The Eye Popping 2016 Obamacare Rate Increases Are Out

[AllenChicago]

The ACA market might look like this in a couple years, where group is cheaper than IFP, and people seek out employers with group plans, and more employers implement them.

In this area, that sentiment has always existed. People would rather be on a group plan than IFP. Although the primary reason before ACA was that there was no pre-x exclusions with a group/employer plan. Secondary was that employers were paying all or most of the premium.

 

[tins]

I'm looking at around a 550% increase, since Assurant is going out.
Now paying $83/month, Jan. 1st will join wife's work plan @ $445/month

 

[AllenChicago]

I'm looking at around a 550% increase, since Assurant is going out.
Now paying $83/month, Jan. 1st will join wife's work plan @ $445/month

I guess employers paying most of the employee/family premium is a thing of the past. Is $445 the full premium for yourself, or is the employer contributing?

 

[RayNY]

I guess employers paying most of the employee/family premium is a thing of the past. Is $445 the full premium for yourself, or is the employer contributing?

I'm seeing a lot of employers just go with the "safe harbor" minimum defined contribution under law.

Cheapest compliant plan minus 9.5% of lowest paid eligible employee's wage.

Anyone on a ES/EC/FAM plan is getting screwed.

 

[tins]

I guess employers paying most of the employee/family premium is a thing of the past. Is $445 the full premium for yourself, or is the employer contributing?

Full premium- the employer pays my wife's premium...son and I may join plan, but pay for ourselves.

 

[Ann H]

Large and Mega size employers tend to pay a higher percentage of the premium (for employee and also for dependents). Of course, industry matters. This wouldn't hold true for labor-intensive groups like restaurants, hotels, etc. But as a general rule, if you work for a mega size group, you couldn't purchase insurance elsewhere for less, much less get the kind of benefits that the group plan offers.

For medium to large size groups of 50+ employees, the amount the employer contributes depends on the employer and the expectations in that industry. Of course, this is regional, because in some parts of the country small employers contribute more to the premium, and in other regions employers contribute less.

For small groups, the employer contribution is usually paltry. The bare minimum required by most insurance companies is 50% of the employee's premium and 0% of the dependent's premium. That usually meets or exceeds the 9.5% rule.

 

[Nasha]

Can anyone guess what year of a Medicare beneficiary's enrollment in medicare costs the government the most? 65 (majority speaking) Why? Because that's the year when all medical tests, procedures, and treatments that have been put off for 20 years because the individual had no insurance are done.

Within the next few years we will start to see a decrease in premiums. Why?
1. The previously uninsured sought all their recommended preventive medical tests and procedures when their insurance became effective.
2. More people will have gotten insured. As of today a larger percentage of those people with new ACA plans are the sickest and are now being treated for all those illnesses that the preventive tests revealed. (adding more healthy to the pool)
3. Those grandfathered plans, the ones that were unwritten for healthy,thin people, will go away and all the healthy people will enter the ACA plan pool. (especially as the tax penalties continue to increase)
4. The availability of "free" preventive services will be responsible for catching things early, before they become expensive to treat.

There are other factors too. ( Fraud, waste, and abuse is still a big problem that needs more attention) It wasn't my intention to write a whole paper on the issue, but I really don't understand why more people don't see that the factors I listed above are driving increases in premiums and that soon we will be seeing decreases in premiums for the same reasons. (and decreases in some medical costs as more people can "pay" for services they get.)

 

[RWKAgency]

Can anyone guess what year of a Medicare beneficiary's enrollment in medicare costs the government the most? 65 (majority speaking) Why? Because that's the year when all medical tests, procedures, and treatments that have been put off for 20 years because the individual had no insurance are done.

Within the next few years we will start to see a decrease in premiums. Why?
1. The previously uninsured sought all their recommended preventive medical tests and procedures when their insurance became effective.
2. More people will have gotten insured. As of today a larger percentage of those people with new ACA plans are the sickest and are now being treated for all those illnesses that the preventive tests revealed. (adding more healthy to the pool)
3. Those grandfathered plans, the ones that were unwritten for healthy,thin people, will go away and all the healthy people will enter the ACA plan pool. (especially as the tax penalties continue to increase)
4. The availability of "free" preventive services will be responsible for catching things early, before they become expensive to treat.

There are other factors too. ( Fraud, waste, and abuse is still a big problem that needs more attention) It wasn't my intention to write a whole paper on the issue, but I really don't understand why more people don't see that the factors I listed above are driving increases in premiums and that soon we will be seeing decreases in premiums for the same reasons. (and decreases in some medical costs as more people can "pay" for services they get.)

All due respect but that will never happen. In NY, NJ and MA, we have had reform since the 1990's. Guaranteed issue, community rating and a very pro-consumer 85% MLR and what do we have for our efforts? The highest rates in the country. All of the stuff you wrote sounds great but the fact is, community rating doesn't care about young healthy people except in that they are unfairly targeted in that their rates are not accurate based on the risk. Another thing, community rating does nothing to address utilization costs so what you get are renewal rates that are continually chasing utilization losses. Bottom line, since 1993 we have had markets where everyone (healthy and sick) were in the same pool, insurance carriers had "wellness benefits" and NJDOBI had aggressive anti-fraud units and we still had the highest rates in the country.
Yes I agree that fraud, waste and abuse are a problem but they are in now way near the problem of a lack of risk management principles in developing rate structures for new and renewal business.

 

[dgoldenz]

lol @ rates going down. Not a chance.

 

[Nasha]

You have some good points for sure. However, the only things you didn't mention that NY NJ and MA didn't have before were subsidies and increasing tax penalties. They still may have had a disproportionate amount of sicker vs healthy, older vs younger signed up with plans right now. I don't know how it will eventually play out, but I certainly hope I'm right even if takes a little longer.