How to Solve the Pre-Existing Condition Problem

moneyThe primary sticking point in health reform is what to do with high -cost individuals who have pre-existing health conditions. People with episodic medical needs are easy to insure, while those with persistent needs are far more difficult unless insurers are allowed to underwrite enrollees’ risk. Republicans have long favored high-risk pools to cover individuals who are otherwise uninsurable. Prior to the Affordable Care Act (ACA) just over two-thirds of states had some type of high-risk pool. Most people turned down prior to the Affordable Care Act could ultimately obtain coverage either at a higher price or after meeting some preconditions. In 2011, high-risk pool enrollment varied from 0.1% in Alabama to a high of 10.2% in Minnesota. By most accounts only about 2% of people are uninsurable. However, one Kaiser Family Foundation study argues the actual rate may be a dozen times higher.

Health reform’s biggest challenge

Medical needs are not distributed evenly throughout the population. The healthiest 50% of Americans only account for about 3% of medical spending. The healthiest half of the population also has a 73% chance of remaining in the healthiest group the following year. By contrast, the sickest 10% of Americans have medical bills that are 100 times, on average, of those in the healthiest 50%. The sickest 10% accounts for about half of medical bills in any given year. Nearly half of those (45%) will remain among the least healthy 10% of big spenders the following year.

Create a high-risk pool without actually having one

Republicans are now considering so-called invisible high-risk pools to protect those with pre-existing conditions while making coverage affordable for those with few health needs. Invisible high-risk pools are a type of reinsurance program that covers the cost of insured claims in excess of a certain amount and/or targets high-cost claims for specific conditions. Maine experimented with this strategy in 2011.  The individual market in Maine had deteriorated due to regulations requiring guaranteed issue and strict community rating. The result was adverse selection: premiums doubled and enrollment plummeted by two-thirds over an 18-year period (1993 to 2011).

To counteract the incentive for healthy people to leave the individual market, Maine expanded its premium rating bands to 3:1 from an earlier ratio of 1.5:1. The state also agreed to reinsure 90% of claims between $7,500 to $32,500 and all claims above that $32,500 in the individual market. After Maine relaxed its rating bands and created an invisible high-risk pool, premiums for those in their 20s, 30s and 40s dropped by about $5,000 per year, on average.  Premiums for individuals in their 50s fell by $6,000, while premiums for those 60 years old fell by about $7,000 annually.

Alaska also realized high-cost individuals are disproportionately driving up premiums, making coverage a bad deal for healthy enrollees. Alaska created a two-year reinsurance plan that targets specific conditions and reimburses costs for selected high-cost enrollees. Alaska contributes $55 million a year to cover very sick individuals.  Whereas state residents were initially facing premium increases of 40% from insurer Premera, insuring the sickest enrollees in a separate risk pool kept the increase to about 7%.

Conclusion

A combination of high-risk pools and reinsurance all sound like great ideas for states to experiment with. One criticism I have heard is that government-funded reinsurance is a step towards Medicaid-for-All.  As the cost of health insurance increases over time, all that is required to stumble into Medicaid for All is expanding the risks government is willing to insure.

Comments (57)

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  1. Barry Carol says:

    Devon – For a state to cover 90% of claims costs between $7,500 and $32,500 and then 100% above that would be enormously expensive when many states are already struggling to fund their existing obligations. Alaska is a special case because it has a large state fund thanks to oil royalties paid into it since the late 1960’s and its population is quite low. How much do you think such a scheme would cost the states of CA, TX, FL, NY and IL? By this logic, if I offered to cover my first $7,500 of claims plus 10% of the next $25,000 out-of-pocket, my premium should be zero and my maximum out-of-pocket exposure would be $10,000.

    Reinsurance sounds good but the cost and who pays for it is never explicitly addressed. In the employer sponsored health insurance world, an attachment point as high as $250K is considered low and expensive. If the best private insurers can do is to limit their claims exposure to no more than $10K for any one member, then it’s not much of a leap to Medicaid for all from there. Whether we use visible high risk pools or so-called invisible high risk pools, the cost probably significantly exceeds what most state or federal politicians are prepared to vote for.

    • Devon Herrick says:

      I agree with your first point. I thought Maine was being especially generous. I understand having the government reinsure high-cost claims is an old idea dating back to the Nixon era. A benefit of visible high-risk pools is plan administrators require significant premiums in return for being in the pool. I don’t think it’s asking too much for people with significant health conditions to pay more for access to insurance.

      • Barry Carol says:

        Millions of people earn too little to afford health insurance even if they can pass underwriting. Others are uninsurable because they drew a bad genetic hand. Still others are sick because they made bad lifestyle choices and are therefore less sympathetic and viewed by many as less deserving of help.

        Since health insurance is inherently expensive, especially for older folks and those with known health risks, I support subsidies to help people who can’t afford health insurance on their own to acquire it. Subsidies could bring the premium cost down to zero or a nominal number for those at or below the poverty level to maybe 5% of modified adjusted gross income at 200%-250 of the FPL to a maximum of 10% of MAGI for incomes above 300% of the FPL with no income ceiling to qualify for a subsidy.

        If there are a few wealthy real estate and oil and gas investors who manage to zero out their income through tax shelters and wind up qualifying for a subsidy, it’s not the end of the world in the scheme of things. Politicians, if they want to fix that problem, should do a better job of eliminating tax loopholes and better defining economic income.

      • Bob Hertz says:

        Thanks for a fine article, but your last sentence in the prior post is not helpful. You say that people with health conditions should pay more for insurance,and I do not really disagree. I would guess that more than half the adults with chronic illnesses have ‘earned’ their diabetes or high blood pressure with years of bad habits.

        However, your sentence leaves the impression that higher premiums for the sick will solve the problem.
        It won’t. The true actuarial cost of health insurance for someone with a cancer history is at least $25,000 a year…..and much higher than that with MS or rheumatoid arthritis or Parkinson’s.
        If we make them pay $8,000 a year instead of $5,000 for insurance, this is not sufficient. Federal help is needed somewhere.

        • Devon Herrick says:

          Bob,
          When I said people with chronic conditions should pay more to access insurance I was really just thinking of a way to boost the funds available to the high-risk pool. Under ACA it’s mostly the young who are supposed to shoulder the burden.

        • MNIce says:

          “Federal help is needed somewhere.” Absolutely not. The federal government is $20 trillion in the hole precisely because so many people look to the federal government to provide anything and everything. If you had a rudimentary understanding of federalism, you’d know providing for the needs of individuals is no part of the constitutional duties of the federal government.

          It MAY be a role for state or county governments. Government is not charity. It is force. In the case of the federal government, that force is supposed to be primarily exerted in external matters – defense and diplomacy in international affairs. The federal government also has a part to play in preventing states from engaging in predatory business practices, such as writing insurance regulations so only a favored few companies will offer policies within the state. But all powers not enumerated to Congress in the Constitution belong to the several states or to the people. Providing health care, health insurance, retirement, housing assistance, etc. are not among the enumerated powers.

          But when it ventures into actually providing health insurance, mandating or providing incentives for it, the federal government becomes a part of the problem rather than an answer. The over-reliance on insurance removes almost all restraint on the pricing of health care, for the cost is then passed on to somebody who had no voice in setting the amount. In particular, when the funds are taken from the U. S. Treasury, they are borrowed, with the debt to be repaid by our children and grandchildren. Placing the obligations of debt upon them without their consent for something purchased for others is theft by swindle. It is immoral.

          Instead of scheming to get money from this or that group of government victims, it would be much better to focus on improving medical economics so health care doesn’t cost so much. There is no good reason for an item to cost ten times the standard version simply because it has the word “medical” on the label. A large share of the blame for this lies with the FDA and its enabling statutes. Another share lies with the unrestrained nature of civil litigation, with unreasonably large damage awards and absurd legal fees.

          Simply put, making health care costs reasonable would go a long way to solving the problem of paying for it. By the way, for a number of pre-existing conditions, there are private charities that do tremendous work in helping families cope with the expenses. Some contribute to research to improve treatment as well helping patients with their expenses. This is where our primary efforts should go. If you are concerned for the poor and the sick, you should voluntarily contribute from your personal resources rather than demanding government take it from others by force.

          • Wayne Grabow says:

            MNIce: Thank you. It is rare to see such a reasoned argument concerning the role of the federal government. Government is not our parent, not charity; as you say it is force.

          • Janice Michaud says:

            Thank you MNice!
            Your voice is truly resuscitative.

          • CancerEd says:

            MNIce: I like your Federalism reminder. I suppose the same discussion could be had around the Federal Housing Administration, the Department of Agriculture (food stamps), and numerous other federal programs that are funded by taxpayers to “assist” those in need, or those that have learned to take advantage of these services, needy or otherwise. Proud Americans should be proud of these programs – proud that our economy, ingenuity and work ethic allow us to take care of our fellow citizens. At some point, however, many of these programs devolved from assistance to full-blown existence.

  2. Bob Hertz says:

    The Maine program sounds like a good dream, but their attachment points were very low. Another very small state, too.

    Let’s say we set the attachment point at a more realistic $50,000.

    Let’s say further that claims over $50,000 will usually equal about one half the total claims in any insurance pool.

    The individual non-Medicaid market has somewhere around 20 million persons today, probably a little less but let’s leave it at 20 million.

    If the average insured costs $6,000 a year, then total claims equals $120 billion.

    Half of that equals $60 billion.

    That would be the government-paid reinsurance that would be needed to force down premiums.

    Not coincidentally, that is also an amount of money that would be needed for fully funded high risk pools, yet another way to force down premiums.

    Is this too much for the USA? I do not know. I will comment that almost every other first world nation spends large amounts on one form of reinsurance or another. (Germany, Denmark, Switzerland, et al et al.)

  3. mark poyhonen says:

    Countries having high levels of subsidized health care, France and Italy are good examples; require that everyone pay into the government health fund. In America we all pay 1.45% of income, (hiked by an employer tax of an additional 1.45%), into our Medicare system but only people getting Social Security get the benefits. In 2015 the American Hospital Insurance Trust Fund garnered 275 Billion in taxes and spent 646 billion in services for only 15% of the population, (according to AARP).
    So the illustration here is that we already have a universal insurance system that is paid into by every worker but the benefits are only distributed to retired people and the outlays for this insurance scheme exceed the inputs by about 371 billion dollars a year. The numbers get MUCH worse as they are analyzed to include every citizen.
    Consider, for a moment, what insurance is supposed to provide. Health insurance is supposed to pay for the professional services, equipment, and drugs provided by licensed physicians and hospitals. In order to Control prices and services the government and insurance companies create rules, regulations, and make an effort at price fixing procedures. They require immense databases to achieve these goals and you can appreciate the health code designation of being bitten by a duck as just another line item under their scrutiny. If you think that is a bit complicated, there is another entry for walking into a lamp post. Too much? How about the designation of having walked into a lamp post for the second time?
    Clearly we have too many ducks, lamp posts, and regulatory constrictions that are meant to control costs but inadvertently end up controlling lives and behavior.
    Since the insurance is supposed to pay for professionals – take a look at what we could do with the 275 billion collected every year:
    Give every licensed physician $100,000 …. .90 billion per year.
    Give every registered nurse $30,000 ……… 90 billion per year.
    Give every hospital $17 million………….…95 billion per year.
    I just ran out of Medicare funds at 275 billion but our government spends over 646 billion on Medicare and adds another 546 billion with Medicaid, (2015 numbers). Where does this money come from? The general fund supplies the extra largess – – in case anyone is noticing our country currently has 20 Trillion in debt.
    Well what if we doubled the tax rate for Medicare and now garnered an extra 275 billion for:
    $75,000 for every licensed Nurse Practitioner…..…..8.3 billion per year.
    $45,000 for every Physician Assistant………………3.2 billion per year.
    Drug subsidies………………………………….….263 billion per year.
    There – everyone in the USA would now be covered to some extent and to receive the subsidies all the accepting parties would have to do is not turn away any citizen from medical services. The government would no longer be in an insurance business where they have proven to be incredibly inept. The Government involvement would be relegated to a disbursement of collected funds to health professionals. The savings in paperwork, regulating, and oversight would immediately save about 30% over current medical costs dictated by insurance. If the extra taxes are too big a burden consider paying the extra 275 billion from the general fund while still reducing the overhead by over half a trillion dollars per year.
    Nothing is free, however, and the amounts mentioned will still not cover the total expenses. An average doctor’s earnings are about 160,000 per year and how will they make an income – not to mention the pay of specialists who spent years in getting certified?
    Co-pays.
    Let doctors, hospitals, drug venders, and specialists charge whatever they desire in the form of co-pays. Some doctors in Kansas are charging $50.00 per month for adults and $10.00 a month for children to cover all medical services and they negotiate a discount of over 80% for drugs used by members who pay the monthly service fee. (Only 100 patients would be needed to add 60,000 per year but facilities and staff are still an expense that requires income). Catastrophic insurance can be purchased to cover the large co-pays that may be demanded for major medical services like cancer treatments, transplants, significant surgeries, expensive drugs, or continuing services like dialysis.
    In the future, one might see catastrophic health insurance ‘bundled’ with car and home insurance plans. Medicare, Medicaid, and Obamacare would be gone. Only the Medicare tax would remain. Paperwork would be an addition to the IRS tax form.
    There is more the government could do of course – Allow health employees, doctors, assistants, etc. to pay minimal or no taxes for example. Tax free health saving accounts and catastrophic insurance sales across state lines could be allowed and perhaps, someday, be offered by employers that allow employees to carry the account privately or onward to new employers.
    And what about the poor people who get sick but have no job, pay no taxes, and have no catastrophic health insurance? The poor will always be with us – that is why we paid the doctors up front. No citizen will be denied service by those who promise first to do no harm.
    This style of funding should also spur an interest in more people willing to become doctors which are currently predicted to be 90,000 short by 2025.
    Concrete and predictable medical costs have proven to be elusive when payments are made by governments and insurance companies. If someone else is paying – the billing is of little consequence to the patient. In this subsidized system, transparent costs would allow patients to seek the best service at the lowest co-pay. No two hospitals charge alike and most patients only get solid costs after services have been rendered.
    Tort reform is also necessary.

    • Z Woof says:

      Mark, welcome to the NCPA blog where your brand of Socialism sticks out like a sore thumb. I don’t trust these doctors because they are the 1st ones to jump at Socialized Medicine like in NAZI Germany.

      Around here we support Republican Health Care Reform of age-based tax credits for the purchase of Individual Medical (IM) insurance and ENHANCED tax-free HSAs so a single can stash $6,550 and a family $13,100 annually into America’s BEST tax dodge, with a mutual fund option.

      Devon, The Pain in Maine. I’m sure Blue Cross would want the government to pay all claims above $32,500 per year. Blue Cross CEO’s would come up with the brilliant idea of a $32,500 deductible and drop their premiums down to $100 a month per family member.

      But that is not the way it happened. Evolution took a different turn. Soon the Blue Cross CEO’s will have a tear in their beer. They will cry, “It’s like President Trump is paying these people thousands of dollars per year, ALL TAX FREE, to leave our employer-based health insurance, our cash cow. This isn’t fair.”

      The American Cancer Society sells health insurance to their own employees that if they get OVARIAN CANCER and become too sick to work they send them a COBRA notice and switch them off the GROUP insurance to Individual Medical (IM) to pay all of the medical bills, disgusting. Of course then the American Cancer Society, a non-taxed entity, laughs all the way to the bank. These people may harm their BRAND because they depend on BILLIONS of dollars in donations.

      The American Cancer Society is a HUGE supporter of Obamacare, figures. The American Cancer Society needs Obamacare so they can keep TERMINATING the health insurance on their own bald headed sick employees.

      On the other hand, health insurance and life insurance will insure a surviving cancer victim after 5 years with no questions asked. Not the Christian Medi-Share because their PRE-X goes back FOREVER in their fine print. My nephew had cancer last year at 17-years-old. Lee says, if you had cancer and your insure ability window has “POPPED OPEN” and you are a 30-year-old couple you should get the new life insurance that will pay $190,000 CASH with a heart attack, cancer or stroke. The cost is cheap, cheap, cheap at $67 a month. Is that $67 a month each? NO – that is $67 a month for the couple. YOU need cash because if you get cancer in October by Jan, 1st you will owe 2 sky-high deductibles on your health insurance. PLUS, you will need to buy wigs and that’s really expensive.

      Sorry Blue Cross: Here in the real world YOU don’t always win.

      https://www.youtube.com/watch?v=3mKkTm38w3E

      • Allan says:

        “Around here we support Republican Health Care Reform of age-based tax credits”

        Z, are you sure we all support that?

        • Z Woof says:

          Allan, I’m sure if we took a vote Republican Health Care REFORM of President Trump would win hands down.

          Barry would want to filibuster though.

          • Allan says:

            Z, I don’t know how I would have voted because there is a lot at play, but I didn’t feel the Ryan plan that was voted down was a good bill.

            I don’t agree with Barry, but don’t discount everything he says.
            1) His opinions are representative of a large group.
            2) He is quite intelligent.
            3) He does have a good heart.
            4) He has a good deal of specific knowledge from the standpoint of an investor.
            5) My problem with Barry is that he doesn’t deal directly with the data and logic that are against his position. That is why a substantial part of his rhetoric is of a caliber similar to the following, ‘other countries have a degree of socialized medicine so why don’t we?’ That type of logic lacks data and isn’t logical.

            • Z Woof says:

              Allan, my problem with Barry is he has never enrolled one person on health insurance in his life so he has not taken 10,000 calls from consumers on their 18th month of their 18th month COBRA extension crying about their situation.

              Barry doesn’t care when a young woman working as a State employee in Tennessee gets ovarian cancer and becomes too sick to work so she loses not only her health insurance but also her life insurance.

              Barry, here in the REAL WORLD these are real tears that fall. Barry, its sad but true, the one thing I have learned from YOU, when someones a Socialist, there is no cure.

              https://www.youtube.com/watch?v=3mKkTm38w3E

              • Allan says:

                Z, we all have a modicum of expertise in different areas, so I guess Barry could say that your problem is that you don’t understand finance. He could ask you if you had ever analyzed a healthcare’s company’s balance sheet and understood everything that was said. That has a lot to do with the companies you have worked for and pay your salary so don’t expect him to be an accomplished salesman of health insurance.

                Barry weighs things differently than you. We all have various opinions.

        • Bart I says:

          I certainly don’t support tax credits in excess of the insurance cost.

      • Devon Herrick says:

        Ron you can use your real name.
        Everyone is welcome to argue their own ideas.

        • Barry Carol says:

          It’s good to hear you reaffirm that point, Devon. Ron appears to have zero tolerance for anyone who disagrees with him or has a different view of the issues. Blogs like this wouldn’t be worth much if only people prepared to preach to the conservative choir were welcome to comment.

          • Z Woof says:

            Barry, not true. I told mark poyhonen, “Welcome to the NCPA blog.”

            You didn’t even say hello Barry.

            Barry, what do you think of the message from the CEO of Medi-Share, “I want to encourage all of our members with the words of Hebrews
            6:10, that God will not forget “how you have shown your love to Him by caring for other believers.” When we care for one another and stand together as a community, it is a powerful display of our love, not just for one another, but also our love for God.”

            It is really expensive.

            This sounds like a scam to me.

            • Barry Carol says:

              Ron — I never even heard of Medi-Share until I read about it here.

              • Z Woof says:

                Barry, Obama waived the penalty for not having insurance if people get Medi-Share because of religion. They charge $500 a month for families and they say they have over 200,000 people. Put your calculator to that.

                I found them because of bait and switch. They love HSAs and prospect with them then switch you to Medi-Share which is non-qualifying for HSAs. People have always done that so I recognized it a mile away.

                It would blow your mind if I told you who was doing this. What some people will do to make really BIG money.

                • Allan says:

                  I know some people that have Medi-Share and it didn’t sound like bait and switch to me. It sounded logical, thrifty and a way of sharing risk with like minded people.

        • Bart I says:

          “Ron you can use your real name.”

          I think his wife made him stop.

      • Bob Hertz says:

        Ron, I have sold critical illness insurance (though not the term rider that you refer to)

        Anyways, the product guides are very emphatic that the only claims that will be approved are for “first incidence” of cancer, etc.

        You imply that no cancer in the last five years will get you the critical illness coverage.

        I doubt it.

        • Z Woof says:

          Bob, you are wrong. If the client is approved they are covered.

          Your critical illness went up in price after 5 years too didn’t it? Did it last 20 years? 30?

          That’s why it is important to get a good insurance agent who is looking after your best interests.

          • Bob Hertz says:

            In the applications that I had to use, if the client had ever had a dread disease they were rejected for coverage.

            • Z Woof says:

              Lee is the one who trained me and he compares the critical illness to the new life product. Life wins hands down.

              My son with Crohn’s can get coverage and his Rx warnings are: If you take this Rx you will get cancer.

              The critical illness keeps going up but the life is locked in on price.

              Like Lee says, “Product of the future.”

  4. Z Woof says:

    Barry, I can just hear some husband with a wife with CANCER on Medi-Share asking her, “Are you saying you don’t remember having cancer when you were 21-years-old?”

    She says, “My doctor told me not to worry about it.” Then the husband says, “Well Medi-Share is calling today’s cancer pre-existing because they have procedure codes from 13 years ago that only are used with cancer so they are not paying anything with your cancer today.”

    PRE-X that goes back forever will automatically cause all kinds of problems. Like that kidney stone that costs $18,000 and it is PRE-X because you had a kidney stone 14 years ago. I have NEVER seen health insurance that uses PRE-X going back forever like Medi-Share. GOD made them do it.

  5. Z Woof says:

    NEWSFLASH: In the last 20 minutes Trumpcare is everywhere. This just in from ABC News:

    The conservative House Freedom Caucus, which stymied recent efforts to repeal and replace Obamacare, announced Wednesday that it is backing the GOP health care bill with the inclusion of the MacArthur Amendment.

    “Due to improvements to the AHCA and the addition of Rep. Tom MacArthur’s proposed amendment, the House Freedom Caucus has taken an official position in support of the current proposal,” a statement reads.

    This is a developing story. Please check back for updates.

    NOW, the tax-free HSA is bigger, better and bolder!

  6. Bart I says:

    I saw Ryan talking about this reinsurance idea in a press briefing this morning. It was unclear whether this was part of the MacArthur amendment, which he also mentioned.

    With this kind of reinsurance, there is no longer any need for tax credits (other than whatever low-income support is deemed necessary). Which is fortunate because reinsurance also costs money, presumably the same money.

    Will the modified bill drop tax credits?

    • Bob Hertz says:

      Bart, I think that the reinsurance is pegged at $160 billion over ten years.
      That is a pretty modest amount and is not enough to really hold down premiums.

      Tax credits are still needed in some form.
      Just to take two examples I encountered yesterday:

      1. A 60 year old making $50,000 faces a premium of $950 a month. Without tax credits, she can never afford this.

      2. A family of four gets a $15,000 policy for about
      $4,000 out of pocket under the ACA.
      With no tax credits, they will go uninsured.

      Some Republicans have claimed that premiums will go down so fast, that people like this will be fine after repeal. I really doubt it.

      • Barry Carol says:

        High risk pools and reinsurance have always gotten lip service from Republicans as a way to help the unhealthy and already sick while keeping premiums low for the healthy. What they haven’t gotten is the guts to actually vote for sufficient tax dollars to make these concepts work for the people who need them. I don’t think things will be any different this time.

        • Allan says:

          Barry, the problem is that there are too many like you that are reluctant to amortize the costs and charge what the person can actually pay. You don’t want your country club buddy to have to resign from the country club for a few years, so you are willing to transfer those payments to the country club employee that is cleaning the toilets. You also don’t want to see those country club members going on Medicaid, but if the guy cleaning the toilets lost his good insurance with Obamacare you don’t see a problem with that guy going onto Medicaid.

      • Bart I says:

        Bob, what would the underwritten cost be for the 60-year-old?

        I didn’t understand the second example. Did you mean the unsubsidized premium was $15,000, and the family receives an $11,000 subsidy based on income?

        • Z Woof says:

          Bart, you ask, “what would the underwritten cost be for the 60-year-old?” That depends on zip code, insurance company and deductible. In Tampa (34691) where it is more expensive than IOWA a 60-year-old woman can get TIME STM PPO $5,000 deductible then 100% coverage for $268.79 a month or $3,225.48 per year.

          In contrast, in IOWA (50010) a 60-year-old woman can get United Health Care – Golden Rule – the nation’s largest insurer – STM PPO with a Little-Bitty $2,500 deductible then 100% coverage for %514.49 per quarter or $2,057.96 per year.

          President Trump’s age-based tax credit is $4,000 for a 60-year-old no matter what zip code she lives in. In Tampa Trump pays 100% of her insurance then deposits $774.52, TAX FREE, in her HSA for 1st dollar coverage of medical, vision and dental expenses.

          In IOWA Trump pays 100% of her premium then deposits $1,942.04, TAX FREE, in her HSA. BUT, she is going to go with the $5,000 deductible to maximize her HSA deposit. WHY? Because my beautiful DAR daughter is an IOWA born woman and she is good at math, she is a chemist, and she always wants every dollar she can get her hands on. Raising the UHC’s deductible to $5,000 drops the premium to $411.78 quarterly or $1,647.12 per year and increases Trump’s HSA deposit to $2,352.88 per year to this IOWA woman.

          Of course in New York where liberal FOX News has changed the name of GUARANTEED ISSUE to PRE-EXISTING PROTECTION a 60-year-old woman can’t get Individual Medical (IM) for less than $4,000 a year so all NY Women will get ZERO from President Trump in their HSA and have to cough up thousands of extra dollars per year just to pay for the insurance. That’s OK because those NY women are made of money.

          I’m sure Trump’s NY daughter is paying my NY niece $200 an hour to walk her dog. If you are ever in New York City and need to have your dog WATCHED who you gonna call? Z Woof’s niece:

          Pets For Patriots – Director Andrea Arden – Andrea Arden is currently on Animal Planet’s hit shows Dogs101, Cats101, Pets101, America’s Cutest Dog and America’s Cutest Cat. She was the trainer for Underdog to Wonderdog and The Pet Department, FX’s Emmy award winning daily show and appears regularly on The Today Show. Her appearances also include 20/20, Dateline NBC, Queer Eye for the Straight Guy, Live with Regis & Kelly, The View, CBS News, CNN, Fox, PBS, Fox News, and Lifetime, as well as numerous radio shows.

          She is the director of Andrea Arden Dog Training, and was named the best dog trainer in New York by New York, W, Time Out and Quest magazines and the Daily News.

          1 minute 39 seconds

          http://www.nbcnews.com/video/which-dogs-are-best-for-children-apartment-dwellers-empty-nesters-779621955676

        • Bob Hertz says:

          Before the ACA, I believe that a healthy 60 year old would pay about $350 a month for a PPO plan.

          For the family, if their annual income was in the $40K-$50K range, then they could get an $11K subsidy depending on their state. The ACA is fantastic for them.

          • Z Woof says:

            Bob, get real, the ACA is a nightmare that is manufacturing uninsured children from coast to coast. The ACA mandates employers “OFFER” insurance to workers’ families which automatically DISQUALIFIES them for ACA income-based tax credits.

            My high school is charging $742 a month to add ONE child to the School’s insurance. Many can’t afford that so we have uninsured children. When they go to the ACA Exchange they must purchase an over-priced GUARANTEED ISSUE HMO, that pays NOTHING Out-Of-Network, with sky-high deductibles of $7,150 with AFTER-TAX-DOLLARS making it even more expensive.

            The ACA lets multi-millionaires like Dr. John Goodman pay NO TAXES on his lavish employer-based health insurance but a poor child of a school janitor MUST, it’s not fair.

            I blame my Senator Bill Nelsen (D-FL) who cast “THE VOTE”, in the US Senate, CREATING the disaster of OBAMACARE. It was my Senator Nelsen who plunged millions of poor hardworking families, all over the United States, into the dungeons of despair.

            Florida hospitals will charge an uninsured child 10 TIMES more than an insured child. A simple stomach bug could cost $100,000.

            Senator Nelsen only cares about his reelection and he doesn’t care about us, the Little-Bitty people.

            Old-Grand-Dad and a Little-Bitty girl.

            https://www.youtube.com/watch?v=Eo2OIUpWznY

      • Bart I says:

        Thanks Bob, got it.

        – Both examples making ~$50K a year.
        – The 60-year-old paying $11,400 less subsidies if any.
        – The family paying $15K less ~$11K subsidies.

        • Z Woof says:

          Bart, wake up. Bob says, “For the family, if their annual income was in the $40K-$50K range, then they could get an $11K subsidy.” NOT TRUE. All Schools in Florida charge a lot to employees. Pasco charges $14,556 a year to these broke teachers for family coverage and they get ZERO subsidies for all income levels.

          Bart is trying to make Obamacare sound good, pathetic. A 60-year-old couple in Casper, WY earning $65,000 per year pays $2,016 per month or $24,192 a year with NO SUBSIDIES for a $6,000 deductible ($7,150 Out-Of-Pocket). If they are older the premium goes up. A 64-year-old couple pays Blue Cross $26,748 a year with NO SUBSIDIES.

          Bart is Cherry Picking and his propaganda is poor. It’s hard for the DNC to get good help these days.

          I know, lets go to the NCPA blog and say how wonderful Obamacare is.

        • Bart I says:

          I hit “submit” prematurely and the rest of my comment is not being posted. I’ll try in smaller chunks:
          Noting also Ron’s comment that the cost varies widely with region. Which suggests a fixed dollar tax credit will never work well for the entire country, even if age-adjusted.

          With the family, the $11K ACA subsidy is basically a form of low-income assistance, whether or not $50K is actually low income by most standards. But I’m in Silicon Valley, where a 1-bedroom apartment rents for around $30K/year, so I suppose it is.

          For the 60-year-old, going from $350 to $950 is pretty outrageous, considering the ACA plan is supposedly 3:1 age-banded. Moving to 5:1 would raise the premium even more, but reinsurance would have the opposite effect.

          I don’t have a strong opinion regarding income assistance, but I assume there will be some. I’m more of the opinion that the lifeboat needs to float before you can worry about hauling more people on board.

        • Bart I says:

          One thing to consider is that any sort of relief to ACA rates could have a multiplier effect. If coverage becomes marginally attractive to a few healthy people, the rates begin to come down and become more attractive, etc., until it reaches a new equilibrium.

          Of course the subsidies have to actually attract healthy people, and not just make coverage affordable for more sick people.

        • Bart I says:

          With the number of variables involved I can’t imagine anyone predicting exactly how much subsidy is actually needed for every situation. It would be helpful if the method chosen is somewhat self-regulating and self-scaling so that it reduces rather than increases instability.

        • Bart I says:

          But that’s just me being an engineer. Washington seems to have its own logic.

          As does Ron.

          • Z Woof says:

            Bart, are you blind? Knoxville, TN has 16 counties around it with no insurance company in 2018. Oklahoma has 1 insurance company, Blue Cross, who is leaving in 2018. IOWA has all companies leaving but Medica and will they stay?

            Anthem is in 14 States and they were talking about leaving the Obamacare Exchange in 2018. If Anthem leaves that is like 1/3 of America with no Obamacare insurance company. Open your eyes Bart.

            I been to the doctor he says I’m all right
            I know he’s lying, I’m losing my sight
            He should have examined the eyes of my mind
            20/20 vision and walkin’ ’round blind

            Since she’s gone and left me I feel so alone
            I carry a heart that is heavy as stone
            I knew that she cheated, I knew all the time
            20/20 vision and walkin’ ’round blind

            With my eyes wide open I lay in my bed
            If it wasn’t for dying, I wish I was dead
            But this is my punishment, death is too kind
            20/20 vision and walkin’ ’round blind

            https://www.youtube.com/watch?v=ZGvgFW3JIek

  7. Z Woof says:

    HSA Research Findings:

    They asked the men to imagine that they needed a prostate cancer biopsy, and had $2,000 in a health savings account.

    The men said they were prepared to pay $1,598 more for a biopsy that increased from 43 percent to 51 percent the likelihood that doctors would detect a prostate cancer. The figures mirror the difference doctors see between standard and MR-US biopsies.

    If a biopsy could increase from 70% to 90% the chance of ruling out cancer when none is there, the men would pay $2,034. Again, the difference reflects that seen between the two biopsy types.

    In contrast, the men were not prepared to pay extra for a biopsy that would increase the chance of detecting only high-risk cancer.

    “An enhanced understanding of patient preferences, and the monetary value that they place on these preferences, will be imperative to understand as healthcare delivery rapidly moves towards a consumer-driven era,” the researchers said in a press release.

    Since health savings accounts are becoming more common, the findings may be useful when urologists discuss options with their patients.

    “The value placed on MR-US prostate biopsy is particularly useful when urologists are counseling patients with a health savings account and/or patients whose insurance does not cover MR-US prostate biopsy,” researchers wrote.

    https://prostatecancernewstoday.com/2017/04/27/study-shows-men-would-pay-2000-dollars-more-for-better-prostate-cancer-test/#comment-4699

    They should have asked, pretend you have $200,000 in an HSA. Would you spend $10,000 to rule-out-cancer?

  8. Don Levit says:

    Do you have the source that 45 percent of the top 10 oercent of spenders are in the high risk group the following year?
    Thanks for any help you can provide
    Don Levit

  9. Bart I says:

    I guess what it comes down to for me is I’d rather see the money go toward reinsurance than toward a poorly-conceived tax credit scheme. But the devil’s in the details.

    Devon, the KFF link is interesting. They claim their 27% figure is conservative:

    This is a conservative estimate as these surveys do not include sufficient detail on several conditions that would have been declinable before the ACA (such as HIV/AIDS, or hepatitis C). Additionally, millions more have other conditions that could be either declinable by some insurers based on their pre-ACA underwriting guidelines or grounds for higher premiums, exclusions, or limitations under pre-ACA underwriting practices.

    In that recent interview, Pauly explained his 4% estimate in a way that suggests he was considering young adults old enough to purchase insurance for the first time. I’m not certain of this though.

    KFF made another statement that, if true, would explain why pre-existing conditions is such a sticking point:

    In a separate Kaiser Family Foundation poll, most people (53%) report that they or someone in their household has a pre-existing condition.

    That’s exactly double their estimate for individuals, and a voting majority.

    • Z Woof says:

      YES, and 100% have older people in their family too. Bart, I know you come from a long line of dying people.

    • Bart I says:

      You should talk. I’m not the one who’s always writing about my relatives’ health issues.

  10. Pete says:

    How about a further breakdown on the healthiest/unhealthiest that includes drug usage/addiction, riding a skateboard down a handrail or curvy road, and other self-inflicted stupid stuff that costs us so much.

  11. Gary says:

    Republicans seem paralyzed in fear about dismantling the PPACA (also known as “ObamaCare”), concerned that Democrats will beat them over the head with allegations that the Republicans plan to re-impose the Pre-Existing Condition Limitations/Exclusions. But the problem isn’t with Pre-Ex as a concept. Conceptually, it is an important element of the coverage that helps an insurance company manage risk and thus helps keep a company solvent so they can be there to pay benefits under their policies.

    The problem is the rules around Pre-Existing Conditions for individual plans (the ONLY place where it was ever a problem since HIPPA in 1993). I say re-impose the limitations, but change the rules for their implementation.

    Here’s how you phase it out. Set a phase-out over a period of a year. Then:

    • Remind everyone of their duty under the law to purchase health insurance…and set a deadline…that UNDER THE LAW everyone must have purchased health insurance by the end of the next ACA open enrollment period.
    • At this point, assume that EVERYONE to whom Pre-Existing Conditions Limitations/Exclusions is important will have coverage. After all, IT’S THE LAW!
    • Then, after the end of the next ACA Open Enrollment period,
    o Eliminate the ACA in its entirety, EXCEPT for the subsidies for the coming year.
    o In particular eliminate:
     The mandate for purchasing insurance.
     The penalty fee/John-Roberts-tax for not having purchased insurance.
    o Then, instead of the penalty, re-impose the Pre-Existing Condition Limitations/Exclusions as before the ACA EXCEPT that you harmonize the Pre-Ex rules for transfers between individual plans with the transfer rules under HIPPA. HIPPA only applied to ERISA plans. Under HIPPA, Pre-Existing Conditions Limitations/Exclusions did not apply to:
     Transfers from no coverage to an employer plan so long as the addition to the employer plan was timely (usually within 90 days of hire).
     Transfers from individual plans to an employer plan so long as the addition to the employer plan was timely.
     Transfers between the plans of two employers so long as there was a timely addition to the new employer plan.
     Transfers between employer plans when the employer changed plans internally.
     Transfers from an employer plan to an individual plan with proof of creditable coverage showing a break in coverage of less than 63 days.
     Thus, for MOST transfers, Pre-Existing Condition Limitations/Exclusions was NOT EVER AN ISSUE.
     HIPPA rules, however, DID NOT COVER individual plans as they are not ERISA plans. So, to fix the Pre-Ex issue once and for all, make a rule saying:
    • That timely transfers between two individual plans (within 63 days of termination of the former plan, as under HIPPA) are not subject to Pre-Existing Conditions Limitations/Exclusions.
    • Transfers between individual plans that are NOT timely will be subject to Pre-Ex rules limiting coverage for 18 months after the new policy start date for any condition that had been treated by a physician, or for which any prudent person would have sought treatment from a physician, which existed within the 63 days immediately prior to the start date of the new policy, Or excluding it altogether by contract.
     This would do two things
    • Keep someone from being trapped in a plan he doesn’t like because of an existing illness.
    • Increases the competitive nature of the market by allowing transfers between individual plans without fear of incurring a Pre-Existing Condition Limitation/Exclusion on the new policy.
    • Use the next year to means test a subsidy for the purchase of insurance and provide it ONLY for those who cannot afford a catastrophic plan. Also means test a subsidy for assistance with the high deductible.

    We’ve had a moratorium on Pre-Ex for the last seven years. Everyone to whom it matters should have insurance by now…it’s the law. We shouldn’t be rewarding scofflaws.

    And, as for allowing children to stay on their parent’s plans to age 26…why limit it to that? Insurance companies don’t care where the premium comes from. They only limited the age before because of an arbitrary ruling by the IRS that said if you stay on your parent’s plan beyond age 25 that all benefits under the plan would be imputed income to you. You would have to pay income tax on what the insurance company paid for your $70,000 hospitalization!

    Instead, set it so a dependent child can stay on his parent’s insurance plan until the parents go onto Medicare and then allow for guaranteed conversion to an individual plan for the dependent child. Who cares where the premium comes from? Coverage is coverage and premium is premium.

    My $0.02.

    • Bart I says:

      I agree with most of your limitations to guaranteed issue.

      I disagree with the scofflaw characterization, when current ACA rates are currently so wildly inflated by the lack of such restrictions, as well as by outrageous coverage requirements and lack of compensation for the hidden tax implicit in community-rated coverage.

      Incidentally, it’s HIPAA (Health Insurance Portability and Accountability Act of 1996).

    • Allan says:

      “Remind everyone of their duty under the law to purchase health insurance”

      One should step back a bit further. Why should a federal law force a person to buy a product that is being sold by a private company. Should the next step be for the federal government to force everyone to buy broccoli?

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