Affordable Care Act, I felt the effect

[rwg3]

So the Act is now rolling along and I have personally felt one of the effects, this week. Bit of background, as a self employed individual I have been paying for my family's health insurance for years now. I chose Blue Cross for many reasons and generally have been pretty happy with it although they have raised rates regularly at least once if not twice a year. The rates are now right at about $2k a month for our family of 4.

I received a letter from them last week, which usually includes a notice of rate increase and options to decrease coverage if that is desired. Upon reading it I was happy to see that it contained a notice of a rebate on my premiums for 2011. It seems that, in 2011 BCBSTX spent only 71% of the premium dollars on healthcare expenditure. Part of the Act requires that insurance companies which spend less than 80% of the premiums charged in a given year rebate the difference between 80% and actual expenditures. In my case it amounts to a rebate of approximately one months premium. This my friends is a good thing.

Now before we hear about how government should not be involved in telling healthcare insurers how much they can spend. Let me say that it has been happening for to healthcare providers for years and often after the fact. I won't argue whether or not the government should be in the mix but only state that my opinion is that both providers and insurers should play under the same level of government oversight, whatever that level of intrusion may be.

It will be interesting to see how the insurance companies will cry their case that they cannont posibly run their business on a paltry 29% overhead, which in BC's case in 2011 would be in excess of $435mm.

[steveincowtown]

It will be interesting to see how the insurance companies will cry their case that they cannont posibly run their business on a paltry 29% overhead, which in BC's case in 2011 would be in excess of $435mm.

Hopefully you can take this the right way, but as a self employed individual, would you like the government melding in your business? What if they show up tomorrow and let you know that you need to refund your customers because you are making to much money?

[RoyGBiv]

Please try not to be too wowed at your $435M number until you also factor in the number of people they insure, the number of states they operate in, the regulations they deal with , etc...

Just because $435M is a lot of money TO YOU, doesn't mean it's usury.
Are you an expert in the healthcare business? How much overhead SHOULD a national operation like BCBS be allowed?

I assume you pay BCBS the rates you pay them because they provide the best (in your opinion) combination of services, coverages, pricing, etc.?? Why should the government limit the ability of a private company to make as much profit as they can make in a competitive market? Oh, right.... because the health insurance market is not a "competitive market"... The government regulates it in sooooo many ways I can't begin to count them... Not the least among them is preventing a carrier from selling insurance across state lines. I wonder how much BCBS could save if it could have just one or two licensed locations rather than having to have licensed agents for all 50 states in order to offer insurance in all 50 states?

I'm glad you got some money back... Please realize how hollow it would be to count that as a "victory" or a "favorable result" of Obamacare. The nightmare is just beginning. I promise you that the negatives will far outweigh your small rebate.

[Charles L. Cotton]

I got the same letter and "refund." Just wait for the premium increase and see how long it takes for the insurance companies to recover the "refund." They will also start paying for more procedures and testing than in prior years, much of it totally unnecessary and prescribed solely so the doctor, labs, and testing facilities owned by hospitals/doctors can make a profit. This will increase the amount of money that will come under the 30% margin, thus increasing earnings and profits.

For about 15 years, medical malpractice defense made up about 80% of my docket. I'm far too familiar with how the system works.

Chas.

[AlphaWhiskey]

Keep in mind that you didn't build your businesses, somebody else did that for you.

[sjfcontrol]

Anybody know if the BCBS refund applies to those in the Texas Health Pool? (Administrated by BCBSTX)
I got a notice that my Premiums were DECREASING by 6% (first time THATS happened!), but nothing about a refund.

[rwg3]

Just a couple of quick responses, not in any violent disagreement with anyone so far.


Hopefully you can take this the right way, but as a self employed individual, would you like the government melding in your business? What if they show up tomorrow and let you know that you need to refund your customers because you are making to much money?[/quote]

I have been a healthcare administrator and developer for over 30 years now. They show up almost daily to tell us what to do or not to do and how they will pay me for it, after I fill out a cost report to tell them how much it cost me to provide the service. Now if I were in another business then I see your point, but the Act and this issue is about healthcare ( at this point in time anyways ).


Just because $435M is a lot of money TO YOU, doesn't mean it's usury.
Are you an expert in the healthcare business? How much overhead SHOULD a national operation like BCBS be allowed?

Well I wont claim to be an expert, but I have a few bruises from the battle. By the way that $435M is for the State of Texas only.

I got the same letter and "refund." Just wait for the premium increase and see how long it takes for the insurance companies to recover the "refund." They will also start paying for more procedures and testing than in prior years, much of it totally unnecessary and prescribed solely so the doctor, labs, and testing facilities owned by hospitals/doctors can make a profit. This will increase the amount of money that will come under the 30% margin, thus increasing earnings and profits.

For about 15 years, medical malpractice defense made up about 80% of my docket. I'm far too familiar with how the system works.

Chas.

You sir have hit the nail squarely on the head. BC giveth and taketh and they are far better at the taking. It is going to be an interesting ride for a while.

[Jim Beaux]

Does anyone think it convenient that these rebates are hitting just before the election?

The bill for obamacare will begin to hit in 2013 (the bulk of 21 tax increases shouldered by the middle class) & none of us producers will be sharing happy stories. Remember, you gotta pass it before you can see what's in it!

[2firfun50]

As one who is trying to figure out health care in retirement, I'm waiting on better ideas. Haven't heard any yet, especially from Romney. Obamacare is just a "copy and paste" of Romneycare.

Since I strongly believe that "Life and the Pursuit of Happiness" is directly tied to health care. We're #1 in expenditures, but 37th in the world. This is what the supposed free market has gotten us. My late father once told me "Son, without your health, you have nothing." He was so right.

How many on the the forum are drawing some kind of Government benefit? Social security, medicare, medicaid, military retirement, VA benefits, student loans, educational grants, etc.

You don't want the government messing with your health care? What do you think the AMA (medical mafia) and the insurance mafia is doing to you? There is no such thing as free market competiton in medicine.

So lets hear some counter proposals instead of politcal whining!!!

Rant off

[RoyGBiv]

This is what the supposed free market has gotten us.

You are extremely mistaken if you think we have a free market for healthcare....
The EPA regulates the environment less than the government regulates healthcare.

Pieces of the Solution:
Allow health insurance providers to offer plans across state lines
Tort reform
Malpractice reform
Mandatory Transparency of healthcare pricing (I should be able to know CLEARLY and without doubt that procedure XX will cost me $1000 at hospital A and the same procedure will cost me $1500 at hospital B, as part of my decision-making. I don't want anyone to do anything about the discrepancy. Once the pricing is clear, the "free market" will induce parity)
Mandatory electronic records and other tech-solutions (reduce the cost of paperwork)
Local low-cost clinics for the sniffles and such (WalMart and Target are already working on this, but, see tort reform)

Soooo many pieces to fix this puzzle. If you're looking for a sweeping solution, you'll be disappointed.
It will take leadership, not "Governing".

Be careful not to be swayed by media hype ("If the free market did such a great job, why is it so broken?"). The base assumption is completely wrong.... The market is not "free" to manage itself... it is already overly regulated by politically motivated know-nots.

[2firfun50]

This is what the supposed free market has gotten us.

You are extremely mistaken if you think we have a free market for healthcare....
The EPA regulates the environment less than the government regulates healthcare.

Pieces of the Solution:
Allow health insurance providers to offer plans across state lines
Tort reform
Malpractice reform
Mandatory Transparency of healthcare pricing (I should be able to know CLEARLY and without doubt that procedure XX will cost me $1000 at hospital A and the same procedure will cost me $1500 at hospital B, as part of my decision-making. I don't want anyone to do anything about the discrepancy. Once the pricing is clear, the "free market" will induce parity)
Mandatory electronic records and other tech-solutions (reduce the cost of paperwork)
Local low-cost clinics for the sniffles and such (WalMart and Target are already working on this, but, see tort reform)

Soooo many pieces to fix this puzzle. If you're looking for a sweeping solution, you'll be disappointed.
It will take leadership, not "Governing".

Be careful not to be swayed by media hype ("If the free market did such a great job, why is it so broken?"). The base assumption is completely wrong.... The market is not "free" to manage itself... it is already overly regulated by politically motivated know-nots.

Now we're cookin'

[DocV]

I suspect Mrs DocV has felt the effects of Obamacare. Our pharmacy insurance provider no longer allows her prescriptions for two non-generic medications. Neither of these prescriptions have generic substitutes listed and the provider lists them as 'non-preferred' - if I have the correct term.

[Edit]: Grammar. doh!

[TLE2]

If you're loving the rebates, you'll love the cost increases. They come later, in 2014-2016 with the exchanges.

Health insurance companies have had guidelines for years as to what they have to pay out for healthcare as a percentage of premium dollars. With Obamacare, the feds just arbitrarily raised that requirement. So of course there were rebates, and smaller companies leaving the market, etc.

The law states that the three largest companies will determine the required benefits in the exchanges. And that's who we'll end up with: the three largest heath insurers.

[smoothoperator]

Part of the Act requires that insurance companies which spend less than 80% of the premiums charged in a given year rebate the difference between 80% and actual expenditures.

If they spend more than 120% next year are the policy holders required to cough up the difference?

[Jim Beaux]

This is what the supposed free market has gotten us.

You are extremely mistaken if you think we have a free market for healthcare....
The EPA regulates the environment less than the government regulates healthcare.

Pieces of the Solution:
Allow health insurance providers to offer plans across state lines
Tort reform
Malpractice reform
Mandatory Transparency of healthcare pricing (I should be able to know CLEARLY and without doubt that procedure XX will cost me $1000 at hospital A and the same procedure will cost me $1500 at hospital B, as part of my decision-making. I don't want anyone to do anything about the discrepancy. Once the pricing is clear, the "free market" will induce parity)
Mandatory electronic records and other tech-solutions (reduce the cost of paperwork)
Local low-cost clinics for the sniffles and such (WalMart and Target are already working on this, but, see tort reform)

Soooo many pieces to fix this puzzle. If you're looking for a sweeping solution, you'll be disappointed.
It will take leadership, not "Governing".

Be careful not to be swayed by media hype ("If the free market did such a great job, why is it so broken?"). The base assumption is completely wrong.... The market is not "free" to manage itself... it is already overly regulated by politically motivated know-nots.

Without a doubt you know your stuff. Good post.