Skip to comments.Unexpected Health Insurance Rate Shock-California Obamacare Insurance Exchange Announces Premiums
Posted on 05/26/2013 11:24:17 AM PDT by HawkHogan
Yesterday, Covered Californiathe name given to the healthcare exchange created pursuant to the Affordable Care Act that will serve the largest population of insured citizens in the nationreleased the premium rates submitted by participating health insurance companies for the three health insurance program categories (bronze, silver and gold) established by the Affordable Care Act, along with the catastrophic policy created for and available to those under the age of 30.
Upon reviewing the data, I was indeed shocked by the proposed premium ratesbut not in the way you might expect. The jolt that I was experiencing was not the result of the predicted out-of-control premium costs but the shock of rates far lower than what I expectedeven at the lowest end of the age scale.
So, why the all too popular narrative that Obamacare would mean unaffordable healthcare premium costs for so many Americans?
Setting aside the never-ending nonsense peddled by the opponents of healthcare reform, everyone from the Congressional Budget Office to numerous private actuaries have warned that premium shock could be expected to set in once the public began to see the reality of what Obamacare would mean to their pocketbooks. And yet, the only real jolt to the system being felt by these public and private prognosticators today is utter amazement over just how reasonable the California prices have turned out to be.
(Excerpt) Read more at forbes.com ...
Years ago,I had a high deductible, basically catastrophic health insurance policy offered by a professional society to which I belonged. There was low profit motive for the insurer , and the premium was reasonable to begin; but the increases in the annual premiums were so high that they had to beg off and drop the program once the real costs hit.
That is the co payment picked up by the insurance company. Federal subsidy is on premium.
Anyone who doesn’t think that these are “loss leaders” is an idiot. Virtually every insurance company, cable company, phone company, lawn care company, basically, any company that provides a service low-balls to get new business. They are all desperately trying to attract healthy, young people who will pay the premiums. Let’s see what these rates look like in a few years and/or how many people over 50 who need a kidney transplant actually get one while on any of these plans, gold or not. For all I know, “gold” gets you what you got in the USSR, circa 1973.
Say you're single in a non-tech field with an income of $40K. So you'll pay 10% of your income for health insurance, 25% in federal, state and local taxes and probably about 5% (or more) in transportation. So before your rent is paid, 40-50% of your income is already gone.
In addition, we now have to pay for extra layers of state and federal insurance bureaucracy. Such a deal!
However, it is possible that in socialist states like California and Washington, the state has always been more involved in health care than the average state. Oregon, too. These west-coast states may know their potential subscribers better than, say, Idaho which has had minimal involvement in health care. The worst-case projections may yet come to fruition in those less interventionist states. Rate stability is anyone's guess.
what do you get for a bronze, silver and gold?
Nothing if you’re over 65.
This is absolutely NOT TRUE. You get a “wellness shot” and a nice hi-impact biodegradable plastic urn.
CALIFORNIA FUDGES OBAMACARE MATH (Bloomberg 5-24-13)
Bloomberg doesn’t allow us to post here. Follow link:
Well, a couple of things. One, is that these are not "Government estimated costs" and not estimated at all. These are actual first-year (proposed) premiums. Second, these companies will not be paid by anyone to "make up the difference" if their actual costs go higher. It is not any variation of cost-plus and there will be no re-negotiated contracts for the year. Premium stability is another issue altogether and as I've said, this will be interesting to watch.
I agree with one thing he says there — that it is necessary to differentiate between states that have had heavy health insurance involvement all along - like California - from others. That’s what I said a few comments ago. OTOH, his “fudge the math” accusation doesn’t seem so persuasive. He is claiming that each one of these private companies is engaged in some sort of a conspiracy to affect public opinion. That seems silly to me.
I looked at my spouse's paycheck deductions for a family of four. The employer pitches in too, making the cost for a family of four over $20,000 a year.
Having worked for 20 years in the private insurance field for multiple health insurers, I know that these premiums still result in a loss or at most up to a 3% ROI for the insurer, who knows what they're doing.
The IRS doesn't know what they're signed up for, but it will increase their industry-ignorant bureaucracy for sure.
For me to start to believe this guy, he would have to demonstrate that the coverage is comparable or better, which he can’t. The Obamoids are trying to start a meme, “Obamacare really is what we said it would be,” which will come to an abrupt dead end when people start getting the bill.
If you think she is a babe, you need to see your optician. In Kansas they call her “Stinkeye.”
are these rates, ‘offered rates’, if so by who,
or are theses prices... maximums set by Cal?
To put it simply: Covered California is trying to make consumers think theyre getting more for less when, in fact, theyre just getting the same while paying more.
Yet there are many plans on the individual market in California today that offer a structure and benefits that are almost identical to those that will be available on the states health insurance exchange next year. So, lets make an actual apples-to-apples comparison for the hypothetical 25-year-old male living in San Francisco and making more than $46,000 a year. Today, he can buy a PPO plan from a major insurer with a $5,000 deductible, 30 percent coinsurance, a $10 co-pay for generic prescription drugs, and a $7,000 out-of-pocket maximum for $177 a month.
According to Covered California, a Bronze plan from the exchange with nearly the same benefits, including a slightly lower out-of-pocket maximum of $6,350, will cost him between $245 and $270 a month. Thats anywhere from 38 percent to 53 percent more than hell have to pay this year for comparable coverage! Sounds a lot different than the possible 29 percent decrease touted by Covered California in their faulty comparison.
It sounds like they've jiggered the numbers. I don't know why you'd trust CA government. No conservative in CA does. Keep in mind the same mentality that let 4 people die in Benghazi, used the IRS to eliminate Obama's opposition, and sent guns to narcotraffickers resides in CA as well.
Who says I trust CA government? These are the proposed rates presented by numerous private companies. Regarding your article, people on both sides of the issue can cherry pick individual case studies to support their point of view. All you have to do is ignore or not ignore subsidies, changes in benefits (yet call it "comparable coverage"), pre-existing conditions exclusions, and all that.
Personally, I am not happy with the status quo in health insurance, but sure as hell do not want the Obamunists to design a new one. However, it appears that premium increases in some of these west coast states will not be as high (if any) as feared. YMMV in any other states!
It will be interesting to see just how many physicians accept the new exchange rates. Already stretched thin from low Medicare payments because there has been no increase in payments since 2002 much of the reported rates are below the current Medicare rates. In addition the new rules and regulations along with reporting requirements will undoubtedly create a new class of insured patients the ones that have a card but can’t find a doctor. And where will they end up? In the ER a problem the ACA was supposed to solve.
In my state the average FP is 55 years old and all of us are frustrated by the lack of payment increased regulations and the fact that after thirty years of medical practice things are going to get worse before those rosy predictions of Mr Obama ever materialize
Why do Americans need to have families? Why not just import the next generation from the third world?
*Yuck* I say with my 4 kids in tote.
>>Why do Americans need to have families? Why not just import the next generation from the third world?
According to pop culture, we don’t need families—except when two gay men want to adopt a baby boy, or an illegal Mexican couple pops out a child on our side of the border—and then families are all-important.
This was borne out years ago in the auto insurance market where the more libertarian states had lax enforcement on mandatory collision coverage. Rates were comparatively higher in those states.
One uncertainty for these Covered California rates is that ObamaCare creates a unique market that includes people who aren't accustomed to having insurance. I read somewhere that roughly 40 percent of users will be subsidized. Then there is an unknown number who will refuse to participate and others who enroll but later drop out. No doubt the insurers in the exchange have modeled all this.
and just when I thought they were going to say obamacare was going to cost too much and we should just forget the whole idea and stay with whatever private insurance we choose.
>>and just when I thought they were going to say obamacare was going to cost too much and we should just forget the whole idea and stay with whatever private insurance we choose.
Yeah, I wish!
The plan from the start was to make it too expensive and then provide “subsidies” (and I hear that they will go up to people making 400% of the poverty rate) so that they can force working people onto the government dole.
Making new slaves everyday is their motto.
These “lower premiums” assume that a high percentage of younger healthier adults will gladly enroll.
But younger, healthier adults tend to think that they’re bulletproof and are more willing to take the risk of going without coverage and that is what will lead the rates to skyrocket!
Anytime you get something that somebody else is paying for you could consider it “affordable” and a good deal.
Google Covered California to get the hard-to-find calculator where you can plug in the numbers for your situation. The premium for hubby and I, both turning 60 this year, is $1249 for the silver plan, which is 70/30. He was terminated in March, so I’ve been looking into private coverage since then, with the premiums for the 2 of us averaging between $700 to $900. We live in Arizona, and those premiums don’t include maternity and pediatric care, which (fingers crossed!) we don’t need. We will definitely be much worse off with Zerocare, so he’s a liar! Needless to say, we have decided to forego health insurance for the next 5 years until Medicare kicks in.
I forgot to mention that we’re not eligible for any subsidies because we make too much with our 2 part-time jobs, as the income cutoff for subsidies is something like $62,000. If you make $61,500, you only pay about $500/month, but if you make $62,500, you pay $1249! Of course, if the unsubsidized premium is more than 8% of your income, you aren’t required to buy it or pay the tax/penalty either....but you also aren’t insured and are therefore SOL! So how exactly does Zerocare help out the middle class?
It’s all good if you never get sick. I’m reading a novel now that has a plot about a new agency called Dept Homeland Health.
Basically what this dept does is go around collecting people who are unhealthy and sending them to a boot camp for health. Mandatory exercises and dieting. The goal is to reduce the governments cost of health care.
That is the cheapest policy there is....
to maintain similar coverage to what I have now, my premium out of pocket cost would double and some of the coverages that I take advantage of now would decrease.
Of course I am in MN, so that might be part of the differential; however, the only affordable option is the lowest cost (most affordable) bronze plan with about 6.35K out of pocket max and fairly exorbitant co-pays and visit fees. Family out of pocket max is 12.7K in this tier.
There’s no way I would survive under this type of system, which is what (I am convinced) they are after - to eradicate a large segment of the population...
I hope somehow it works out for you. Don’t lose all hope. After having to stop working in ‘99 I have gone into deep funks several times partly on worry about health insurance and yet somehow it worked out. Lots of prayer. Best wishes.
I’m trying to remain hopeful, but layoffs are looming and right now I am recovering from surgery out on leave from work. I feel like there’s been a target on my back for a long time, so I am always waiting for the other shoe to drop.
Having said all of that, I appreciate your kind words. Lots of prayer for you as well FRiend. Best wishes...
The rates announced were for ages 25 and 40. The catastrophic rates were close to the bronze rates, which indicates there’s an actuarial flaw somewhere.
And, not only are the rates tied to income, but the benefits are tied to income. On the same plan, a burger flipper has a $3 co-pay for an office visit, a middle income worker pays $45. There are no current policies where the benefits are income-indexed, so any comparison is meaningless.
The benefits in the California plans are already means tested. Lower income patients get better benefits.
why would co-pays be tied to income? that is weird.
FWIW: the average co-pay for the Bronze level is 40 percent.
So, the article’s comparison is a bit off... but not to the good side. The hypothetical dude is getting less for more.
Makes the rates look lower for the bottom income ranges. The California brochure makes several references to “income equality”... which loosely translates as “screw the productive”.
Out of curiosity, when you had to leave work, did anybody mention the HIPAA “mandatory issue” coverage to you? I had to find out on my own.
Not that I recall. I know HIPAA got going about three years before that. I was on COBRA for 18 months, then went to a temporary one year commercial plan then went to a state plan.
What happened there? Looks like she got slugged!
My status quo in health insurance was OK. The main driver in insurance is government policy. What I suspect is that there is a massive incentive to backload the costs. Democrats don’t want to be driven from government come 2014 & 2016.
One thing the average person doesn’t know or consider is that politicians plot their lives around election dates. Two years is the time horizon, although they plot out further. Leftists become centrists, centrists become rightists, and the reverse as well.
Manipulation is what they do. That these are “private” companies tells me nothing. The top insurer in the state begged off. That tells me more.
Well that didn’t take long:
Rate Shock: In California, Obamacare to Increase Individual Health Insurance Premiums by 64-146%