More Shopping Around . . .
I want to stress the need to shop around when looking for healthcare insurance on the exchanges by citing one example of how it can make a difference. As mentioned earlier here and on Charles Gaba’s ACA Signups blog, Shopping Around does make a difference. If you did not do so, you could be suckered into paying far more than what is necessary for healthcare insurance. This is supposedly the impact of the free market and as there is a sucker born every minute, there are those who will invest the time to look for and find the best policy at the best price. The market is not static.
I pulled another example of how the market can vary by going from a state to state view to looking within one particular state. In particular, I chose Missouri as an example to portray as it is showing an advertised high increase of cost at 27 and 22%. Charles Gaba does an excellent job of explaining the impact of these two increases within Missouri, which I will portray at AB. Charles Gaba fills the gap which Healthcare.Gov does not fill by pointing out the number of policies which have lower rates of increase than 10% (Healthcare.Gov only mentions increases >10%).
As you read the top half of the chart (click on the chart for a larger chart), you can see Coventry Health and Life appears to dominate the market place with >80% market share. If we look at the number of participants in the market, Coventry is only being measured against 48% of the market place. The other half of the market place which is reporting less-than a 10% rate hike is not reported by Healthcare.Gov. It is there, Healthcare.Gov does the consumer a great disservice by not reporting market place increases less-than 10%; the PPACA a disservice as it creates only a picture of out-of-control increases; and a disservice by feeding the naysayers with data of >10% increases only. While the PPACA is not perfect, it is certainly a step in the right direction as we waited ~22 years since Hillarycare for the healthcare industry and the Republicans/Congress to bring something to the table.
The bottom half of Charles Gaba’s chart depicts what could be happening using an estimated increase of 9.9% with the other healthcare insurance companies. If Charles is to be wrong in his calculations, he has erred to the high side of a potential increase by them. The total increase for the state is not 33% or 42% as reported in the news media. Nor is it 21% using a weighted average calculation as Charles Gaba determines. It is an ~ 15% total increase (Charles Gaba calculated) as determined by a high estimate of what is being paid by >50% of the market place insured participants. Could the state’s 15% be decreased? Yes, if more people shopped around in the lower half of cost in the market place.
Is this a failure of the market place, a failure of people not to “Shop Around,” or a failure of Healthcare.Gov to advertise low increases by not reporting on those lower-than 10%? Some of each I suspect; but, do not expect the healthcare insurance companies to come to your door and tell you they are going to gouge you this year as they will not. Maybe Healthcare.Gov should report on the low increase companies and maybe people should spend more time looking for a low cost and better policy . . . the same amount of time they will spend investigating an automobile and looking for the lowest cost than what they will for something impacting their health. After all, which is more valuable?
People should not have to shop around. This is insane. Most people can’t figure out what the terms in policies mean. As an example, our company chose to self-insure on part of the co-pay increases so as to keep the premiums to us the same. Good guys, right? Most of my co-workers thought it meant they would have higher co-pays! Even after an hour of questions fielded by our agent. And I understood immediately what was involved but only due to my background. This is really rigged against the average Joe and Jane.
Carol;
The PPACA is a huge step forward from what existed before . . . “nothing” for the uninsured and those denied Medicaid by states previously. Is it perfect? No, it is not. Could it be improved upon? Of course, it can. What I am suggesting here is to look at the pricing for the various plans; bronze, two levels of silver, gold, and platinum. The PPACA does detail what the minimum qualifications are for healthcare insurance taking much of the mystery out of what it should provide, what you pay for, and what you should not have to pay for when you go to the doctor’s office. Nobody is saying you have to read the 1 inch thick insurance policy book; but, you should be able to understand the basics of co-pays, deductibles (for which a subsidy exists), and premiums (for which a subsidy also exists). It is not insane to shop around and check out pricing the same as many might do for something to wear, something to drive, and for something in which to live. You would need to do it even if the Gov provided it exclusively which would not be an answer either. One has to read and study.
Your company could spend more time educating its employees (and many companies should do so) on healthcare insurance. Has anyone checked to see if they could be insured for less in the state exchanges?
The intent of the post is to show there may be lower prices and do not believe all of the propaganda and sensationalism.
Run,
I know what you are saying here, but Carol is also noting that the people really just don’t get it. I have been advising people to work with a person of the insurance exchange.
I can tell you from 30 years in practice that people just do not understand the payment structures. There is always some patient questioning why they are paying X when they did not before. Usually it is because they have not met their deductible for the year (including medicare programs). Their questions and responses always come from the simplistic idea that all they have is the fixed copay (usually tiered also) and the rest is covered.
Yes, better than what we had for those not covered. Just this week I had to refer someone to our state exchange (I give them the number). But, it’s not simple to decide by any means. Frankly, the less costly plans result in high potential costs. In our state at least the actual better plans for limiting the insurance cost and potential out of pocket are the percentage split plans and not the ones with the copay. But, I know people look at the $20, $30, $40 copays, the monthly insurance cost and think they are getting a better deal. They think they have minimized their overall risk of costs.
I’m sorry, but this ACA while covering more people is no different in methodology than what 401K’s did for retirement as to the level of sophistication in knowledge needed to make it work. It is not that of the common citizen.
Both the ACA and the 401K concepts are concepts based upon financial management ideas. It does not work well for those who mostly earn their money from wages. But, you know the selling point was “choices” and “freedom”.
There is no beating the cost in the end. Pay it up front or on the back end. The trick is to guess correctly as to what one can afford now vs later. Its a cruel system in my opinion.
Daniel:
“from 30 years in practice that people just do not understand the payment structures. There is always some patient questioning why they are paying X when they did not before. Usually it is because they have not met their deductible for the year (including medicare programs). Their questions and responses always come from the simplistic idea that all they have is the fixed copay (usually tiered also) and the rest is covered.”
Why is it not criticized during the 30 years past and criticized now as a fault? People also vote based upon false ideology too; but, we accept it? No, we do not and it is open warfare on those who come to Angry Bear with false beliefs. There is a degree of responsibility to find out and understand.
“Yes, better than what we had for those not covered” and better coverage for preventative care also which was not covered previously. Things like pneumonia and shingles shots at a certain age, care for men, care for women, and preventative care for children. Free preventive services; All Marketplace plans and many other plans must cover the following list of preventive services without charging you a copayment or coinsurance. This is true even if you haven’t met your yearly deductible. What plan did you know over the last 30 years did this? I don’t know of any plan and maybe I was too poor to know it. https://www.healthcare.gov/preventive-care-benefits/
“I’m sorry, but this ACA while covering more people is no different in methodology than what 401K’s did for retirement as to the level of sophistication in knowledge needed to make it work. It is not that of the common citizen.
Both the ACA and the 401K concepts are concepts based upon financial management ideas.”
Seriously? With all new coverage brought forth by the PPACA, the limitations on payout regardless of salary, the subsidies for both premiums and deductibles, the limitation on what can be charged for the elderly and smokers, coverage for offspring to age 26, all people must be covered, 80 and 85% of premiums must go to medical expenses, etc. This does not sound like a 401k where the payout is based on historical payout with no promise of a future payout. There are definite defined limits and coverage.
What always confounded me is going to the doctor and asking; well, how much us is this EKG going to cost or this blood test or this urinalysis, etc. The blank stare is overwhelming when you do not have insurance or have catastrophic coverage. Have you ever talked to the hospital bill collectors to negotiate payment and be told if you are late once they will turn the account over to the collection agency? The care coming from the healthcare industry is negligible when it comes to paying the bills. At least, the PPACA does limit the payout.
Where did I say it was the best thing going? I didn’t. It is what we have today and it will probably morph into something else. And yes, it does require people to read and ask questions. It is a damn sight easier than reading the one inch thick book of ESI policies.
Maybe people should spend more time looking for a low cost better policy . . . the same amount of time they will spend investigating an automobile and looking for the lowest cost and not spend time looking for something impacting their health.
Run,
I have never said you were suggesting or saying it is the best thing going. Did not even suggest it. Nor have I suggested we should go back to what we have. Not even hinted as such. But there is a major flaw and it is that the people have been thrown into a free market solution which is a gamblers/capitalist solution. We do not do ourselves any good going forward to improve the system if we fail to recognize the model.
Yes, the idea that people have to figure out the risk regarding costs is the same as figuring out the risk of making the right choice of stock etc. in your future retirement. I said the model. Choice. Freedom.
The cost risk is not in the annual physicals and preventative services. Yes, without insurance it could get expensive but… The cost comes when something is found.
In the past, you paid your copay and were done or you paid your percentage and you were done. And, yes there was still confusion in the past. I guess I did not make myself clear. It’s not new, it’s just more complicated now as to figure your present cost against your future costs.
The limitations can still leave a family facing upward of $12k in one year especially if you do the copay plans. At least in RI, the percentage plans have a lower cap for a very comparable premium if not less.
I do not believe the average citizen’s thinking about health care risks and thus insurance is sophisticated enough to truly receive the most benefit of this new system. And thus, just like the 401K system in regard to reducing risk.
Daniel:
You are speaking generalities here. I pointed out where subsidies not only cover premiums but also deductibles. Yes, you may be liable for up to an ~ $12,000 (family) which does not even equate to the cost of a car. Somehow people find money to buy a $30,000 car through financing it and yet this is not an option for healthcare at ~$12,000 in one year? In the second year if still inflicted by the same disorder and your income decreases (if you work) more, the subsidies change. What commercial insurance did such in the past or even now or for a car? An unreasonable car gets repossessed unless you declare bankruptcy.
This is not the same as buying stock which is a gamble and not a sure thing. Even the experts can not predict where stock and the market will go. They can make assumptions on the future and suggest and oversell. A little different with healthcare as you already have an idea what your health is when you go shopping (if you are truthful). There are low cost agents available who will assist in the selection and as Maggie Mahar has suggested it may be cheaper to buy a gold plan as compared to a 2nd tier silver plan if your health is not as good as it should be. The premiums may be more; but, the deductibles and copays less. This is where an agent as a sounding board can help.
The last time I checked for ESI for two, the premiums were >$225 per paycheck with a $3,000 deductible at a $20 billion company (where I work). PPACA is not much different and is equivalent. If you bring up Medicare, a portion of it is paid for out of the GF. The look into the future was always there except now, the environment has changed. Companies are shucking off employee healthcare benefits like they did pensions. You are part of the free market like every voter dreams of being and have been sold by political interests and the 1%. Except being part of the free market, you have to make decisions which will impact you. Pre-2010, you had a chance to make that decision if insurance companies would accept you. Then if rejected, you were left out. That is a limitation with no good outcome. A $6,000 or $12,000 debt is not as big as it seems.
You are beating a drum saying the PPACA is bad with no viable option in the wings. There is no Congress which will pass a healthcare system which may be less costly as it involves bringing the healthcare industry under control the same as any other country has done which have costs ~50% than the US. The same people who would complain about the ~$6-12,000 debt are the same ones who repeatedly vote for a Congress which believes (and they do also) the free market will correct everything. The citizenry keeps taking the blue pill and stays in their fantasy land of a free market solving the healthcare issue.
Amazing.
Simply amazing.
Run, it seems your work is never done. Be careful to limit how many times you bang your head against this wall.
You seems to be assuming that proposed rate changes are independent of current rate levels. I doubt it. At least to some extent, I suspect that higher rate increases are intended to compensate for insufficient current prices. Given your emphasis on shopping, it would be helpful to see how the insurance policies stack up AFTER proposed rate increases, and to get some idea what kind of price change an intelligent shopper might face.
Steve:
And you come here and make a broad based comment and expect me to do your research to refute you. Click on the links and learn by taking the red pill this time. It too is all about $ and cents besides ratios and Gaba admits to such. In an earlier post “Shopping Around” http://angrybearblog.strategydemo.com/2015/07/shopping-around.html you will find plenty of links to find your answer.
Run, you may not think so, but I can tell you right now with what I’m dealing with even $6000 is going to stress us. If it does not go well, then the picture gets even worse.
We literally have no room in our budget for this. People’s incomes are flat or worse. The debt load is rising again, 25% of whites and 35% of African Americans born into the middle class in 1970 plus are no longer there.
Yes, I’m beating a drum. The ACA helped, but it is not financially as easy as you are suggesting. I’ve posted here in the past regarding Mass’ system and the fact that they new it was not going to work well for those in the 380 to 480 % of poverty, that it would be a financial struggle.
I repeat, I’m not saying it’s all bad. But, it’s not all good either. I’m sorry, you seem to be reading the word and not getting my message.
Daniel:
When you make these broad based statements, I have to respond with great detail to you and not let it go by. Daniel and what was the option before the PPACA? No insurance, higher cost insurance, and bankruptcy with a much higher dollar figure. Trust me, I know the financial stress even having 4 degrees. Lots of gaffing up trees to cut them down, chipping the tree branches, cutting grass, and weed whipping to keep my family secure and in one spot done with NO healthcare insurance. One slip and we would have been destroyed. Name me one Krugman, Stiglitz, Sowell, Brooks, Limbaugh, Hannity, Laffer, etc. who has done this to get by?
I will help you in any way I can. Like I said, the citizenry keeps taking the blue pill and stays in their fantasy land of a free market solving the healthcare issue. Best of luck in finding a resolution.
Just once I would like to see a topic about the costs of the ACA and have all the commenters understand that ALL health insurance is expensive.
I sympathize with those who are battling their budgets for decent coverage, but the fact remains that the cost of health insurance has not been increased by the ACA, but decreased.
The average family with employer provided insurance pays $16,834 per year. That is the minimum amount. Deductibles average over $1800. That is a minimum insurance cost every year of over $18,000 if the policy is used. Course there are max out of pockets to make the costs higher, but let’s not even bother about that.
Find me an ACA policy that costs anywhere near that amount to a consumer.
So let’s try to keep this thing in perspective.
Run,
“what was the option before the PPACA? No insurance, higher cost insurance, and bankruptcy with a much higher dollar figure.”
Again, I have not at all implied that the PPACA is not better than what was. That is living without insurance, or living with a plan that was more expensive as ours was when my dear had emergency surgery for a colonoscopy that went wrong (0.2% of all procedures). But, 10 years ago, times were different.
I’m not saying it’s not better. I’m suggesting it is a system that will come back to bite us because of the model or should I say ideology it is constructed from. Just like everything else that has been implemented over the last 35 years that is based on the same model/ideology.
For now, I encourage everyone to go to our state’s exchange, and I always get the semi chide question: Is that Obama care? I sure wish that nomenclature had not stuck. It sets up a negative in to many peoples minds from the get go that I’m sure you have found your self having to break down to get people to get signed up.
Actually the comments here raise a question is the market solution to complex for the average person? Either in Health Insurance, 401ks, IRAs, getting a mortgage etc. Is this a further defect in a defective education system, that we don’t teach folks about economics.
Of course if it is the case that we have made society too complex to enable most folks to make informed decisions, then of course a basic postulate of our economic model is broken.
Lyle there is a difference between ‘finance’ and ‘economics’.
I doubt there is anything you would learn in your typical Intro to Macro or Intro to Micro course that would help here. More helpful would probably be some sort of Community College Business Math course where you would learn something about Rates of Return and Present Value.
For example I picked up one of Mankiw’s manifold editions of his Principles textbook and was confronted with nine or so ahistorical axioms which were presented as obvious and unchallengeable and off we went.
Now if your point is that people should be taught that Economics is generally premised on universally fully informed rational market actors and that this is total horseshit designed to get people through their first couple of years of study before being introduced to things like asymmetry of information and stickiness of prices etc then okay. Just like you might want to send everyone in the country to Magicians’ School so they won’t get fooled by a game of Three Card Monty. But it seems like a waste of resources.
They gave Ackerloff a Nobel (or Sveriges if you like) for rigorously demonstrating what most wide awake people learned early on – if you look around the poker table and don’t spot the mark then get up and walk away. Because you are it. And this is because information is always asymmetric and given the actual historically based postulate that most people are out to maximize their own self interest any information based system that can be gamed will be gamed.
And ACA is no different. The best you can hope for is that the people who designed the game and those who referee it (not necessarily the same people) have some interest in leveling out the playing field. But this doesn’t mean you can just wander into any room at the Casino and sit at the table thinking you are never at a disadvantage. Because you are just like everyone a “fully informed economic actor”. Because the world of finance is not like Lake Woebegon, not everyone is above average.
It is not a defect in education as such. Because nobody can be an expert in everything. The fault if fault there is rests in the postulates of economics itself. Something a semester in a Principles course is not going to help you with. If anything the reverse.
Seriously, I do not see it that way. It is not that difficult and less difficult than navigating a mortgage. If you need someone to guide you through it, there are brokers who will do so and get their commission the same as before except with MLR limitations.
This is not finance nor is it economics. It is purchasing plain and simple. You have to go and do a study on what is good and what is not-so-good, the same as you might an appliance or automobile. You do have to study the topic.
Not rocket science.
Run
I also submitted a comment that mildly disagreed with you: most poor people can’t “shop around.” that is a weakness of the ACA. maybe a weakness that can be fixed. (edited by the Editor)
coberly:
Mostly I avoid commenting to you as you are unreasonable and take on a Troll type of persona on AB. I also avoid commenting on your threads although I do read your comments on SS as they have content worth reviewing. Again, you have made a broad based assumption which is all together unreasonable and I urge you to talk to Dan who also reviewed your comment from yesterday. I also talked to one other person about your comments. No action here is ever taken solely by one person. Your accusatory approach is not appreciated.
Furthermore, that was not all you said . . .
Proposed Theme Song for this article:
“My Momma told me … you better shop around!” (Smokey Robinson and the Miracles, 1963)
Actually I was thinking more of perhaps what used to be taught in home economics classes as well as some places that have consumer classes. I would agree one lesson that should be taught is the lesson about the poker game. Perhaps another way to put is that you should assume everyone trying to do business with you is out to get you (paranoia is right in this case). Also that you need to ask who is paying the guy on the other side of the transaction.
Lyle:
“Perhaps another way to put is that you should assume everyone trying to do business with you is out to get you (paranoia is right in this case).” I agree on the home economics training and the paranoia on business transactions. I just took you literally. And we don’t teach them the simple stuff.
actually
it is hard for me to know what i said, since it disappeared without a trace. or even notice.
an example of courage in argument.
you imply that it was unreasonable or nasty. it was neither.
Thinkng back a bit, in 8th grade we were given an IRS kit to figure taxes (you had to do it by hand back then). Of course today a computer program can do them, and tax programs even exist for smart phones. So perhaps the solution is to find literature and historical stories to emphasize the fact that sharp operators take people. Stories are of course best as they stick with folks.
On my last post that was in the early 1960s.
Daniel: “Both the ACA and the 401K concepts are concepts based upon financial management ideas. It does not work well for those who mostly earn their money from wages”
And yet, those are the only people who can contribute to a 401(k).
Lyle: “Of course if it is the case that we have made society too complex to enable most folks to make informed decisions, then of course a basic postulate of our economic model is broken.”
I am afraid we have done exactly that, Lyle. The idea was to encourage people to save for retirement. What it seems to have done was accelerate the decline of traditional pensions.
Social Security will not have a COLA increase for 2016. The reason is that inflation is too low for an increase.
But health insurance is up 15%? And that is argued as the “good news”?
BK got a cite for that 15%? Is that across the board for all categories of health insurance including Medicare? Because if it doesn’t include Medicare then your point about lack of COLA loses all force.
And are you confusing health inflation with rate increase REQUESTS? Or aware that companies not requesting increases are not included in that average?
Can we at least pretend to be having a debate based on rigor and evidence and lead off with a citation here?
According to the BLS, Health Insurance (CPI-W) is up 0.3% from June 2014 to June 2015. (Table 8, page 31: http://www.bls.gov/cpi/cpid1506.pdf)
In that same time period, the overall CPI-W (which is used to compute the SS COLA) has gone down 0.4%.
adjusted or unadjusted?
Every now and then it is good to see krasting throw off his sheep clothing and act real.
Not that anyone in his right mind wants to deal with the real krasting.
Note that for folks on medicare if they are under the limit for paying extra the basic part B premium will remain the same. If above the 85k single 170k married in income then the premiums will increase.
“adjusted or unadjusted?”
What?
Wow! You guys are tough. I don’t think you know much about living in NY though. You post a link to an apt. Flushing Queens is a big commute, buses and trains. It’s near the old Shea – planes gong to Laguardia are 1000 feet above the streets.
You make it to the 1% and you gotta live in Flushing? The following is a discussion of the gang violence in the big projects in Flushing. This is where my grandchildren will live? Would you like that outcome?
http://queenscourier.com/call-to-address-gang-violence-in-flushing-housing-projects/
No when you get to the 1% you have unlimited choices of where to live – pretty much. What pisses us off is when people boo hoo hoo about how tough it is as 1%ers while not giving a rip about the 99%. Who after all have to pay rent, buy school supplies for their kids, and find pre-school and after school care for them. Granted they don’t have to sweat those entrance interviews and screening at that $25,000 a year kindergarten or by the condo board. So they got THAT going for them.
Wrong thread?