HSA Doomed?
- Thread starter Yagents
- Start date
Agreed. There's a reason why insurers will have lower motivation to sell lower premium plans:
- $4000 annual premium for an HSA, with MLR of 20% = $800 allowed for admin. expenses
- $8000 annual premium for a higher benefit plan with MLR of 20% = $1600 allowed for admin. expenses
- $10,000 annual premium for even richer plan with MLR of 20% = $2000 allowed for admin. expenses
HHS has made that easy in 2014, since the plans must meet minimum benefit levels (which are insanely rich, by the way). Proving the necessity of the rate increase is easier when you meet the minimum benefit levels and can prove 20% MLR.
There's a big crunch in the interim, since the MLR rule goes into effect now, 2 years before 2014. The market wants lower cost plans like HSAs, so those plans will exist for a while, but I wouldn't be surprised if the premium charged for HSAs marches nearer to the premium for copay plans to discourage enrollment in them. Insurance companies have ways of making the sale of their target plans more attractive (including broker incentives, by the way).
Insurance Companies must keep an eye on the bottom line. To survive, they must cover costs - in dollar amounts. It isn't easy for the insurance companies to lower their cost of most of those long-term admin. expenses like mortgage/rent, payroll, etc. It will be long after 2014 before they can bring those costs down. Cutting staff only goes so far. Cutting commission takes a small dent out of it.
Worse yet, these higher benefit plans encourage utilization, which raises costs, which.... you know the story.
Good news, the lowered commission percentage rate on a higher premium is still money in our pocket. Bad news, many can't afford those premiums, and it's our tax dollars that will pay for most of those higher premiums. Really bad news, sooner or later China will get tired of funding it.
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HHS and several state DOI have already proved they are not interested in facts. There is no basis for "proving" your requested rate increase. If HHS/DOI thinks the request is out of line you get nailed.
They don't have to justify their position.
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Fun fact. I had someone at the DOI in TN explain to me that they accidently allowed BlueCross a larger increase than they allowed everyone else in TN on medsupp for under 65, so they went back and retroactively allowed the other carriers to change their rates also to the new higher maximum rate increase.
Apparently, the DOI just says, you can raise rates 12%. Then most of them do.
Very odd system, since it does not seem to necessarily reflect actual experience of the book.
Apparently, the DOI just says, you can raise rates 12%. Then most of them do.
Very odd system, since it does not seem to necessarily reflect actual experience of the book.
- Thread starter
- #55
They manipulate everything else, why not for HSA's?
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Final Comments On MLR Reg For Health Exchanges on CDHCI::Consumer-Driven Health Care Institute
New Technical Paper On MLR Reg Risk The final MLR reg under health reform has been published, but final comments are being accepted until January 6. There remains concern that high-deductible plans like HSAs (not HRAs) will be adversely impact. We are attaching and linking a new technical paper by a leading consultant that explains the issues in detail. For ASO and large plans the risk is less than for small, fully-insured plans. And if the market keeps pushing to higher deductibles, more plans will go into ASO-TPA. Bottom Line: "How could the regulation be fixed? One option would be to exempt high deductible plans from the MLR standard altogether. Such an exemption was requested in comment letters submitted by the American Bankers Association HSA Council, America's Health Insurance Plans, and the Council for Affordable Health Insurance. "Another option would be to set a more appropriate MLR for high deductible plans, one that might mirror the actuarial value standard for the plan. For example, a "Bronze" plan with a 60 percent actuarial value would have a 60 percent minimum MLR requirement applied. "A third option would be to allow all insurance companies to count claims paid below the deductible (by the members, not the plan) for covered benefits as "claims paid by insurance" solely for purposes of calculating whether the plan meets the MLR. "A fourth option would be to change the formula for calculating the MLR so that the credibility adjustment factor and cost-sharing adjustment factors are applied independently. This would eliminate the possibility of having zero adjustment applied to high deductible plans."
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Final Comments On MLR Reg For Health Exchanges on CDHCI::Consumer-Driven Health Care Institute
New Technical Paper On MLR Reg Risk The final MLR reg under health reform has been published, but final comments are being accepted until January 6. There remains concern that high-deductible plans like HSAs (not HRAs) will be adversely impact. We are attaching and linking a new technical paper by a leading consultant that explains the issues in detail. For ASO and large plans the risk is less than for small, fully-insured plans. And if the market keeps pushing to higher deductibles, more plans will go into ASO-TPA. Bottom Line: "How could the regulation be fixed? One option would be to exempt high deductible plans from the MLR standard altogether. Such an exemption was requested in comment letters submitted by the American Bankers Association HSA Council, America's Health Insurance Plans, and the Council for Affordable Health Insurance. "Another option would be to set a more appropriate MLR for high deductible plans, one that might mirror the actuarial value standard for the plan. For example, a "Bronze" plan with a 60 percent actuarial value would have a 60 percent minimum MLR requirement applied. "A third option would be to allow all insurance companies to count claims paid below the deductible (by the members, not the plan) for covered benefits as "claims paid by insurance" solely for purposes of calculating whether the plan meets the MLR. "A fourth option would be to change the formula for calculating the MLR so that the credibility adjustment factor and cost-sharing adjustment factors are applied independently. This would eliminate the possibility of having zero adjustment applied to high deductible plans."
