Unlucky In Coverage

Unlucky in Coverage writes from the Southwest:

I am self-insured. I was quite pleased last year when I had a chance to purchase health insurance through the Federal Marketplace because my new plan was significantly less expensive and more comprehensive than the coverage I had previously. However, I just learned that my (Gold Plan) insurance is jumping from $399 to $508 a month – that’s 29%! I’ve been reading reports that the average rate increases are only a few percentage points but all of those studies are based on the lowest-priced Silver Plans.

After spending a few hours researching my plan options, I am afraid I am going to be stuck with the 29% increase, unless I am willing to change from the three main physicians that oversee my care. Has anyone else experienced this? I am wondering if the big increase is because I am on a higher medal plan, or perhaps it’s a regional phenomena (though overall my state reportedly did not have a significant jump in rates, at least for the Silver plans.)

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7 replies »

  1. Issue #1, 2) With regards to keeping your physician/plan: Those policies were sub-standard healthcare plans that work against, rather than work for the health of consumers. The PPACA works to pursue goals of a national healthcare strategy — that purports to bring America better health, through affordable quality healthcare.

    #3) Average premiums growth rates have slowed. Average premium increases for 2015 have moderately decreased. In fact, premium increases for 2015 have averaged between 5 and 5.6% (in 35 states). With premium tax credits/subsidies, many families (2/3 of current customers) can find coverage for under $100.00 a month. Many of those folks receive an average subsidy of $286.00 monthly; reducing monthly premium rates and saving those families minimum $2500 annually. However, some states are disbursing subsidies up to $576.00 monthly; saving families even more. 2015 proposed premium averages are $381.00. Although, some states have seen double-digit premium increases, this is not the norm. Other states have seen decreases in premium growth rates. Many families are saving more than $2500 annually. Individuals/families can get an extra subsidy to help with deductibles and co-payments if incomes are 250% of the federal poverty level.

    The PPACA is working, and doing an effective job at controlling healthcare costs, healthcare spending growth rates, and giving families the help that they need to purchase affordable quality healthcare.

  2. “if you like your doctor, you can keep your doctor.”

    “if you like your plan, you can keep your plan.”

    “insurance premiums will go DOWN an average of $2500 per year”

    – Barak Hussein Obama.

  3. With the exception of a handful of community rated states, insurers’ prior actuarial experience is based on the use of medical underwriting to assess risks. The exchanges don’t allow insurers to consider pre-existing conditions. They can only rate based on age and smoking status. With most people buying the silver or bronze plans, the number of people buying the gold and platinum plans in a single state is probably quite small. There could easily be adverse selection in those plans..

    For the first three years of the exchanges, insurers are protected from severe losses by the three R’s – risk adjustment, risk corridors and reinsurance. Three years should be enough time to gain the needed actuarial experience under the ACA’s insurance rules after which they can presumably be dispensed with except for risk adjustment which is appropriately permanent.

  4. How uncertain are the actuarial tables? There are some antitrust exemptions for insurers that allow them to compare experiences and statistics. In the present day do you think a large insurer with an N of 1m beneficiaries can estimate costs for a mixed population within + or – what percent?

    Perhaps the idea was to gain market share first, then financial sustainability.

  5. There is also probably more likely to be adverse selection in the gold and platinum plans as compared to the silver and bronze plans. With no prior experience to go by, first year pricing was just an educated guess subject to significant (upward) revision in the second year.

  6. Insurers are pricing out the high cost providers in their networks so if your doctor is a high cost provider and you want to stay in his care, you’ll need to foot more of the bill. You can’t have your cake and eat it too in this new age.

    Part of the rate hike might be that insurers are trying to right-size their premiums. Last year there was little data to work with in terms of who would be entering the exchange. Now that there is more data, premiums may fluctuate quite a bit to adjust.

    Btw, that’s a 27% increase, not 29%.