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Mon May 16, 2016, 12:31 AM

 

The insurance companies are pulling out of ACA as they are losing lots of money. Don't blame them

for raising premiums.

http://www.wsj.com/articles/insurers-losses-deepened-on-aca-plans-in-2015-1463356176

Many insurers have lost money on the Affordable Care Act plans they sell to consumers. A new analysis shows how much those losses deepened in 2015, the second year of the law’s signature exchanges.



https://www.washingtonpost.com/news/wonk/wp/2016/04/19/unitedhealth-group-to-exit-obamacare-exchanges-in-all-but-a-handful-of-states/

UnitedHealth Group, the nation's largest health insurer, said Tuesday that in 2017 it will exit most of the 34 states where it offers plans on the Affordable Care Act insurance exchanges.


Ultimately it boils down to:
(1) young healthy millennials are not signing up enough to offset the sicker older patients
(2) lots of people are gaming the system (paying premiums only when they need treatment, stopping after) and abusing the life events.
(3) Medical costs of those who use medical treatments have been higher than expected


At the end of the day, premiums collected have to cover medical costs incurred. Hence either (1) premiums increase on everybody (2) more people pay in (restricting enrollment outside the open enrollment period, increasing the tax/penalty) (3) more cost-shifting to those who are using medical treatments (deductibles, co-pays, coinsurance etc.).

This is maths and reality.


41 replies, 4869 views

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Arrow 41 replies Author Time Post
Reply The insurance companies are pulling out of ACA as they are losing lots of money. Don't blame them (Original post)
hill2016 May 2016 OP
AgerolanAmerican May 2016 #1
hill2016 May 2016 #4
pmorlan1 May 2016 #18
elleng May 2016 #2
bemildred May 2016 #21
shraby May 2016 #3
hill2016 May 2016 #5
Downwinder May 2016 #6
Txbluedog May 2016 #8
Travis_0004 May 2016 #24
Downwinder May 2016 #25
My Good Babushka May 2016 #27
pmorlan1 May 2016 #17
haele May 2016 #40
Lint Head May 2016 #7
TexasTowelie May 2016 #34
truebluegreen May 2016 #9
silverweb May 2016 #13
leeroysphitz May 2016 #31
1939 May 2016 #36
truebluegreen May 2016 #37
still_one May 2016 #10
former9thward May 2016 #11
okieinpain May 2016 #14
Canesfan May 2016 #20
CreekDog May 2016 #12
ProfessorGAC May 2016 #33
Socal31 May 2016 #15
pmorlan1 May 2016 #16
Cheese Sandwich May 2016 #19
Katashi_itto May 2016 #22
My Good Babushka May 2016 #23
merrily May 2016 #26
pengu May 2016 #28
SmittynMo May 2016 #29
pengu May 2016 #30
leeroysphitz May 2016 #32
vi5 May 2016 #35
RadiationTherapy May 2016 #38
hunter May 2016 #39
Xolodno May 2016 #41

Response to hill2016 (Original post)

Mon May 16, 2016, 12:36 AM

1. um, pharma price gouging?

 

is that on your radar at all? Because that is the single biggest driver of price increases.

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Response to AgerolanAmerican (Reply #1)

Mon May 16, 2016, 12:40 AM

4. um not at all

 

Spending on drugs only accounts for 10% of total US health care expenditure. Most of the health care expenditure goes to services.

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Response to hill2016 (Reply #4)

Mon May 16, 2016, 03:04 AM

18. Most of it goes to

administrative costs.

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Response to hill2016 (Original post)

Mon May 16, 2016, 12:38 AM

2. 'Insurance' itself not viable, sounds like.

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Response to elleng (Reply #2)

Mon May 16, 2016, 05:32 AM

21. +1. Why are they in the middle of this anyway? nt

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Response to hill2016 (Original post)

Mon May 16, 2016, 12:38 AM

3. Screw the insurance companies, they've screwed the people long enough anyway. If they are

feeling a bit of a pinch, tough! They've earned it, deserve it and karma's a bitch.

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Response to shraby (Reply #3)

Mon May 16, 2016, 12:41 AM

5. well

 

they are exiting the ACA marketplace because they don't want to lose money.

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Response to hill2016 (Reply #5)

Mon May 16, 2016, 12:46 AM

6. Any CEO salary cuts?

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Response to Downwinder (Reply #6)

Mon May 16, 2016, 12:52 AM

8. No they get a raise

 

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Response to Downwinder (Reply #6)

Mon May 16, 2016, 06:26 AM

24. Humana has 20 million memebers

 

Their CEO makes about 15 million. That means you pay about 7 cents a month towards CEO pay.

Not sure if that is making coverage expensive.

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Response to Travis_0004 (Reply #24)

Mon May 16, 2016, 06:52 AM

25. They were represented at the table when the deal was cut.

If it was a bad deal they bear some responsibility.

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Response to Travis_0004 (Reply #24)

Mon May 16, 2016, 07:04 AM

27. But does an insurance CEO earn his money

by expanding healthcare and curing the sick, or by turning a profit by any means including denying and delaying care? And which one is the thing that our society desperately needs?

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Response to hill2016 (Reply #5)

Mon May 16, 2016, 02:59 AM

17. AHIP Lobbyist?

I can't believe you are carrying water for the Health Insurance industry. Oh wait, yeah I forgot you're a Hillary supporter. That explains it. Will you be helping them out at the convention?

“Our Host Committee is made up a diverse group of civic leaders that have led efforts like this in the past, many of whom were integrally involved in the bid for Philadelphia to host the convention,” Adams-Sarthou wrote.

The Host Committee’s finance chair is Daniel Hilferty. In his day job, Hilferty is CEO of Independence Blue Cross, a health insurance giant that covers nine million people. In December, Hilferty became board chairman of the Blue Cross and Blue Shield Association of America, a trade group that lobbies for the insurance industry, and he serves on the board of directors of America’s Health Insurance Plan’s (AHIP), the insurance industry lobbying group that spearheaded the campaign against the Affordable Care Act. Lobby registration documents show the BCBS Association is actively supporting a number of Republican bills to roll back provisions of the ACA.

In an interview conducted late last year, Hilferty said he plans to make “sure to work closely at the congressional level, with the administration, with the Department of Health and Human Services and the Centers for Medicare and Medicaid Services, to have input” into how the ACA is implemented under the next administration.


https://theintercept.com/2016/05/11/lobbyists-dnc-2016-convention/

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Response to hill2016 (Reply #5)

Mon May 16, 2016, 05:32 PM

40. My FIL was a VP at several insuance companies...

At each company except for USAA, he was informed by the boards and the CEOs that as an executive strategist and decision maker, he had to keep in mind his most important customer was - the shareholder. Not the customers who bought policies, as their money just went into the investment side of the house to attract more money. He was told point blank at Blue Cross that the policy owners are a loss-leader to attract investors - especially fund investing. If they had too many claims on the "costs" side of the ledger, they were far less attractive. The strategy to keep money coming in was that the company had to maintain a dis-incentive for policy owners to make claims.

The most important thing that any for-profit insurance company had to do was maintain fiduciary responsibilities.
Because they had to make an attractive enough profit to keep paying the shareholders so they would maintain the company on their investment portfolios.

He worked for Blue Cross/Blue Shield for six months and at Traveler's for a year, until he parlayed that experience plus his military rank into a position at USAA, where he stayed for 25 years, because of the construct of USAA which considered the cost of doing business part of the fiduciary responsibilities to the policy holders. They built their company with the understanding that they were going to have to pay out on claims, so maybe they wouldn't be as profitable as a "prove you weren't at fault before we pay you" insurance company.

When it comes to a "for profit" insurance plan, it doesn't matter what the CEO makes or actual claim costs are, it matters what the ROI is to the shareholders.

Haele

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Response to hill2016 (Original post)

Mon May 16, 2016, 12:51 AM

7. Let them all go out of business and force Medicare for

all. Death and suffering should never be for profit .

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Response to Lint Head (Reply #7)

Mon May 16, 2016, 07:57 AM

34. Let them all go out of business

and nobody will have insurance at all and several hundred thousand people lose their jobs. There is no guarantee that Medicare will be made available to any of those that lose their health care coverage and the GOP will push health savings accounts rather than Medicare. It sucks, but that is a more plausible "solution" envisioned by many because they don't believe that bad things could happen to them.

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Response to hill2016 (Original post)

Mon May 16, 2016, 12:52 AM

9. For-profit insurance is not viable in the area of health care.

 

For the insurance business model to work, many people pay in but only a few actually collect. Think car insurance, fire insurance, flood insurance. With health insurance everybody collects, sooner or later. And with no lifetime caps, no exclusions and increasingly expensive procedures, tests, etc. everybody eventually collects a boat load. Trying to exist and profit in this situation is not possible; it was only possible before because of shit policies that didn't cover anything, denials for pre-existing conditions, finding bullshit ways to disallow claims and all the other crap companies used to pull. Now, they can't.

I feel so, so sorry for the poor insurance companies, with their well-compensated execs, struggling in this business climate. It is just so unfair.



Fucking vampires.

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Response to truebluegreen (Reply #9)

Mon May 16, 2016, 01:17 AM

13. Exactly.

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Response to truebluegreen (Reply #9)

Mon May 16, 2016, 07:35 AM

31. +1

 

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Response to truebluegreen (Reply #9)

Mon May 16, 2016, 08:23 AM

36. In the last three months

my wife has undergone surgery, lab work, radiation treatments, and chemotherapy (hopefully ending this week). I think that during that time her medical costs have greatly exceeded all of the Medicare premiums that she and I paid in during our working lives.

I don't think that the insurance companies are "evil" rather, I think that the insurance model is not sustainable when applied to health care.




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Response to 1939 (Reply #36)

Mon May 16, 2016, 08:48 AM

37. That is what I said: the insurance model is not sustainable.

 

Specifically the for-profit insurance model; Medicare is not for-profit. We'll have to agree to disagree whether the insurance companies are evil. I'd send them to the same level of hell as the war profiteers.

Best of luck to your wife, and you.

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Response to hill2016 (Original post)

Mon May 16, 2016, 12:58 AM

10. Which states are some of them exiting from? My suspicion is those states that never expanded

Medicaid, and were against the ACA to start with.

For instance I would think that states like California and others that fully embraced the ACA, are not experiencing that loss.

There is a lot of misinformation that has been propagated about the ACA, and a lot of folks who would get a premium subsidy don't even explore it because the willing accomplice the MSM doesn't find it their duty to correct misinformation that republicans spew about it, as Chuck Todd said, "it isn't their job to correct inaccuracies"

Programs like this always take a few years to get started before they start showing profitability.

No doubt some are trying to game the system, and some are not signing up because they do not believe they will need it, are playing a game of Russian roulette, and could be left without coverage at the worst possible time.

As I said before those states that are getting the word out, putting out public service announcements encouraging people to sign up, and supportive of the ACA, I believe will be the examples others will follow

States which refused to expand medicaid have lost millions of dollars of government money because of it. Even looking at the trans gender rights issue, those states that are exercising that discriminatory practice are losing millions as companies find other places to do their business



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Response to still_one (Reply #10)

Mon May 16, 2016, 01:11 AM

11. Insurance companies are leaving CA.

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Response to former9thward (Reply #11)

Mon May 16, 2016, 01:41 AM

14. Whats the date on this article. Why is it

Referencing stuff in 2013.

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Response to former9thward (Reply #11)

Mon May 16, 2016, 03:34 AM

20. That article is dated 2013?

ACA was not even fully implemented in 13.

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Response to hill2016 (Original post)

Mon May 16, 2016, 01:14 AM

12. the United Healthcare argument is wrong and not representative

first, United Healthcare is mainly employer based, and was mostly a more minor player in the health care exchanges.

their pullback is not represented in the overall individual market that makes up Obamacare enrollment.

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Response to CreekDog (Reply #12)

Mon May 16, 2016, 07:49 AM

33. ^^^This^^^

They are cherry picking! The companies aren't losing money. They're only picking the small portion of the overall portfolio.

What they should be claiming is that they are making a slightly lower profit, overall, because of ACA.

But, that wouldn't elicit much sympathy.

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Response to hill2016 (Original post)

Mon May 16, 2016, 01:49 AM

15. This was inevitable.

I agree with the young and healthy subsidizing the less fortunate. But making it voluntary? Come on.

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Response to hill2016 (Original post)

Mon May 16, 2016, 02:51 AM

16. AHIP

posts now.

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Response to hill2016 (Original post)


Response to hill2016 (Original post)

Mon May 16, 2016, 05:51 AM

22. A Hillary Supporter speaks.

 

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Response to hill2016 (Original post)

Mon May 16, 2016, 06:20 AM

23. I would like a study of how many people suffered

a worsening and degradation of their physical condition while fighting with insurance companies. They do more harm than good, and they should just drop the pretext of being an arm of the medical community. They are a money business and they are only interested in money, not medicine. The sooner they are dissolved the better. To make them the centerpiece of "reform" was a mistake.

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Response to hill2016 (Original post)

Mon May 16, 2016, 06:56 AM

26. Medicare for All is the only answer. A strong public option would have lead to it naturally.

Yeah, I know: demon Lieberman. Spare me.

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Response to hill2016 (Original post)

Mon May 16, 2016, 07:05 AM

28. Clearly we need single payer

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Response to pengu (Reply #28)

Mon May 16, 2016, 07:27 AM

29. Yes, CLEARLY we do

But we're a nation of stupid, ignorant people, who tend to elect oligarch and facists. Fuck everyone else. I see no one to blame but ourselves. Exclude Bernie from the list, of course.

It just upsets the hell out of me as to how friggin stupid we are.

And we continue to get robbed by insurance companies. It's pretty damn sad what we're doing to ourselves.

To make it worse, it seems no one is listening, or they are ignoring the obvious demise of our future.

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Response to SmittynMo (Reply #29)

Mon May 16, 2016, 07:35 AM

30. You and me both :(

The answer is obvious and well tested in other parts of the world. We just can't have nice stuff here because of the potent combination of greed and stupidity.

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Response to SmittynMo (Reply #29)

Mon May 16, 2016, 07:39 AM

32. Won't happen. Not under Clinton and all her 1 percent Insurance company CEO buddies. n/t

 

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Response to hill2016 (Original post)

Mon May 16, 2016, 08:18 AM

35. Oh well. Nothing we can do about it, right?

 

Have to face reality? It's the best we're going to get? Right? Isn't that what all the sensible adults in the room want us to accept?

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Response to hill2016 (Original post)

Mon May 16, 2016, 08:55 AM

38. The revolution will not be comfortable.

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Response to hill2016 (Original post)

Mon May 16, 2016, 04:25 PM

39. Don't blame them, nationalize them!

A few of their executive officers are certainly worthy of some hard prison time too.

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Response to hill2016 (Original post)

Mon May 16, 2016, 05:50 PM

41. Not surprised.

Many Health Insurance companies are not equipped for offering public coverage. Their rating algorithms, business models, etc. are set up for company based insurance plans.

They can raise premiums and price themselves out of the market, and hence still lose money. Or just recognize they can't compete in a state due to a number of reasons such as low uptake, low population, not equipped to handle "public coverage", etc.

If they were allowed to spread the loss costs over a region or nationally they probably could turn a profit. Such as many property and casualty companies aren't opposed to covering wind related losses in Texas, Louisiana, Florida, etc. along the coast if they are allowed to spread those costs across all states that would be affected. But they can't because those states have regulated that an insurance company cannot raise premiums because of losses in another state, or; if they can, can only do so marginally.

Would make perfect economic sense to eliminate those laws and could ease the burden of high premiums people face. But say a politician states "why should our insurance rates rise in Houston for a hurricane in Miami! We haven't had a hurricane here in X number years." While ignoring that the actuaries do take that into account.

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