Cracking Down on Health Insurance Companies

[Dave020]

Hmmmmm, someone's position gets terminated and they can't afford COBRA? I'd go on but there are too many examples.

Are you suggesting that it should be free or at very low premium cost? That only works in places where doctors and hospitals aren't charging out the ass for services.

I guess what you are saying (though you won't actually say it) is that providers of medical services need to cut their rates so that either health insurance companies can cut their NFRs or people could (like way back in the 50s and 60s) pay out of pocket for affordable medical care.

And, since you are implying that costs of premiums and accessibility to coverage (which are based on provider and service costs) are a problem, it seems you must also advocate for Tort reform to lower the provider liability costs which would, in turn, lower provider fee rates.

See, you are really talking about health CARE reform whereas all we got from this administration is health INSURANCE reform. I am in agreement that we need health CARE reform in this country. But reform applies to a lot more than just the health insurers.

There are three component problems that need to be fixed:

1. Insurance reform with mandate so everyone can be covered and paying into the pool
2. Provider reform to lower fees for services
3. Tort reform to reduce costs due to provider liability costs

We only got one of those. How do you possibly expect a health insurer to bear the direct responsibility for not only #1, but #2 and #3 also?

Why does a free preventive colonoscopy cost the insurance company $1200-$1800? Doctors could do it for $200 or less if they didn't have such high overhead.

Why does an ER bill $2500 for the same service an urgent care center bills $150 (I have had cases like that)?

 

[Dave020]

Just for "fun and darling" think about this concept.

What if there was no health insurance at all. There was no huge (almost inexhaustible) amount of money to bill to. There was no pile of cash for providers to grab.

Those who wanted to provide medical services would be paid what the market could/would allow. I'm sure it would not cost $10,000 to deliver a baby for 48 hours at a hospital.

On the downside, without the huge pile of money, we would not have multi-million dollar MRI and CAT machines and all the other hardware that can be amortized over time via the pile of cash available to be paid.

If there were no auto insurance I doubt it would cost as much as it does to repair a fender.

Just something to ponder.

Interesting point! Do you think that health insurance companies stifle competition among providers because they contract them to the pile of money?

If so, and I would tend to agree this might be the case, then we are not talking free market at all.

 

[Crabcake Johnny]

Are you suggesting that it should be free or at very low premium cost? That only works in places where doctors and hospitals aren't charging out the ass for services.

I guess what you are saying (though you won't actually say it) is that providers of medical services need to cut their rates so that either health insurance companies can cut their NFRs or people could (like way back in the 50s and 60s) pay out of pocket for affordable medical care.

And, since you are implying that costs of premiums and accessibility to coverage (which are based on provider and service costs) are a problem, it seems you must also advocate for Tort reform to lower the provider liability costs which would, in turn, lower provider fee rates.

See, you are really talking about health CARE reform whereas all we got from this administration is health INSURANCE reform. I am in agreement that we need health CARE reform in this country. But reform applies to a lot more than just the health insurers.

There are three component problems that need to be fixed:

1. Insurance reform with mandate so everyone can be covered and paying into the pool
2. Provider reform to lower fees for services
3. Tort reform to reduce costs due to provider liability costs

We only got one of those. How do you possibly expect a health insurer to bear the direct responsibility for not only #1, but #2 and #3 also?

Why does a free preventive colonoscopy cost the insurance company $1200-$1800? Doctors could do it for $200 or less if they didn't have such high overhead.

Why does an ER bill $2500 for the same service an urgent care center bills $150 (I have had cases like that)?

I'm not offering a suggestion. You made a comment that people without insurance had, at one time, an opportunity to be responsible and purchase it. I refuted that with an example of a laid off employee who can't afford COBRA payments as an example. There are many more examples and you know all of them. I wish I had the answers but I don't.

 

[Dave020]

I'm not offering a suggestion. You made a comment that people without insurance had, at one time, an opportunity to be responsible and purchase it. I refuted that with an example of a laid off employee who can't afford COBRA payments as an example. There are many more examples and you know all of them. I wish I had the answers but I don't.

I just gave you the answers. There are only two options:

1. Single Payer Government Health Care for All, or

2. Reform the entire health care industry, mandate coverage and GI it, force providers to charge rates not greater than Medicare rates and implement Tort reform to reduce provider liability costs.

Neither of these was accomplished with PPACA. Basically nothing was accomplished with PPACA except to subject millions more to Medicaid level services to obtain the carrot.

In CA, it will be Gold, Silver, Platinum and Bronze inside OR outside of the exchange. Outside cannot charge less premium than inside. Agents cannot sell inside unless they sign a contract prohibiting them from selling outside. Agents selling outside will be prohibited from selling inside. Nice system.

Want to take bets on which Gold plan (in or out) will have higher NFRs for providers (thus more providers and more access)?

 

[Crabcake Johnny]

I think you touched on a huge part of it. I personally believe a chuck of it is price transparency and that so long as carriers can charge the premiums and people pay the premiums then providers can "almost" charge what they want - reference a $1,000 MRI that should likely cost $200 if it was an "open market price."

Almost...an example of this is doctor visits which one can argue has remained static. I can see a doctor and pay OOP for about $100. If you adjust for inflation I'd be willing to bet that's not much more expensive than 30 years ago. Or course, as competition with doc-in-the-box's and urgent care facilities get richer it'll hold those costs down.

Remember, we have a system where I can get admitted to the hospital, spend 2 days and the bill simple "is"....meaning it was nothing agreed upon by me nor transparent. In the mean time a real issue with hospitals is dealing with the uninsured with no means to pay. I've read articles and watched testimony where hospitals have paid over a million for a single uninsured patient.

Of course, the more providers charge the more the carriers simply raise rates. So there's no incentive for anyone to really hold costs down.

A true open market would not have any carriers or insurance - which is an interesting suggestion above. A true open market means no "insurance." That also means prices have to be adjusted for what the market can bear. In this example, by some miracle, that "$10,000" surgery would be $1,500.

 

[CHUMPS FROM OXFORD]

"Agents cannot sell inside unless they sign a contract prohibiting them from selling outside. Agents selling outside will be prohibited from selling inside. Nice system."

Wow!

 

[Crabcake Johnny]

Can someone provide a link to the above info? Never heard of it.

 

[somarco]

If we can get public assistance on having our auto insurance paid,

Are you serious? I have never heard of this. Something unique to your state?

then we are not talking free market at all.

Does a free market dictate what providers are allowed to charge?

That was one of your proposals above to lower the cost of health care.

As you said, health insurance premiums are driven by cost and costs are (to an extent) driven by health insurance. As much as I hate to agree with Al, he has a point.

Americans by and large pay only a small portion of the cost of health care. The figure is somewhere around 10%, no more than 15%.

The rest is paid by insurance.

Health insurance is the only form of insurance that pays for routine care.

Auto insurance plans don't cover tires, brakes and oil changes.

HO policies don't pay for paint, shingles, gutters and lawn maintenance.

Why should health insurance not only pay for routine items but include a copay to boot? If you think this is an incentive for over-utilization you are correct.

As a general rule, Americans have very little skin in the game and they demand Carte Blanche health care.

No wonder we have an expensive system. The only rationing is ability to pay.

European health care is rationed too but in a different way. It is called queue's and denial of services.

 

[NCAgent]

Are you serious? I have never heard of this. Something unique to your state?

Probably unique to NC but I thought it was interesting. It will pay 3 months of premium if the client can bring something to them showing what the bills will be for those 3 months.

I like the idea personally because it allows people access to a car to go to work, and you need to show dire financial straights to get it. Crisis assistance helps with electric and water utilities about to be shut down, as another avenue.

I just think it would be interesting to go to the government, show that you are self-employed with health insurance, and that you can get some health insurance paid for a couple of months while you pull yourself out of dire straights. Full-time people might be able to do it as well if something different happens like a spouse gets unemployed, though it seems like it might be more complicated than it sounds.

I personally would like to pay 250 dollars now to prevent having to spend 2,500 later... and that is what could happen if the person loses their benefits on goes on medicad.


Also, coming from the P&C side I see the health insurance as something for catastrophes, only. If I get into an accident or develop diabetes or a virus, I expect things to be paid. That is a covered claim. If I file a claim that isn't covered (like going to the doctor for a physical or having a couple of coughs) then you have to pay for it. I agree in that I don't expect my insurance to pay for my engine blowing out or giving me a rental car when the vehicle is being repaired for a flat tire.

 

[Dave020]

"Agents cannot sell inside unless they sign a contract prohibiting them from selling outside. Agents selling outside will be prohibited from selling inside. Nice system."

Wow!

It's California-specific (at least my point). The exchange is worried (CA) about adverse selection and they feel that allowing agents in CA to sell both inside and outside of the exchanges simultaneously will create adverse selection inside of the exchange. And they are really not wrong.

The workaround for CA is to use the Navigator model inside the exchange and leave agents selling only outside of the exchange (open market).

It has been discussed out here that agents "could" be allowed to sell exchange plans but if they allow that they need to basically convert the agent to navigator and wipe out adverse selection problems by not allowing those agents the opportunity to drive the highest risks into the exchange and cherry pick the low risks outside of the exchange (where agents can earn normal IFP compensation).

I have talked to my sources at Anthem CA about it and this is their interpretation of the current rules as well as mine from reading various sources.

These ideas were originally developed in SB 900 and AB 1602 which combined create KaliforniaKare. Even of PPACA were repealed today, those two bills still are the law of the land in CA.

Also, under KK, no carrier may sell any plan in California 1/1/14 that is not a precious metal plan either inside OR outside of the exchange. All four plans must conform to exchange model and the price outside of the exchange cannot by law by lower than the same coverage plan inside of the exchange. Also covered in SB 900 and AB 1602.

There will be a 5th plan--Catastrophic, available but in order to buy it a person has to be under 30 and have a valid waiver of mandate from HHS (too poor). Carriers who don't sell the 5th plan inside of the exchange can't sell it outside of the exchange in CA.

We have some Krazy rules out here for 1/1/14.