Individual Health Plans Going South Fast...But Why?

Discussion in 'Health Insurance and Ancillary Benefits' started by AllenChicago, Sep 17, 2015.

  1. AllenChicago
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    AllenChicago Guru

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    Why is it that health insurers are making so many unwelcome changes to Individual Health plans all across the nation?

    For example... Our BCBS is making these 3 plan modifications all at once, on January 1, 2016. But only to Individual Health plans. Not to Small Group plans..

    1. Raising Premiums in IL by an average of 31%.
    2. Reducing the Medical Network PPO participation of physicians, hospitals and other facilities by 30% statewide.
    3. Converting the Prescription Formulary from "Brand Name" to "Generic Preferred". I don't know the implications of this, but it doesn't sound good.

    When HHS first gave directions to health insurers on how to design ObamaCare plans for the individual health market, there were high standards and that had to be met. Health insurers had to design the Silver benchmark plan in every state to have benefits on par with the strongest small group health plan in that state. This was circa 2011/2012.

    Fast forward to 2016, and we have IHPlans having their benefits reduced, making them significantly inferior to small-group plans, while their premiums are being increased to, or above, what a small-group participant would pay for his/her coverage.

    If BCBS (or any insurer in a given state) has 50,000 lives insured by Individual Health Plans, and 50,000 lives insured on Small Group Plans, why are the 50K Insured by IHPlans such a high risk that their coverage needs to be jacked up in price, and stripped down in benefits, making what they have vastly inferior to small group plans...by every measure. I don't get it.
    :nah:
    -Allen
     
  2. Newby
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    Aren't the individual plans mainly full of non-working low income people? And the group mainly full of working class medium income people?

    If that's true, doesn't that answer the question?
     
  3. somarco
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    Participation requirements for group make them desirable vs IFP. Plus as Scott pointed out, the carriers don't have to put up with the subsidy BS process.
     
  4. kgmom219
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    The generic preferred formulary has significantly less drugs on formulary, more step therapy, more prior auths. Specialty RX required. Many drugs just "fall off" and are no longer covered.

    IMO, Indy plans are more expensive to administer. Its different type of client. My Indy clients who converted on 1/1/14 are way easier on me, than true Indy people. (And due to numbers and network, they will be converting back on 1/1)

    Small group changes probably happened on 1/1/14. What RX formulary do they use? What network?

    In IL, with 94% market share, BCBS gets to do whatever they want. They tighten the network based on provider contracts, save some money on RX and VOILA....the PPO is now profitable. What are people going to do? Buy a co-op thats about to go out of business?
     
  5. TN_agent
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    Not to mention IHP participants can sign up in February, have their knee replacement in March, and stop paying in April. A little harder to get off of a group plan unless you quit.

    We just had training with one of our carriers instating a major increase and they basically said as much. A lot of the previously uninsured folks signed up, had their procedures, then stopped paying. They just don't see the value in insurance and don't make enough money to really care about the fine. Oh, I owe $500, just take it out of my EITC, bro.

    Same people who get state minimum on auto (if they get it at all). No assets to protect, the "well, they can come after me if they can find me" crowd.
     
  6. AllenChicago
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    AllenChicago Guru

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    Thankyou everyone for the replies. TNAgent's response makes the most sense, particularly in Illinois, because everyone under $16,800 is either on expanded Medicaid, or uninsured.

    Eighty percent of my IHPlan clients are sole-proprietor individuals or families and the other 20% are employed in jobs that don't offer health insurance. Virtually all of them carried health insurance before ObamaCare came along.

    It must be a relative few people in the state gaming the system, and causing Individual Health Plans to begin sink due to the weight of their claims.

    The liberal media is screaming insurance company greed, but there's no statistics to back their claim. Our top carriers are all losing money in this sector. None of them had to pay an MLR rebate.

    And thanks for that Formulary explanation, KGMom. I had no idea what the differences were between the two. BCBS is planning webinar, just to explain the changes, so it must be a big deal.

    With 30%-40% of Medical providers and facilities missing from the new BCBS 2016 network and the huge premium increases, a great many clients will be transferring over to the Land of Lincoln Health Co-op. It took 1% of 2014 enrollees, and 25% of the 2015 enrollees. It will be a much higher percentage for 2016. Most are relatively healthy, but as TN_Agent stated, there are big-time gamers out here. No ObamaScare Co-op can withstand many of them at this early phase.

    Thanks again everyone! :yes:

    -AC
     
  7. TN_agent
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    Also thought of another one: very high utilization is a side effect of low MOOP in certain populations.

    In TN, we didn't expand medicaid so there are some very generous plans available for less than 150% of poverty. Like MAX OOP of ~$500 for the entire year, in some cases.

    I am imagining a HIGH level of prescription drug utilization on that one. Especially of the controlled substance type.

    I know of a person who was very pleased that they would now be able to see their psychologist/psychiatrist weekly, as well as their dermatologist, rheumatologist, endocrinologist, etc. They hit the ~$500 max OOP with an outpatient procedure in January so all of the visits and tests are "free".

    they pays their premiums all right, and the carrier (and I guess the gov't for the CSR) pays out the wazoo.

    No skin in the game=nothing to lose if you use.
     
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