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I think I know why insurance companies are dumping their junk health plans

ITALIA

ITALIA

Mayor
In the ACA insurance companies have to spend 80% of premiums on health care. If not they have to refund the short payment for the care. The junk plans are very profitable because they have so many things not covered in the fine print. So they collect the premiums and as long as the customer has no problems the customer is happy because he thinks he is well covered and the insurance company is happy because they are making lots of money off of him. If something serious happens chances are it won't cost the insurance company a whole lot because of what is in the fine print. Now they can't get away with that because of the 80% provision.
 
ITALIA said:
In the ACA insurance companies have to spend 80% of premiums on health care. If not they have to refund the short payment for the care. The junk plans are very profitable because they have so many things not covered in the fine print. So they collect the premiums and as long as the customer has no problems the customer is happy because he thinks he is well covered and the insurance company is happy because they are making lots of money off of him. If something serious happens chances are it won't cost the insurance company a whole lot because of what is in the fine print. Now they can't get away with that because of the 80% provision.
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You got it. They'll now frontload the premiums
 
ITALIA said:
In the ACA insurance companies have to spend 80% of premiums on health care. If not they have to refund the short payment for the care. The junk plans are very profitable because they have so many things not covered in the fine print. So they collect the premiums and as long as the customer has no problems the customer is happy because he thinks he is well covered and the insurance company is happy because they are making lots of money off of him. If something serious happens chances are it won't cost the insurance company a whole lot because of what is in the fine print. Now they can't get away with that because of the 80% provision.
Click to expand...

I think it is 85% but regardless of the percentage this is the problem: prices are going up on the premiums because the prices on healthcare will be going up. You got to think this because of that 85% cap. The insurance companies have no reason to exaggerate their premiums because if they don't pay out in claims they have to pay out in reimbursements. Higher priced premiums and higher deductibles in the bronze plans is the death knell of Obamacare. You'll next see price fixing/control in healthcare applied by the government.

The obamacare car wreck can already be seen down the road. It ain't pretty.
 
ITALIA said:
In the ACA insurance companies have to spend 80% of premiums on health care. If not they have to refund the short payment for the care. The junk plans are very profitable because they have so many things not covered in the fine print. So they collect the premiums and as long as the customer has no problems the customer is happy because he thinks he is well covered and the insurance company is happy because they are making lots of money off of him. If something serious happens chances are it won't cost the insurance company a whole lot because of what is in the fine print. Now they can't get away with that because of the 80% provision.
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Succinct and spot on the money my friend. In fact, my direct (and honest) rep at Blue Cross of ID admitted it in pretty much your words last week.

Nice job!
 
resident_evil said:
I think it is 85% but regardless of the percentage this is the problem: prices are going up on the premiums because the prices on healthcare will be going up. You got to think this because of that 85% cap. The insurance companies have no reason to exaggerate their premiums because if they don't pay out in claims they have to pay out in reimbursements. Higher priced premiums and higher deductibles in the bronze plans is the death knell of Obamacare. You'll next see price fixing/control in healthcare applied by the government.

The obamacare car wreck can already be seen down the road. It ain't pretty.
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When was the last time you were right with a prediction? Did you predict a Romney win?
 
ITALIA said:
Not if they are grandfathered. The companies must have made changes that caused the plans to lose the grandfather status. They weren't forced to do that so they must have wanted to lose it.
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They can't offer non-compliant plans through the exchanges, can they?
 
NightSwimmer said:
They can't offer non-compliant plans through the exchanges, can they?
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...no, they cannot but as Italia said there is a provision for grandfathered group and individual policies.

...the thing that has me confused however is why companies are canceling those policies. I cannot find any provision in the PPACA where it says all policies have to be compliant - only the ones offered on the exchange. Do you know why these uber-low cost policies that do not essentially cover anything are being canceled?
 
Figjam said:
...no, they cannot but as Italia said there is a provision for grandfathered group and individual policies.

...the thing that has me confused however is why companies are canceling those policies. I cannot find any provision in the PPACA where it says all policies have to be compliant - only the ones offered on the exchange. Do you know why these uber-low cost policies that do not essentially cover anything are being canceled?
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So there's a 25 year old, healthy individual who has a plan where they pay $150.00 a month, with a $5,000 deductible because they do not use their insurance for anything due to their health. The insurance company realizes that they can make more by altering, and there by nulifying the plan due to the rules in ACA.

Now said 25 year old, who won't use their insurance anyway, has to get insurance (and possibly through the same insurer) due to the law (or pay the fine, sorry tax). Their new plan will offer more, which they will not use, but now instead of paying $150.00 they will pay $225.00. That is a $75.00 a month increase to the insurance company, who will pay out virtually nothing because of the health of this individual. Times that by twelve and do it to a couple hundred thousand people, that's a pretty damn good low risk high return chance to take.
 
afella said:
So there's a 25 year old, healthy individual who has a plan where they pay $150.00 a month, with a $5,000 deductible because they do not use their insurance for anything due to their health. The insurance company realizes that they can make more by altering, and there by nulifying the plan due to the rules in ACA.

Now said 25 year old, who won't use their insurance anyway, has to get insurance (and possibly through the same insurer) due to the law (or pay the fine, sorry tax). Their new plan will offer more, which they will not use, but now instead of paying $150.00 they will pay $225.00. That is a $75.00 a month increase to the insurance company, who will pay out virtually nothing because of the health of this individual. Times that by twelve and do it to a couple hundred thousand people, that's a pretty damn good low risk high return chance to take.
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That is the payback to the insurance providers for eliminating pre-existing condition waivers and lifetime payout limits on their policies without significantly raising the cost of the typical adult plan.

Obviously, young people would rather risk having no insurance than to pay for adequate coverage. Their risk is lower than it is for older folks. On the other hand, should they remain healthy, they'll most likely become older folks themselves eventually.
 
afella said:
So there's a 25 year old, healthy individual who has a plan where they pay $150.00 a month, with a $5,000 deductible because they do not use their insurance for anything due to their health. The insurance company realizes that they can make more by altering, and there by nulifying the plan due to the rules in ACA.

Now said 25 year old, who won't use their insurance anyway, has to get insurance (and possibly through the same insurer) due to the law (or pay the fine, sorry tax). Their new plan will offer more, which they will not use, but now instead of paying $150.00 they will pay $225.00. That is a $75.00 a month increase to the insurance company, who will pay out virtually nothing because of the health of this individual. Times that by twelve and do it to a couple hundred thousand people, that's a pretty damn good low risk high return chance to take.
Click to expand...
You're making a lot of assumptions there. First off with the $150.00 premium and deductible of $5000 with someone you say will never use the plan that is all profit with no risk according to you. I would take that deal any day. Of course if something very expensive did happen to this person the fine print is written to protect the insurance company as much as possible. Who do you think is going to get stuck for the rest? Now with the $225.00 premium and much better protection with the ACA rules the insurance company has to spend 80% on actual health care. So that goes against your assumption that insurance company will be racking in the dough. If all these people aren't using any health care premiums have to come way down don't they? But if this person does have that very expensive situation now the insurance has to cover it.
 
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