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

[Crabcake Johnny]

The law also states that:

1) States can to pick and choose which carriers participate in the exchange. One criteria is whether or not states deem that a carrier has had abusive rates increases.

2) States can to establish compensation guidelines. That means "Aetna" doesn't get to set their national comp structure. One state might cap agent comp at $50 per app, another state may have no limit.

3) In order for a carrier to sell plans outside of the exchange (exempted coverage) they must also sell within the exchange.

So no "also ran" companies that do not sell exchange plans will be able to offer anything that's deemed "health insurance."

 

[ABC]

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.

Fed exchange may not be eligible for subsidies as the law was written. This has come from multiple news sources. WSJ

 

[Yagents]

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.

Robin responding in place of batman:

"I'm not talking about self funded plans, don't know them, don't care. Self funded and group plans will have their own pricing structure. I'm just speaking of individuals buying insurance....on or off exchange". But if I understand self funding, who would want to take on the risk when they can push the risk off to the taxpayer"

Robin out.

 

[Crabcake Johnny]

Fed exchange may not be eligible for subsidies as the law was written. This has come from multiple news sources. WSJ

You are correct...back then.....but there is no "federal exchange." You're referring to the back and forth when Obama had that on the table, but he also took it off the table. There's no federal option.

 

[leevena]

Robin responding in place of batman:

"I'm not talking about self funded plans, don't know them, don't care. Self funded and group plans will have their own pricing structure. I'm just speaking of individuals buying insurance....on or off exchange". But if I understand self funding, who would want to take on the risk when they can push the risk off to the taxpayer"

Robin out.

Sorry, thought you were speaking of group. I gotta admit that this thread is interesting and hard to keep track of the comments.

By the way, self-funding is a very easy and simply program for small group. They will take the risk when the price is right, which is one of the ways the exchanges will be selected against.
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Appears to be some confusion on subsidies, so let me clear it up a bit.

There is not maximum on the subsidy. In fact the individual is capped at how much they will required to spend. The subsidy is calculated on a sliding scale, using the Federal Poverty Level/Family Size and ranges from 100% of FPL to 400% of FPL.

For example, a family of 4 FPL for 2012 is $92,200.

These subsidies are referred to as "premium credits" in the law. So the maximum amount the individual is required to pay is capped as follows: 400-300% is 9.5% of income; 133-300% is a range from 3-9.5%, and those at or below 133% will max out at 2% of income.

So if I am a family of 4, making 400% of FPL ($92,200) my maximum cost is $8,759 a year or $730 per month.

 

[stuy119]

Am I mistaken, or is the government subsidy only going to be applied at tax time, not monthly? Won't families have to pay out of pocket and then reclaim their subsidy at the end of the year, or is that going to be pro-rated (and then possibly charged back) at year end?

 

[Crabcake Johnny]

The short answer. No. Or this would implode immediately. You can't ask a family earning 200% of FPL to pay $1,400 a month for health care, then wait until April 15th. Remember that everyone has to have coverage by law (with certain exclusions.)

Instead, the carriers will be asked to eat it and they'll be compensated by the government. It will work in a similar fashion to the great COBRA subsidy. Remember that?

 

[STIBROKER]

Instead, the carriers will be asked to eat it and they'll be compensated by the government. It will work in a similar fashion to the great COBRA subsidy. Remember that?

tatertot and I were debating this today........and for this to work is the insurance company's are going to have to eat this......just like cash for clunkers.....hahahahahahha......

 

[Yagents]

Tax credit immediately applied after they pipe into the IRS system and pulls out your MAGI.

What will suck is the "clawback" where the IRS will come after you and take back part of your subsidy if you......get a raise mid year, spouse gets a job, you get a bonus, or biz is going better. There is a maximum clawback of something like $2500 which was recently raised as one of the "pay fors" for one of those outlandish DC stimulus plans. Anyone on the 400% income edge will want to use the private exchanges and not deal with the chance of a clawback.

 

[Crabcake Johnny]

What's even more fun is the IRS has been neutered by the law. They cannot levy bank accounts, garnish wages or lien property to collect - only take a refund.

They'll have a ton of fun with collection efforts.