Obamacare... "find out what's in it"

I found this blog interesting. It covers stuff in Obamacare which I had never heard of until recently, and there are some good details...

http://healthpolicyandmarket.blogspot.com/2014/01/will-there-be-obamacare-death-spiral-in.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed:+HealthCarePolicyAndMarketplaceBlog+%28Health+Care+Policy+and+Marketplace+Blog%29&m=1

Obamacare heavily funds insurance companies, at least for the first three years.

Obamacare contains a $25 billion federal risk fund set up to benefit health insurance companies selling coverage on the state and federal health insurance exchanges as well as in the small group (less than 50 workers) market. The fund lasts only three years: 2014, 2015, and 2016.

Most of the money goes to protect insurance companies from large claims.

Of the $25 billion, $20 billion is earmarked for the Reinsurance Program and $5 billion goes to the U.S. treasury.

First, the Reinsurance Program caps big individual claim costs for insurers––in 2014, 80% of individual costs between $45,000 and $250,000 are paid by the government, for example.

I'll grant you that you can get an Obamacare policy for a good price (compared to before) if you qualify for a subsidy. But if you pay the full price, I find the policies to be very expensive and similar in cost to the high risk pool Cover Colorado policies of the past. Plus the coverage is generally inferior due to very high deductibles and max out of pocket expenses, at least for the bronze and silver plans. Seeing that the government will pay insurance companies 80% of their large claims, I'm surprised the policies cost so much. Imagine how much cheaper the previous policies would have been if they got such government subsidies.

If the insurance company still can't make a profit even with the above claim subsidy, there is also a provision in Obamacare to bail out the company.

Then comes the Risk Corridor program. Participating health plans will receive payments from the federal government in any of the following circumstances:

•The plan's costs for any benefit year are more than 103% but not more than 108% of the health plan's targeted amount. The feds will reimburse 50% of all costs in excess of 103% of the medical cost target.

•If the plan's costs are more than 108% of the annual target, the feds will first pay the health plan a flat 2.5% of the target and then reimburse the plan for 80% of their claim costs above the targeted amount––with no upside limit.

Several people, myself included, have speculated that Obamacare premiums for 2015 will go way up due to the problems they are currently having signing up young people and unsubsidized people. But the author makes a good point that this may not happen in 2015 due to all the protections the government is giving the insurance companies. But if the government funding ends in 2017 as planned, the author says we may start seeing the big premium increases in 2016 instead.

Does this mean that health plans would be happy to see their plans underpriced in the first year, as well as the second and third year? No, they will not have any incentive to see their products dramatically underpriced the first three years only to see their prices zoom in the fourth year and create havoc.

But, my sense is that health plans, because they are so insulated from big losses, will generally stand pat with their 2014 rate structures for 2015––no matter how bad the early claims experience looks. I expect that the health insurance industry will be content to give the Obama administration one more chance to reboot Obamacare in the fall of 2014, when the 2015 open enrollment takes place.

But that is all the patience I see the industry having. While they will continue to be protected from losses in 2016, two years will be enough patience for them and they will be eager to at least begin to transition their rates to the proper level in 2016 rather than face a huge adjustment in 2017 when the reinsurance program ends.

What consumers/voters will be thinking about Obamacare come November 2014 is still to be determined. But insurers won't be losing a lot of sleep over it.

The question is, when will we see a bill to continue the government insurance company bailouts beyond 2016? Or have we already, and I've missed it?

Did anyone here know about this stuff in the Obamacare bill back when it was being passed?

pineinthegrass wrote: Did anyone here know about this stuff in the Obamacare bill back when it was being passed?

I did... but then again, I read the bill... twice... the first version the handed out for public consumption and then the revised version which was published only days before the final vote.

Another "bomb" in the ACA is whole sections dealing with setting up community health clinics, hiring a Healthcare Workforce, subsidizing doctors and healthcare workers education and so on.

Those sections can and will be instituted at the discretion of the head of the HHS.

All for the pleasure of the taxpayer... you and me.

pineinthegrass wrote:
Did anyone here know about this stuff in the Obamacare bill back when it was being passed?

I didn't know until a few months ago. My question is, why didn't Obama, Pelosi, or anyone else ever mention this little detail before the bill was passed? Nevermind, it's pretty obvious.

If someone has the time and patience, read through and determine the effects of your region on health care claims and in particular the effects when you are out of region.

pineinthegrass wrote: ...The question is, when will we see a bill to continue the government insurance company bailouts beyond 2016? Or have we already, and I've missed it?

Did anyone here know about this stuff in the Obamacare bill back when it was being passed?

I posted about this "risk corridors" awhile back in one of the ACA threads, no it was not highlighted in the past. Way too complicated stuff for the dumbed down talking points the media likes.

The re-insurance risk scheme is not really a bad idea given the uncertainty in the risk pool make-up. The questions are the funding of it, and the temporary nature of it and how it distorts costs. Without this probably alot of insurers would bail out after one year. Who knows what happens in 3 years, not Obama's problem really is it?

LOL wrote: The re-insurance risk scheme is not really a bad idea given the uncertainty in the risk pool make-up. The questions are the funding of it, and the temporary nature of it and how it distorts costs. Without this probably alot of insurers would bail out after one year. Who knows what happens in 3 years, not Obama's problem really is it?

I can see how the reinsurance can help during the first few years with the uncertainty of just what the insurance pool will look like early on. And we are seeing that most signing up at this point are either older and/or will get subsidies. But the government (tax payers) paying 80% of claims in the $45K to $250K range really surprised me. That means tax payers (which includes Obamacare payers) are paying for 80% of most major surgeries. I'm surprised Obamacare premiums are still so high after that huge subsidy. And I'm guessing the subsidies will continue after the first 3 years if things continue as they have so far.

It's interesting that premiums may not go up in 2015 due to these tax payer subsidies and bailouts. How convenient considering the election year. I'm sure it's just a coincidence. Of course, as I recall, they also moved back the 2014 Obamacare signup start date until after the election as well.

And I do recall you and the Rev posting about similar stuff before, and that might be where I first heard about it. But these are the first details with numbers that I think I've seen.

pineinthegrass wrote: But the government (tax payers) paying 80% of claims in the $45K to $250K range really surprised me. That means tax payers (which includes Obamacare payers) are paying for 80% of most major surgeries.

That does seem pretty generous of the taxpayers!

Still consider it takes about 10 healthy persons paying $5k/year for the one person spending $45K

And I would not assume it is going to be easy to extend this 3yr budget with Congress, unless Obama does it with an executive order.