Agents and Exchanges
- Thread starter Cornelius
- Start date
- 8,448
Until today I thought that plans outside the Exchange would be pretty much like they are today... able to decline the highest risk individuals and put riders on those who have certain health histories/conditions. Being able to do this would keep premiums lower than what plans in the new Exchange would cost. But then I came across this:
"Prohibiting Discrimination Due to Pre-Existing Conditions or Gender. The law implements strong reforms that prohibit insurance companies from refusing to sell coverage or renew policies because of an individual's pre-existing conditions. Also, in the individual and small group market, the law eliminates the ability of insurance companies to charge higher rates due to gender or health status. Effective January 1, 2014."
Link: Provisions of the Affordable Care Act, By Year - Major Provisions <br/> in Chronological Order | About the Law | Understand the New Law | HealthCare.gov
If this paragraph applies to every health insurance plan sold in America, like it appears to, we might not find much premium difference at all between plans sold in the exchange and those sold outside the exchange, on the free market. The fact that free-market policies have sales related overhead (i.e. Home Office Marketing Dept, Sales Mgrs, Agents, etc.) will further inflate their cost.
If this is going to be the case, why would a healthy person, or family purchase insurance on the free market, since policies purchased on the exchange have the potential to generate significant tax-credit subsidies for the purchaser?
Someone help me. Am I missing something, or interpreting the 2014 regulations incorrectly? Hopefully I am!
T.I.A.,
-A.C.
"Prohibiting Discrimination Due to Pre-Existing Conditions or Gender. The law implements strong reforms that prohibit insurance companies from refusing to sell coverage or renew policies because of an individual's pre-existing conditions. Also, in the individual and small group market, the law eliminates the ability of insurance companies to charge higher rates due to gender or health status. Effective January 1, 2014."
Link: Provisions of the Affordable Care Act, By Year - Major Provisions <br/> in Chronological Order | About the Law | Understand the New Law | HealthCare.gov
If this paragraph applies to every health insurance plan sold in America, like it appears to, we might not find much premium difference at all between plans sold in the exchange and those sold outside the exchange, on the free market. The fact that free-market policies have sales related overhead (i.e. Home Office Marketing Dept, Sales Mgrs, Agents, etc.) will further inflate their cost.
If this is going to be the case, why would a healthy person, or family purchase insurance on the free market, since policies purchased on the exchange have the potential to generate significant tax-credit subsidies for the purchaser?
Someone help me. Am I missing something, or interpreting the 2014 regulations incorrectly? Hopefully I am!
T.I.A.,
-A.C.
Hey Allen,
Well; everything is very vague now and nothing is set in stone. Future legisliation will interperet the bill and there is much work to do before we figure out how this will all work.
What are know is this: The Exchange plans will be the most highly regulated ones. The economic history of regulation shows that regulation = anti-business = more expensive plans. What this could mean is that the exchange plans will be more expensive than the non-exchange plans.
Perhaps upper middle class do not have too much to gain by the government subsidies, but will gain much more by saving $2000-$3000 a year by going on a non exchange health plan for their family? Possibly even more....
I guess it all depends on how much money the government will be splurging on these subsidies to determine if there could be a benefit from shopping out of the exchange. If what i'm thinking is correct-- these exchanges will make zero sense though. If the exchanges have the most expensive insurance, but the poor people benefit the most, how will they come up with the $300-$900 month to insure them and their family in the first place?
*Sigh* lets all pray it works out in our favor. I'm not ready to give up my insurance business/
Well; everything is very vague now and nothing is set in stone. Future legisliation will interperet the bill and there is much work to do before we figure out how this will all work.
What are know is this: The Exchange plans will be the most highly regulated ones. The economic history of regulation shows that regulation = anti-business = more expensive plans. What this could mean is that the exchange plans will be more expensive than the non-exchange plans.
Perhaps upper middle class do not have too much to gain by the government subsidies, but will gain much more by saving $2000-$3000 a year by going on a non exchange health plan for their family? Possibly even more....
I guess it all depends on how much money the government will be splurging on these subsidies to determine if there could be a benefit from shopping out of the exchange. If what i'm thinking is correct-- these exchanges will make zero sense though. If the exchanges have the most expensive insurance, but the poor people benefit the most, how will they come up with the $300-$900 month to insure them and their family in the first place?
*Sigh* lets all pray it works out in our favor. I'm not ready to give up my insurance business/
- 901
the poor people will get it free. well actually, one of the really bad things that will happen is that the medicaid rolls will double, triple, or worse in many state which will cause huge budget nightmares for those states who can't keep up with medicaid costs as it is.
that's the great irony of this thing - those who benefit the most are the ones who need it the most, but the ones who deserve it the most are the ones getting screwed the most (the middle class)
Allen (& others w/ similar questions):
As I understand it, the phrasing you pointed out refers to plans defined a certain way. For example, all "health plans" would have to have these minimum benefits. "Health plans" in this example would include all plans that pay benefits based on percentages of expenses incurred.
And that's where the loophole opens.
Apparently, these "non-exchange" plans will get around the rules by not paying benefits on percentages, but rather, on flat dollar basis.
Assurant for example withdrew its Access plans to revamp them to be able to market them as alternatives to the exchange plans. We'll know more when they are reintroduced next month but my understanding is they will be fixed dollar benefit plans - but with much larger dollar benefits than in the past. Apparently, regular underwriting can apply - and good old fat commissions too. That's my understanding - and the loophole is writing plans outside the exchange-approved plan definitions.
And you guys thought you hated lawyers huh?
that's the great irony of this thing - those who benefit the most are the ones who need it the most, but the ones who deserve it the most are the ones getting screwed the most (the middle class)
Allen (& others w/ similar questions):
As I understand it, the phrasing you pointed out refers to plans defined a certain way. For example, all "health plans" would have to have these minimum benefits. "Health plans" in this example would include all plans that pay benefits based on percentages of expenses incurred.
And that's where the loophole opens.
Apparently, these "non-exchange" plans will get around the rules by not paying benefits on percentages, but rather, on flat dollar basis.
Assurant for example withdrew its Access plans to revamp them to be able to market them as alternatives to the exchange plans. We'll know more when they are reintroduced next month but my understanding is they will be fixed dollar benefit plans - but with much larger dollar benefits than in the past. Apparently, regular underwriting can apply - and good old fat commissions too. That's my understanding - and the loophole is writing plans outside the exchange-approved plan definitions.
And you guys thought you hated lawyers huh?
- 8,448
JBage007 & JMilber, thanks for taking the time to respond to my concerns about Exchange vs Non-Exchange health plans.
Since the average family of 4 income in the USA was around $50,000 in 2007 (source: Household income in the United States - Wikipedia, the free encyclopedia ), we can assume that the majority of households, will be eligible for either subsidies, or sadly, for Medicaid starting in 2014.
I suppose the great wild-card in all of this is something that won't be known until just before the exchanges are up and running. That is, the cost of the Bronze / Silver / Gold plans that will be the in the exchanges from participating carriers.
JBage007, I hope that "fixed dollar benefit" policies are not the only ones offered outside of the exchange. Mega Life sold tons of these in past years and purchasers are still paying off left over medical bills. Even if the fixed dollar amount is set high, (i.e. $100,000 for a heart bypass) my conscious wouldn't let me sell one, or own one personally. Besides, I think I read somewhere that these type of "limited benefit" plans will be outlawed come 2014. Do you remember seeing this in any of the legislation?
-Allen
Since the average family of 4 income in the USA was around $50,000 in 2007 (source: Household income in the United States - Wikipedia, the free encyclopedia ), we can assume that the majority of households, will be eligible for either subsidies, or sadly, for Medicaid starting in 2014.
I suppose the great wild-card in all of this is something that won't be known until just before the exchanges are up and running. That is, the cost of the Bronze / Silver / Gold plans that will be the in the exchanges from participating carriers.
JBage007, I hope that "fixed dollar benefit" policies are not the only ones offered outside of the exchange. Mega Life sold tons of these in past years and purchasers are still paying off left over medical bills. Even if the fixed dollar amount is set high, (i.e. $100,000 for a heart bypass) my conscious wouldn't let me sell one, or own one personally. Besides, I think I read somewhere that these type of "limited benefit" plans will be outlawed come 2014. Do you remember seeing this in any of the legislation?
-Allen
- 901
At some point, people will not be able to afford "the good stuff" even with subsidies.
And that point may come sooner rather than later.
If you think impending rate hikes are high, wait until you see what happens 1/1/2014.
And that point may come sooner rather than later.
If you think impending rate hikes are high, wait until you see what happens 1/1/2014.
- 8,448
No doubt about, JBage007. The Blue Cross of Illinois president sent out a memo to brokers ealier in the year that said premiums will need to increase "up to 150%" as the health mandates and insurance company laws/taxes come into effect.
I've read several articles recently that describe how people and practitioners will abuse the preventive care mandates which are supposed to go into effect for new policies issued after 9/23/2010. Free colonoscopies and child immunizations will be a burden, but the biggest potential for financial drain of insurance companies may very well come from long-term counseling and treatment of obesity, smoking, depression, etc. by doctors, psychiatrists, and any other medical professional with a desire to milk this new cash cow for all they can get.
Add these items to the new MLR rules that go into effect on January 1, 2011 and we could indeed be looking at tremendous health premium increases long before 2014.
-Allen
I've read several articles recently that describe how people and practitioners will abuse the preventive care mandates which are supposed to go into effect for new policies issued after 9/23/2010. Free colonoscopies and child immunizations will be a burden, but the biggest potential for financial drain of insurance companies may very well come from long-term counseling and treatment of obesity, smoking, depression, etc. by doctors, psychiatrists, and any other medical professional with a desire to milk this new cash cow for all they can get.
Add these items to the new MLR rules that go into effect on January 1, 2011 and we could indeed be looking at tremendous health premium increases long before 2014.
-Allen
- 901
I think 150% is a snow job.
Try 300% and you're getting closer.
As for me, I'm gonna sign up with one of them there new fangled free check up plans and run down to Mayo Clinic and see how much stuff I can get done for free!
Expect many other Americans to do same.
Try 300% and you're getting closer.
As for me, I'm gonna sign up with one of them there new fangled free check up plans and run down to Mayo Clinic and see how much stuff I can get done for free!
Expect many other Americans to do same.
- 415
Its all still up in the air yet and no one really knows is going to happen.
2014 is a long way off yet.........heck we may even end up voting the current undesirables out of office!
Hope is a beautiful thing!
- - - - - - - - - - - - - - - - - -
I am sure that insurance companies will not let this type of abuse happen. Maybe the insurance companies will adopt the old utilization techniques they used to have and make sure that only necessary procedures are given....................................otherwise we will be in a bigger mess than we are now. Oh yeah, I forgot, government monopolization is the current administrations goal.
2014 is a long way off yet.........heck we may even end up voting the current undesirables out of office!
Hope is a beautiful thing!
- - - - - - - - - - - - - - - - - -
I am sure that insurance companies will not let this type of abuse happen. Maybe the insurance companies will adopt the old utilization techniques they used to have and make sure that only necessary procedures are given....................................otherwise we will be in a bigger mess than we are now. Oh yeah, I forgot, government monopolization is the current administrations goal.
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