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Yagents, I flunked physics.
Can you expand on the cause/effect that UHC's exit would have?
When UHC entered the Marketplaces in 2015 for the first time, what cause/effect did that have on other companies in the IFPlan marketplace?
United Health May "play" Next Year
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Yagents, I flunked physics.
Can you expand on the cause/effect that UHC's exit would have?
When UHC entered the Marketplaces in 2015 for the first time, what cause/effect did that have on other companies in the IFPlan marketplace?
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I just read that other carriers would panic because all the people who ruined UnitedHealth's bottom line would have to go someplace, and none of the carriers would want to gain THAT market share. Especially with the bailout program ending about that time.
The economics of participating in the Marketplace doesn't change from carrier to carrier, if it didn't work for Assurant and didn't work for UHC, both of whom are Fortune 500 companies who generally know how to turn a profit in varying business segments, why should it work for any of the others?
UHC's demise in this business space is much more confusing to me than Assurant's (who was done in by their great network and competitive rates, particularly on Platinum plans). UHC offers a bastardized PPO and an HMO, neither of which is particularly good. They did offer a good Platinum plan in 2015 but eliminated in for 2016 (still offer Gold), it's tough for me to imagine their 2016 enrollments pushed them to this decision, it has to be something that has happened with their 2015 book of business that got the attention of headquarters.
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They're 2015 book of business has caused them to lose a lot of money. But because they were basing premiums that had to be turned in by May or June on claims received as of that point and projected they under priced the market pretty severely in several states. As an example in several of our areas they are $150 cheaper per month then the next bronze plan on the hundred percent FPL customer. So all of the sick people naturally go that way. At least with the med supp market when those sick people are locked into an increase in premium they can't just jump out and go to the cheapest plan the next time.
I think that the statistic shared was that 18 customers nationally were 10% of their national claims this year. It only takes a few bad apples to upset the cart.
I also think that several of the state specific blues that are non profit don't have to answer to shareholders. When under 65 health in one state is their only market they cease to exist if they wanted to pull out of the market or drop commissions. Personally I think utilization is probably much less on a bronze plan with copays than on a silver plan with a $500 max out of pocket. All bronze plans for my customers if they haven't had insurance before.
I am into wave 2 of cancelled plans as carriers are discontinuing grandfathered plans. Sticker shock.
Talked with a lady yesterday, age 60. Had HSA qualified plan with $3600 ded then 100%. Current premium $321.
New option is $4100 ded and $730 premium.
She is not pleased.
If 18 customers can generate $50,000,000+ in claims, as this suggests, it supports what I am saying, that this business model can't work for any insurance company without the government eating those excessive amounts-whichever company gets those enrollments will be buried on an annual basis.
For the longest time the axiom that 20% of policyholders generate 80% of claims have held true. I doubt that has changed much but probably what has shifted is the percentage of claims that exceed $50k.
Some carriers are reporting an unusually high number of transplant policyholders. Makes you wonder if the criteria for transplant eligibility has changed.
Now that anyone can buy health insurance (as long as they can pay the premium) and risk pools have been neutered I suspect many of these extremely ill people are coming from risk pools.
GA never had a risk pool but a modified assignment system where the state assigned qualified prospects to a specific carrier on rotation. I probably moved 15 - 20 such people on opening day and every one of them opted for platinum plans.
The design of Obamacrap was incredibly dumb from a risk perspective. No surprise carriers got an inordinate number of really sick people and fewer young, healthy people.
The problem isn't so much a failure of the federal reinsurance program but way too much meddling by DC in the design stage coupled with intense pressure on carriers to keep rates low (relatively speaking). The idea was to create an illusion of affordability.
What a freakin joke.
Ocrap in its' current state is not sustainable. Something has to give and single payer isn't the answer, or even a short term reality.
No doubt Ocrap will morph over the next few years (depending on the outcome of the 2016 elections) but how much and how quickly is anyone's guess.
Certainly consumers will see fewer choices (carriers and plans), smaller networks (more HMO's) and more OOP for Rx in particular.
The carriers have very few tools to manage risk since underwriting is off the table but they can manipulate exposure with smaller networks, higher copay's (coupled with copay's after a deductible) and increasing Rx deductibles before copay's.
As usual, the consumer suffers when the govt decides to make things "better".
Some carriers are reporting an unusually high number of transplant policyholders. Makes you wonder if the criteria for transplant eligibility has changed.
Now that anyone can buy health insurance (as long as they can pay the premium) and risk pools have been neutered I suspect many of these extremely ill people are coming from risk pools.
GA never had a risk pool but a modified assignment system where the state assigned qualified prospects to a specific carrier on rotation. I probably moved 15 - 20 such people on opening day and every one of them opted for platinum plans.
The design of Obamacrap was incredibly dumb from a risk perspective. No surprise carriers got an inordinate number of really sick people and fewer young, healthy people.
The problem isn't so much a failure of the federal reinsurance program but way too much meddling by DC in the design stage coupled with intense pressure on carriers to keep rates low (relatively speaking). The idea was to create an illusion of affordability.
What a freakin joke.
Ocrap in its' current state is not sustainable. Something has to give and single payer isn't the answer, or even a short term reality.
No doubt Ocrap will morph over the next few years (depending on the outcome of the 2016 elections) but how much and how quickly is anyone's guess.
Certainly consumers will see fewer choices (carriers and plans), smaller networks (more HMO's) and more OOP for Rx in particular.
The carriers have very few tools to manage risk since underwriting is off the table but they can manipulate exposure with smaller networks, higher copay's (coupled with copay's after a deductible) and increasing Rx deductibles before copay's.
As usual, the consumer suffers when the govt decides to make things "better".
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Bob: Don't you love Uniteds backdoor slider : the famous post deductible copay ? Gotta love that play...Copays to infinity !
Yagents, I flunked physics.
Can you expand on the cause/effect that UHC's exit would have?
When UHC entered the Marketplaces in 2015 for the first time, what cause/effect did that have on other companies in the IFPlan marketplace?
Just a for-instance since NY had a major player pull out of the market this year (HRINY).
Announcement was made after other companies had already filed, and I'd presume UHC would do the same thing (Filings are around May, they'd announce around Q4). Other companies couldn't change plans/rates to adapt to the risk.
So, they changed what they could, network, commissions, bonuses, processes, and overrides.
Companies that saw "excessive" applications quickly lowered or removed comp to drive business elsewhere-with little or no notice. "Effective 16 hours ago", and that's no joke (4:34PM notice that everything since midnight is subject to a new schedule).
Some removed key hospitals from their network. Others have placed barriers to enrollment. For instance, BCBS won't release rate sheets and requires you to quote all small groups before submitting an app.
Some companies, like Aetna, just plain don't offer any individual product anymore in the state.
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