So What's Really Going to Happen to the Group Market

[ABC]

Well I disagree with the everyone.

First no one will be able to afford a plan in the exchange even with the subsidies. The subsidies are up to $5,000.

If your families plan is going to cost $25,000 a year you still have to come up $20,000. Not going to happen. If your employer offers you a group plan then you might not be eligible for the subsidy in the first place.

So now lets step outside the exchange. There will be GI & composite rates but the plan design will be a lot different that what is in the exchange. The prediction is individual premiums will still go up 3x outside the exchange. That is about what a group plan cost now.

Small group market will change. Groups under 10 lives could drop out of group benefits. They are not covering employees as it is so its not that big of an impact. I talk to these type of groups every day.

Companies will still continue to offer group benefits because they will want to attract the best talent. If the company is paying a portion of the premium it will be much cheaper for the employee.

The defined contribution group platform will become a staple for group plans under 50.

There is a strong chance that we could see self funded plans for groups under 50 that make sense. I also think ACO type plans could have a positive impact on rates for certain groups.

The group market will still be there. It will be different than it's current form but still there.

 

[leevena]

Well I disagree with the everyone.

First no one will be able to afford a plan in the exchange even with the subsidies. The subsidies are up to $5,000.

If your families plan is going to cost $25,000 a year you still have to come up $20,000. Not going to happen. If your employer offers you a group plan then you might not be eligible for the subsidy in the first place.

So now lets step outside the exchange. There will be GI & composite rates but the plan design will be a lot different that what is in the exchange. The prediction is individual premiums will still go up 3x outside the exchange. That is about what a group plan cost now.

Small group market will change. Groups under 10 lives could drop out of group benefits. They are not covering employees as it is so its not that big of an impact. I talk to these type of groups every day.

Companies will still continue to offer group benefits because they will want to attract the best talent. If the company is paying a portion of the premium it will be much cheaper for the employee.

The defined contribution group platform will become a staple for group plans under 50.

There is a strong chance that we could see self funded plans for groups under 50 that make sense. I also think ACO type plans could have a positive impact on rates for certain groups.

The group market will still be there. It will be different than it's current form but still there.

You say you disagree with everyone, but I said essentially the same thing.

 

[Crabcake Johnny]

Well I disagree with the everyone.

First no one will be able to afford a plan in the exchange even with the subsidies. The subsidies are up to $5,000.

.

Can you provide a reference to that? Reading the signed legislation, no such cap is mentioned.

Reference the chart:

Patient Protection and Affordable Care Act - Wikipedia, the free encyclopedia

It outlines what people will be paying per FPL percentage.
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Did a little more research, found an online calculator. I don't not believe there's a cap:

Health Reform Subsidy Calculator - Kaiser Health Reform

Plug in a family of 4 earning $40,000 and the amount of the subsidy would be just over $12,000.

 

[Yagents]

Group will not disappear, but continue it's decent. I agree the DC model with an HRA achieves the same thing....ER paying for part of premium. The smart ones will go this way.

Subsidies have no maximum, you will pay 8-9% of you MAGI. Subsidies for the other 92%.

Plans outside the exchange have to be the same price and actuarial value as inside the exchange, but yes the price will go up for IFP.

 

[Crabcake Johnny]

Not only do the subsidies have no cap, there's a maximum amount that can be spent on premiums per a percentage of your income based on your FPL percentage or there's no fine.

I have to look at the numbers again, but for a family that falls between 200% to 300% FPL they can only be required to spend, say, 7% of their income on premiums.

Now, re-read my initial post and look at the calculator link above. Note that a family earning $40,000 would only have to pay $166 per month for premiums.

And people don't think group's gonna implode? Anyone want to cite a major employer covering an entire family for a low-level worker where more than $166 per month isn't deducted from their check. Happy hunting.

 

[ABC]

Leevena,
You say the under 20 life market will be dead?
I do not agree with that. The micro groups under 10, maybe.
There will be successful companies that will invest into their employees so they get the best talent.


Johnny I will have to search for that Doc. that stated the $5,000 because I think it was from Kaiser.

It looks like Kaiser has updated their quoting software and I would think that organization has the most up to date information.

I thought there was debate on if a federal exchange was eligible for subsidies? The law is written that only the state based exchange is eligible.

 

[Crabcake Johnny]

ABC...I'm not sure if you're confused or not. Everyone is eligible for the subsides. Every state must have their own exchange set up by 2014. Now, if they don't want to administer it, fine, the feds will do that but it in no way affects subsidies.

 

[leevena]

Group will not disappear, but continue it's decent. I agree the DC model with an HRA achieves the same thing....ER paying for part of premium. The smart ones will go this way.

Subsidies have no maximum, you will pay 8-9% of you MAGI. Subsidies for the other 92%.

Plans outside the exchange have to be the same price and actuarial value as inside the exchange, but yes the price will go up for IFP.

Sorry, but I need to disagree with part of your comment about plans outside the exchange.

There is no requirement that the "price" be the same for plans outside the exchange. Also, while we are on the subject of outside the exchange, any self-funded plan offered via this route is not even subject to the Essential Health Benefits requirement. I know of a few carriers that offer self-funding to groups as small as 5. My guess is that we will see someone start offering it below 5 in the not so distant future.
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Leevena,
You say the under 20 life market will be dead?
I do not agree with that. The micro groups under 10, maybe.
There will be successful companies that will invest into their employees so they get the best talent.


Johnny I will have to search for that Doc. that stated the $5,000 because I think it was from Kaiser.

It looks like Kaiser has updated their quoting software and I would think that organization has the most up to date information.

I thought there was debate on if a federal exchange was eligible for subsidies? The law is written that only the state based exchange is eligible.

Yes, you are correct, my use of the word "dead" was too broad. What I mean is that for the most part most of these groups will probably opt out and go the exchange route. Don't know the exact cut-off Good point, thanks.

 

[Yagents]

actually, it does state it in the law about the price being the same in and outside the exchange. Otherwise, adverse selection at it's finest would occur. They are stupid in DC, but not that stupid.

 

[leevena]

actually, it does state it in the law about the price being the same in and outside the exchange. Otherwise, adverse selection at it's finest would occur. They are stupid in DC, but not that stupid.

Then riddle me this batman....how can a self-funded plan outside the exchange cost less?

And by the way, there will be significant adverse selection occuring with the exchange. The govt has already recognized that.