) does nothing to address the real driver of premium increases: the underlying cost of medical care.  The coverage disruptions and other unintended consequences of imposing a new arbitrary federal cap on health plan administrative costs are likely to outweigh any benefit these rebates will provide to consumers.  Moreover, the taxes, benefit mandates, and other regulations included in the health care reform law will cause premium increases that far exceed the value of prospective rebates.

So if BCBS is currently making a 20% income over expense on the $450 I pay a month, they still increase their profitability by making only 15% on the more than $800 I will be paying under Obamacare.  Or they could just keep the cash and pay me a rebate of the amount at the end of the year after they have enjoyed the intrest.

[Cats Cats Cats]

There will be allowable expense and ones that aren't.  Same as capital expenditures.  So far what you have said is that because there is a 1 to 1 insurance company comparison now the prices are going to go up on all insurance premiums.  Why? because they are all going to be expensive that they can raise their prices.   But you also have said that insurance outside of the state exchanges won't be able to survive.  I guess your thought process is that the exchanges are so expensive a company outside the exchange can't compete?  The way you talk about these insurance companies we should have socialized the whole thing if they aren't going to compete.

[Conan71]

  The way you talk about these insurance companies we should have socialized the whole thing if they aren't going to compete.

You do realize that was the end-game from the start, right? 

[Gaspar]

There will be allowable expense and ones that aren't.  Same as capital expenditures.  So far what you have said is that because there is a 1 to 1 insurance company comparison now the prices are going to go up on all insurance premiums.  Why? because they are all going to be expensive that they can raise their prices.   But you also have said that insurance outside of the state exchanges won't be able to survive.  I guess your thought process is that the exchanges are so expensive a company outside the exchange can't compete?  The way you talk about these insurance companies we should have socialized the whole thing if they aren't going to compete.

I assume you already know that was the goal?

The insurance companies understand that there may be little chance of avoiding what will ultimately become a single payer platform.  Fortunately, in this country it will not work as it did (used to) in Canada or GB, because we have provisions in our constitution that won't allow government to imprison people for seeking other options.  If single payer becomes reality, there will be two tiers of medicine and the insurance companies will be at the heart of that.  You will be able to (or companies will be able to offer) expensive private plans with private physicians, or you will go to the Gubment nurse.

I see two possible scenarios in the next several years.

1. The fed cannot implement Obamacare on-time because of the expense, the hospitals and physicians cannot re-tool to meet regulations, and public support for the concept continues to erode until it's elimination becomes the primary issue for all candidates.

2. A bill for the expansion of medicare coverage for all is offered to replace Obamacare and the new promise for a single payer system is introduced.  We get a two tier system with most of us striving to escape the gubment system for the more attractive private offerings.  If barriers and regulations are erected that make this more difficult we will see a medical "black market" arise.

Unfortunately the third, and only intelligent option, is already off the table, because it does not serve politicians on either side.

3. Allow health insurance companies to compete nationwide without collusion through individual state regulation.  This competition will drop individual prices to compete with group policies, and companies will be able to offer employees options from multiple insurance suppliers to fit individual needs instead of one-size-fits-all-according-to-contract deals.

You see Mr. Sheen, the concept is amazingly simple. . .free markets (like nature) always work the same way unless some interference is introduced, and when that happens, the producers always struggle to maintain margin, and the consumer to satisfy desire.  In free markets both parties win, because the consumer will not buy something unless he/she values that something more than the money/labor necessary to purchase it.  When you introduce mandates, regulations, and controls, someone must win and someone must lose, and because of that, you introduce a struggle to overcome that loss.  We see this in the constant necessity for government to "reform" every failing social program.  

Government control gives rise to fraud, suppression of Truth, intensification of the black market and artificial scarcity. Above all, it unmans the people and deprives them of initiative, it undoes the teaching of self-help... – Gandhi

[Cats Cats Cats]

Ha free markets always work the same way?  Why is the deregulated power cost more than the regulated power?  They just got a $1.1 billion LCD price fixing settlement.  Why should we remove the regulation to allow things like that to be legal?  Oh because when companies price fix because they don't have regulations it makes it cheaper for us.  Because free markets always work the same way.  Ha 

I assume you already know that was the goal?

The insurance companies understand that there may be little chance of avoiding what will ultimately become a single payer platform.  Fortunately, in this country it will not work as it did (used to) in Canada or GB, because we have provisions in our constitution that won't allow government to imprison people for seeking other options.  If single payer becomes reality, there will be two tiers of medicine and the insurance companies will be at the heart of that.  You will be able to (or companies will be able to offer) expensive private plans with private physicians, or you will go to the Gubment nurse.

I see two possible scenarios in the next several years.

1. The fed cannot implement Obamacare on-time because of the expense, the hospitals and physicians cannot re-tool to meet regulations, and public support for the concept continues to erode until it's elimination becomes the primary issue for all candidates.

2. A bill for the expansion of medicare coverage for all is offered to replace Obamacare and the new promise for a single payer system is introduced.  We get a two tier system with most of us striving to escape the gubment system for the more attractive private offerings.  If barriers and regulations are erected that make this more difficult we will see a medical "black market" arise.

Unfortunately the third, and only intelligent option, is already off the table, because it does not serve politicians on either side.

3. Allow health insurance companies to compete nationwide without collusion through individual state regulation.  This competition will drop individual prices to compete with group policies, and companies will be able to offer employees options from multiple insurance suppliers to fit individual needs instead of one-size-fits-all-according-to-contract deals.

You see Mr. Sheen, the concept is amazingly simple. . .free markets (like nature) always work the same way unless some interference is introduced, and when that happens, the producers always struggle to maintain margin, and the consumer to satisfy desire.  In free markets both parties win, because the consumer will not buy something unless he/she values that something more than the money/labor necessary to purchase it.  When you introduce mandates, regulations, and controls, someone must win and someone must lose, and because of that, you introduce a struggle to overcome that loss.  We see this in the constant necessity for government to "reform" every failing social program.  

Government control gives rise to fraud, suppression of Truth, intensification of the black market and artificial scarcity. Above all, it unmans the people and deprives them of initiative, it undoes the teaching of self-help... – Gandhi

[Gaspar]

Ha free markets always work the same way?  Why is the deregulated power cost more than the regulated power?  They just got a $1.1 billion LCD price fixing settlement.  Why should we remove the regulation to allow things like that to be legal?  Oh because when companies price fix because they don't have regulations it makes it cheaper for us.  Because free markets always work the same way.  Ha 

Is your beef with free markets or profiteers?  I think you have some displacement here, or perhaps you do not. 
Your example is an example of an externality-- or an additional cost levied on the technology market by the profiteering of a few companies engaged in a trust situation.

There will always be individuals, companies, and even industries that attempt to betray their consumers by manipulating the market.  Ultimately they will pay the price by losing market share.  To subscribe to the idea that government regulation is the answer, is to ignore the overwhelming effect on the market.

You have to understand that prices are ultimately set by the consumer, not the producer of a product.  If you value a 48" LCD TV more than the $800 you have in your bank account, you have set the price through your purchase of that product.  Even if you find out that the product was actually available for $600, that does not change the fact that you VALUED the product at $800.
 
Sure, it sounds unsavory that an industry would inflate their prices to the consumer, however they are only free to do so as long as they do not violate the VALUE placed on that product by the consumer, or create an externality that increases the cost of their product beyond that VALUE.