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Michael Olenick: Comprehensive Review of ObamaCare Plans Reveals Not Only High Cost for Atrocious Coverage, but Also Apparent Violations of ACA Requirements

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Yves here. From what Lambert and I can tell, Michael Olenick is the first to publish any sort of comprehensive analysis of Obamacare plans. And when you read his piece, you will see why we’re are likely to continue to be subjected to barrages of cherry-picked anecdotes in lieu of analysis.

His three-person family in his Florida zip code has 132 plans available to them. As he describes, the one mechanism that Obamacare stipulated to simplify the shopping task a bit, that of showing what the each plan would pay out under two specific treatment situations, was not disclosed for the overwhelming majority of plans on the healthcare.gov site. That meant that Olenick had to find the the information elsewhere and input it into his comparison.

But the most stunning part is the degree to which the plans fall short of their stipulated “actuarial” payouts. At least for Olenick’s family, the plans fall well short of the mandated level of reimbursements (for instance, a bronze plan is touted as covering 60% of expected medical costs). It’s unlikely that Olenick’s family would produce results that are out of line with results for states with similar regulations (note that some states have additional requirements that will influence plan structure and pricing).

It is finally important to recognize that the overwhelming majority of reporters and commentators have not been gone the route Olenick has, of obtaining actual detailed plan data for a particular family or individual. Instead, for the most part, they have relied on a dataset provided by the Centers for Medicare and Medicaid Services for every health care plan in the Federal marketplace. It has the appearance of being comprehensive, as Charles Ornstein tells us in his post “Not a good price calculator“(hat tip Lambert):

For every plan, it includes sample rates for a 27-year-old adult, a 50-year-old adult, a family (2 adults age 30, 2 children), a family with a single parent (1 adult age 30, 2 children), a couple (2 adults age 40, no children) and a child of any age.

But then Ornstein tells us that the use of specific ages in those illustrative cases is illusory. The price tool uses only two huge age ranges!

But CBS News reported Wednesday that the tool could be wildly misleading because it quoted prices for only two groups (49 and younger, and 50 or older). The first group was based on a 27-year-old’s cost while the 50 and older was based on a 50-year-old’s. If you’re, say, 48 or 63, your prices could be much higher.

And remember how all sorts of Obamacare-friendly stories have been saying (more or less): the critics are idiots! Look at how low the new premiums are! Well, it turns out the premiums are all that tool shows, and that leaves reporters and consumers very much in the dark as to actual plan costs. Ornstein shows how even a summary with a price based on the actual age and other basic plan features changes the picture (and notice the definition of a bronze plan, highlighted in dark blue on the left; this becomes important in Olenick’s discussion below):

tumblr_inline_mv883uMjmb1qmqbhx

The tool shows ONLY an estimated premium:

tumblr_inline_mv884tA99k1qmqbhx

Here is an actual quote:

tumblr_inline_mv8856Yeed1qmqbhx

So not only is the actual premium for the same plan $562 per year higher, it also has a $2350 deductible. A rather different picture, no?

By Michael Olenick, a regular contributor on Naked Capitalism. You can follow him on Twitter at @michael_olenick

After five weeks healthcare.gov presented insurance policies for my family to purchase. No wonder the website was dark for so long: the plans are expensive, atrocious, and the insurance companies look like they are cheating.

Transparency when buying healthcare insurance was seen as a raison d’etre of the insurance exchanges. Healthcare.gov fails miserably. I could neither export nor print the plans or plan information. I could not even view them all on one page: there is no option to change the number displayed on a page, a standard website feature. Intuitively I could see the plans looked terrible but, without the ability to analyze them as a whole, I didn’t realize how terrible. Finally I decided it was worth the time to throw open the blinds on this fiasco and type it all into a spreadsheet. Political partisans cherry-pick scenarios to support their narrative but, in much the same way that a picture quickly conveys a story, data itself defeats spin doctors.

I don’t like disclosing personal information but it’s impossible to entirely understand these plans without doing so, and it isn’t that difficult to find anyway. We are a three person family. I am in my mid 40’s, my wife is in her mid 30’s, and we have a child. At the worry of putting a hex on I’m thankful that everybody is healthy. Our ZIP code is 33405. Nothing more should be needed to obtain healthcare quotes (one question outside the scope of this piece is why, without a login, it’s impossible to type that information into healthcare.gov to view the plans and costs). You can look at my results below.*

There are 132 plans, a relatively large sample size: 38 are bronze, 46 silver, 33 gold, and 15 platinum. Florida Blue offers 76 plans, Ambetter Health has 27 plans, Cigna has 11 plans, Aetna has six plans, Humana offers five plans, Coventry Health offers four plans, and Molina Health has three plans. Sixty-three plans are HMOs, 17 are PPOs, and 52 are EPOs. The average premium is $916.14; the median is about the same at $923.90. The average deductible is $6,581.82 and the median is $6,000. Thus the average plan requires families that actually plan to use healthcare pay $17,575.54 (total monthly premiums plus deductible) before the plan pays much (or anything, depending on the plan); the median is $16,971.38.

The average out-of-pocket maximum is $10,854.55; the median is $12,500. Finally the maximum paid per year – the price people with conditions like cancer would be expected to pay for their “affordable” care, with premiums, deductibles, and copays (but not balance-billed and other games) – is $21,848.27 per year; the median is $22.415.96.

The plans carry average premiums by metal level of $759.14, $910.86, $1,019.28, and $1,103.20 for bronze, silver, gold and platinum respectively. Average deductibles are $10,571, $7,209, $3,633, and $1,040 and average out-of-pocket maximum amounts are $12,600, $12,026, $10,115, and $4,467. Total out-of-pocket annual costs for people who rely on the plans – the sick people the ACA was meant to help – are $21,710, $22,956, $22,346, and $17,705 (if you’re sick, buy platinum, assuming that you can afford anything).

Moreover, the overwhelming majority of plans violate what is arguably the most important disclosure requirement in Obamacare, one designed specifically to allow consumers to make “apples to apples” comparisons. Data showing how little the plans actually pay under specific real world scenarios, as required by the ACA, seems to be purposefully omitted from healthcare.gov. The law stipulated that insurers calculate and disclose projected out-of-pocket costs for the delivery of a baby and one year’s treatment of well regulated Type II diabetes. These comparisons go the heart of the plans’ transparency. However, this data was missing from healthcare.gov for 98 of the 132 plans, available only by burrowing into the plan brochures.

Even for the 34 plans that disclosed the data on healthcare.gov it was, seemingly by design, a hassle to view, requiring an extra click. All four of the seven largest insurance companies failed entirely to provide this information. This field reads “No data” for every plan from Humana, Aetna, Cigna, and Florida Blue (Blue Cross). It’s hard to believe that this is a technical glitch – the information shows up just fine for the small insurers that uploaded it.

Rather than accept this sleight of hand, I decided to plow into the brochures and collect the data. On Sunday morning my wife washed the dogs while I aggregated undisclosed coverage data. We both managed to wash away a figurative and literal bad stench.

Healthy baby delivery is projected to cost $7,540 in my area. Bronze plans, which are supposed to pay 60% of out-of-pocket healthcare expenses, cover only 27% leaving families to pay $5,516 of $7,540. Silver, gold, and platinum plans are supposed to pay 60%, 80%, and 90% respectively but pay 47%, 64%, and 85%.

Type II diabetes is projected to cost $5,400 per year to treat. Plans pay 47%, 62%, 78%, and 94% on average, for bronze, silver, gold, and platinum, of the cost. Although the bronze plans average better for diabetes seven bronze plans pay less than $100 towards the $5,400 yearly expense.

Using this relatively large real-world sample we see there is only one category – Type II diabetes insured by a platinum plan – that is projected to pay out at the mandatory actuarial level. At 27% bronze plan payouts for routine births are abysmal, especially considering deliveries are one of the primary conditions the subsidized bronze plans should cover. If a family put aside $500 per month they’d leave the hospital with a $1,540 bill. Instead, by buying insurance, they start out with a $5,516 bill. Maternity coverage is not useful if it never pays.

I was encouraged by one of the HMOs, Humana, that looked both affordable and comprehensive until I checked their provider directory. According to the census, my county has 1,356,545 people: 7,540 are children under five years old and 227,666 are under 18 years old. To serve almost a quarter-million youngsters, Humana has nine pediatricians. The American Diabetes Association estimates 8.3% of the population has diabetes, so there would be 112,593 diabetics. To take care of them, the HMO has three endocrinologists, the closest which is 24.7 miles away, each way. There are sixteen different primary care providers, though one is a clinic that has 18 locations. I suspect these clinics are basically HMO staffers who do most of the work. So the only affordable plan is actually Soviet-style rationed medicine, which might be fine but wasn’t what the ACA promised.

Even without tricks like balance billing, a person insured under the ACA could easily run up a healthcare bill of $43,696.54 (two calendar years of the maximum out-of-pocket) if they get seriously sick. Before the ACA they’d end up bankrupt. After the ACA, they’d also end up bankrupt. By any measure this is expensive and lousy insurance, sold under a mandate that requires people to purchase it or pay a fine to the US tax collector. I know many ACA defenders say the fine isn’t a big deal because it’s small though none of them same seem willing to just drop it for the same reason.

Real data reveals that major healthcare insurers started cheating immediately by failing to disclose the projected out-of-pocket expenses for insured events. Predictably, the government seems to be doing nothing. These plans are supposed to carry an overhead margin of 20% maximum but, no doubt, this figure will be massively gamed assuming that they’re even being audited.**

For years, Republicans have been trying to kill the ACA but for all the wrong reasons. For all the rattling – they shut down the government – they never said “these will suck lots of money from the middle class into worthless insurance policies.” Similarly, Democrats have defended this nonsense in a knee-jerk reaction despite that if Republicans had come up with this scheme they’d be rightfully enraged. This is a bipartisan hit job on the American public.

Obama promised to legalize drug imports and re-importation. Not only did he quickly break that promise but pushed the Department of Justice, which could find nothing wrong about the mortgage/foreclosure mess for years, to fine Google half a billion dollars for running ads from international pharmacies. Obama promised no mandate .. nope. These plans will not result in bankruptcies. Nicht. People can keep their own plans. Nyet. The middle class will have affordable coverage. Non. Transparency will reign in the marketplace. I’ve run out of ways to say no.

CMS has ignored my emails though I’d be happy to speak with them, or any similar government official who can explain away these problems because I see no legitimate explanation. The same goes for any insurance company or healthcare provider; throw me a bone and give me a credible narrative why this isn’t a public policy disaster from the my family’s vantage point. It would be helpful if the mainstream media would start to do their job and focus away from the edges and more towards the core problem that these plans are both inadequate and unaffordable.

Americans deserve, and with just little will, can do a lot better than this.

_____

* Yves here: for some peculiar reason, the line numbers from Olenick’s spreadsheet did not export from Google Docs, which was the best vehicle for creating an embedded version of an Excel spreadsheet, but everything else came over correctly.
** By capping profits, the Administration was trying to make cheating pointless, because the insurers would just have to pay it back, but I’m sure they’ll still figure out ways to cheat. It’s not even that hard: buy a hospital or medical device company and sell services at inflated costs. The ACA plans “cost” 80% or more but the funds are still flowing back to affiliates and thus ultimately to the parent company.

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148 comments

  1. DakotabornKansan

    Countless investors have been spooked by the far lower than estimated numbers signing up for Obamacare.

    But Tom Scully, former CMS administrator and a multi-millionaire Republican, says not to worry, “Democrats have a huge incentive to make this work.”

    Don McCanne MD @ PNHP says, “Thomas Scully has been a major player in injecting more capitalism into health care. This article describes his mindset, including the fact that he intends to get his share of the mega-wealth that health care privatization is creating.” Tom Scully points out the obvious:

    “Obamacare is not a government takeover of medicine, but the privatization of health care.”

    “Republicans don’t understand the new health care law, that it’s actually more, not less, capitalistic than anything that came before. No matter what investors thought about Obamacare politically — and surely many there did not think much of it — the law was going to make some people very rich.”

    “As a Republican, he said, he was ambivalent about the Affordable Care Act. He liked the market-driven private-insurance exchanges, but he detested that the law called for hundreds of billions of dollars in future subsidies to help Americans, including certain families earning up to about $95,000, buy insurance. The rapid transfer of so much money from other parts of the economy could have a negative overall effect. “It’s way too much money, way too fast,” Scully said. “But it’s going to be great for you investors.”

    [Republican class warfare is alive and well!]

    http://www.nytimes.com/2013/11/03/magazine/the-president-wants-you-to-get-rich-on-obamacare.html?pagewanted=all&_r=0

    McCanne emphasizes that “We need to understand what Scully is trying to say: The law is going to make some people very rich. Is that what we what from the most expensive and most dysfunctional health care system of all wealthy nations? We have been warned.”
    http://pnhp.org/blog/2013/10/31/tom-scullys-message-on-privatizing-health-care/

    For much less than we are already currently spending, and will spend under the ACA, on health care through the government, we could have a single-payer system no worse than those that exist in almost every other major country.

    1. Banger

      Thanks, this is great information. One comment here–all laws make some group rich at this point in history. Laws are developed by people with a lot at stake who use the sweat of their brow to walk the hall of Congress, bring attractive people to party at night with staffers (I’ve seen it) as well as the power of their purses to throw money and jobs at lawmakers, staffers and their relatives. Most of this is not allowed to be reported on in the mainstream media since they too join in the parties and in accepting cash and benefits from these interest groups.

      1. madmamie

        Sigh…I didn’t need to wait for your spreadsheets, Michael. I did some quick calcs on the CA site before the opening date and came up with the same averages. I was using my son’s data. He has no insurance for his little family (small family business just getting by) and huge medical bills and I WANTED TO BELIEVE in this!
        He didn’t believe it for a minute. He’s been nice enough not to say “I told you so”. Apparently nobody with a working brain ever really believed in it, but a lot of busy people never thought Obama would try to stick them with a new tax. They’re in for a surprise and (maybe) so is the government. I can’t imagine people will just lie down and take this. ????

    2. Jerome Armstrong

      “Democrats have a huge incentive to make this work.”

      Well, that’s actually the scariest part.

    3. Nathanael

      The NY State exchange is just as useless and non-transparent as the federal exchange, for reference.

      NY health insurance regulators are very aggressive. Despite that, there are two major scams being perpetrated by the insurance companies:

      (1) Some family plans don’t have individual deductibles, meaning that they’re actually worse than buying two individual plans. It is documented precisely nowhere which plans have this characteristic — it isn’t in the “statement of coverage and benefits”
      (2) The “cost sharing reductions” on silver level plans appear to have opened a loophole for a massive scam. If your income changes midyear, you are required to report it, and you will be placed in a plan with a different cost sharing reduction level.

      At which point you have to start your deductible all over again and start your “out of pocket limit” all over again.

      This could happen up to 11 times per year (once a month). You could end up paying 12 separate deductibles per year if you buy a silver level plan and have a fluctuating income.

      The insurance companies are out to scam people, and the Obamacare law does nothing to prevent it.

  2. Bkrasting

    Thank’s Michael, that was comprehensive – and scary…

    So far it has been, “When the web site is fixed, everything will be fine”. This is morphing into, “Now that the site is fixed, we are coming to understand how horribly flawed ACA is”.

    1. GusFarmer

      It’s not flawed if you’re an insurer. They love it (despite the pretend panic). Today’s paper’s top story here (Worcester T&G) noted the insurers are looking for ways to enroll subsidized folks directly, without going through the government … something I’m quite sure they intended outright. That would give them subsidy $ without even the fiction of gov’t oversight.
      As usual, the oligarchs have Dems and Reps blaming each other while they laugh to the bank.

      1. Dave

        The dems and reps are the oligarchs, once they leave office and cash out. Hell often times they are cashing out while still in office.

        There are still enough ignorant fools in this country who buy into the rep/dem divide. Pity they do not realize how both sides are selling us out while enriching themselves.

  3. middle seaman

    Michael’s effort and analysis are admirable and to the point. As a bystander, having a decent employer supplied health insurance, all I did is look at an arbitrary sample of plans published by the media.

    As Michael shows: “[T]he average plan requires families that actually plan to use healthcare pay $17,575.54 (total monthly premiums plus deductible) before the plan pays much (or anything, depending on the plan); the median is $16,971.38.” In English, for most people that coverage just does exist.

    The whole Bronze plan sounds like a tax on the insured paid to the insurance companies. The Silver plan is only slightly better. Clearly, ACA, in the plans offered, is more of a propaganda tool than a much needed health insurance.

  4. Banger

    Unless Olenick is just making stuff up this is very damming. Other commentators are discovering some of the same patterns we see in FL. What I’m interested in is the subsidies and income verification schemes. I think this area feels very ambigous and worries me. The people I am concerned about would be eligible for subsidies but would they be enough to allow them to actually go to the doctor when they or their children are sick?

    Subjectively, this scheme has felt bad and smelt bad to me from the beginning and just feels like a scam. At the time few of us believed that the Obama administration was a fraud, i.e., that it had no intention from the beginning to act on the issues it ran on. This all reeks of Nixon’s “plan” to get out of Vietnam which turned out to be to escalate the war–it backfired on him because the war was un-winnable. Nixon went to the very people that had made the Vietnam War a living hell for all concerned to “win” the war and Obama went to the very people that have made our HC system the most corrupt, cruel, and wasteful in the world, i.e., the insurance companies.

    The solution to this problem is very easy–and I know everyone here talks about Medicare for all but that solution is IMPOSSIBLE because of two major problems: 1) Americans don’t know diddly-squat about health-care; and 2) they don’t want to know anything about health-care. Those two problems are cultural not political problems–progressives (to the extent there are any left) need try and stimulate some curiosity about facts. Yes, they have been systematically deceived and the facts have not blared out of the Mighty Wurlitzer but does anyone expect facts or reasonable ideas to come out of the propaganda organs? There is not one mainstream outlet that is prepared to feature fact-based arguments about ANYTHING, except what you might see on Bill Moyers. I now only watch, when I watch news on TV, RT or Al-jazeera not that they are perfect but they offer alternative views that are not, strictly speaking, propaganda.

    The question I have, and it’s been raised here by some people, is should we join the Tea Party in opposing Obamacare? Should we, who have some influence and access to some portion of the media lobby them (politicians are useless–we should only lobby major news organizations)?

    1. scraping_by

      The Tea Party is part of the scam, I believe.

      Their hallmark is theatrical stupidity and malice. The racism, noise, and off-target agenda makes Barry look like a well-intentioned dolt, and not like a double-talking shill. They have, from the beginning, defined the category of ‘opposed to ACA’ as ignorant, ranting, violent.

      They’ve gone on to act as the foot soldiers of the neoliberal attack on the US, but that came later. They were created to define opposition as cranks.

      Guilt by association is powerful medicine to a social species.

      1. Banger

        It certainly seems to be the case–I think it was just convenient to mobilize these folks as a all-in-one counter to any move on the part of the left to develop an agenda. Everything the “left” side of the Democratic Party has done is to spread fear of the barbarians at the gate just as the right has been doing on the other side. Fear, fear, fear is all that the political elites have along with a heavy dose of fantasy.

        1. Thorstein

          Or, as Jay Gould famously put it ca. 1886, “I can hire one half the working class to kill the other half”.

        2. scraping_by

          Yeah, well, the ‘lifestyle liberals’ that the MSM uses to define the Left are pretty darn snooty.

          However, the Tea Party noise was created entirely by lobbyists. And is financed entirely by elites.

          http://www.sourcewatch.org/index.php?title=Tea_Party

          So, the same elite money corporates who benefit from writing the ACA benefit from painting opposition to ACA as loopies from la la land. Everybody gets lumped in as Scary Clowns.

          Even those of us who just read spreadsheets and carefully read news releases.

    2. Will K

      Just remember Florida implemented legislation that threw a monkey wrench in competative bidding… not surprise to see so many florida plans list.. this was the GOP run FL gov’t's intention…

  5. Bridget

    ” It would be helpful if the mainstream media would start to do their job and focus away from the edges and more towards the core problem that these plans are both inadequate and unaffordable.”

    Thank you for this fine investigative work. The lower cost plans are horrible, horrible, horrible. Very few people would voluntarily purchase one. Good plans are very expensive and unavailable in rural areas.

    The consequences of Obamacare are so shattering, and so predictable to anyone willing to do the research, that it boggles the mind to think that the truth has not yet outed on a larger scale. The problems with the website have obviously obscured the deeper and more significant problems inherent in the structure of Obamacare itself. And it’s proponents are so emotionally committed that they are going to hang on to their denial as long as they can. So, by the time the realization begins to dawn on the victims of Obamacare that their healthcare options have been wrecked , it’s going to be too late to do anything to put the pieces back together. I truly cannot fathom a way out of this disaster.

    On a related note. My husband got a cancellation yesterday….from his doctor, who is throwing in the towel effective the first of the year. This is a man who has maintained a low tech one man practice for years. He has continued faithfully serving Medicaid and Medicare patients, but Obamacare has proven to be a bridge too far.

    1. jrs

      “And it’s proponents are so emotionally committed that they are going to hang on to their denial as long as they can.”

      Some of them, a few actually benefit but I think this is heavily skewed to those benefitting from expanded Medicaid in the states that did that.

  6. Jim Haygood

    ‘Data itself defeats spin doctors.’

    Much like silver crosses defeat vampires. Olenick’s epic, spreadsheet-enhanced takedown of Obamacare deserves a Pulitzer prize. Your typical MSM stenographer would just gawk at his dancing numbers like an infant gazing at the colorful mobile whirling over its crib.

    ‘Maternity coverage is not useful if it never pays.’

    This offhand comment drills to the heart of the gross misunderstanding that underlies U.S. health ‘insurance,’ which is not insurance at all, but indemnification.

    Employer-provided medical indemnification plans were introduced to provide tax-deductible benefits to attract workers during WW II wage controls. Other than rare, catastrophic health issues, the vast majority of claims made under indemnification plans are not insurable, because they are routine.

    Spreading the cost of routine expenses among large pools not only provides no benefit, but also adds administrative costs. That’s why auto insurance doesn’t cover brake jobs, and homeowners insurance doesn’t cover painting the trim: these are ordinary, uninsurable expenses.

    More than 80% of women conceive a child. Compelling the 20% who don’t conceive to subsidize mothers just doesn’t generate enough dosh to make maternity care insurable, after administrative costs. Collectively, no one can possibly receive any net benefit from buying maternity coverage. Passing laws can’t change that, any more than King Canute could roll back the tides.

    1. EMichael

      Roughly 50% of the insured will have absolutely no chance of needing coverage for prostate cancer.

      Roughly 50% of the insured will have absolutely no chance of needing coverage for a hysterectomy.

      You keep drilling down and you will make an incredibly complicated process impossible.

      1. Jim Haygood

        Not enough info. For instance, men have a 15.33% chance of developing prostate cancer; women have a 2.69% chance of developing uterine cancer.

        True catastrophic insurance can be as simple as defining a deductible, and a copay percentage (which could be zero) for all expenses above that threshold.

        1. jonboinAR

          But then won’t your maternity care fall into what’s covered by insurance? It’s pretty expensive. My wife had a hysterectomy. That’s a semi-routine procedure. Many women end up having one. It cost about $40,000. Our crappy insurance paid for less than half, leaving us with a pretty onerous bill. So, should hysterectomies be covered? They’re semi routine but pretty darned expensive for the average person.

          So either most procedures will be covered, or everyone’s STILL gonna be in serious medical debt.

          1. Yves Smith Post author

            Yes, but I believe your factoid is meaningless. Pretty much all women over 80 have breast cancer. Do you hear of a lot of mastectomies or lumpectomies in old ladies? No. You know why? Those “cancers” are so slow growing that they pose no health risk. The women will die with them, nor from them.

            Your body is growing little cancers all the time, but pretty much all of them recede unless you are unlucky.

    2. anon y'mouse

      as someone who does not plan to conceive, I would not mind paying more on my insurance than I was able to.

      after all, I myself was conceived and birthed at one point.

      it seems ridiculous that you can neither be born nor die in this world without incurring a bill to be paid by someone.

      it’s not like we choose to do either of our own free will. so, limiting the choice about ‘conception’ is a red-herring.

      the alternative–refuse to pay for those whose ‘behavior’ doesn’t match my own self-righteous (? possibly) one and let women and their infants die in the streets while complaining about how much -I- have to pay.

  7. Bravo

    A resounding “yes” to the question of joining the Tea Party in opposing Obamacare. The left of center has been hoodwinked and needs to admit their error in having held good faith for far too long in the prospective cost effective implementation of the ACA. Affordable, not. This is the train wreck predicted by some, with no realistic solution but to junk the whole thing and start over.

    1. Lambert Strether

      The “left of center” — which I take to mean the career “progressives” who brought us Obama — has never operated in good faith on health care reform, no more than the administration. Never. If they had been acting in good faith, they would not have imposed a news blackout on single payer stories, or silenced and banned single payer advocates. Nor would they have run the “public option” bait and switch operation to suck all the oxygen away from single payer.

    2. jrs

      I’m hearing more and more conservatives express that single payer would at least be better than the ACA. Which probably wasn’t intended to be the outcome of the ACA but …

      1. John

        Before we get to single payer, if we ever do, the Republicans are going to drag us through “shop around, save up, and shop across state lines.”

  8. Andrea

    Yves wrote:

    — By capping profits, the Administration was trying to make cheating pointless, because the insurers would just have to pay it back, but I’m sure they’ll still figure out ways to cheat. It’s not even that hard: buy a hospital or medical device company and sell services at inflated costs. –

    Perhaps a minor issue *for the moment* in the boondoggle of the ACA. In Switzerland, the only country that has a vaguely comparable system, it has been a major problem. How does the Gvmt. control a private company? Through public-private partnerships? So what does that look like, what are the rules? Of course transparency of accounts is an absolute requisite (and seems to be the case in Swiz. afaik.)

    What kind of legislation, controls, can actually work? Moving on from this first difficulty, in function of what criteria are the profits to be capped, what can the legit profits be?

    Admin costs and not more, or what?

    How to analyze, decide, or enforce whatever?

    Which ultimately means – who decides the premiums? (In Switz. those who can’t pay are bailed out by the tax payer, is that fair?)

    Who is responsible for what when an Insurer goes bankrupt or just goes off into the night? What happens to the insured? How to stop an Insurer having huge reserves and paying extravagant salaries?

    These questions are kinda vital but appear to be (to me) under the radar in the US.

    It takes a long time and many struggles to set up such public-private partnerships and they regularly create endless snarls and problems.

  9. EMichael

    Strangely enough, my employer provided healthcare from a company with more than 200,000 employees requires me and my wife to pay more than $20,000(counting the company’s “share”) before it covers much of anything. Though to be honest, our total out of pocket per year is actually $700 less than the ACA mandates.

    My question would be how many people in Florida will actually pay these amounts? To make a fair comparison you need to include the subsidies. If I use the Kaiser subsidy calculator, Florida median income of $45,000 would receive $3300 a year in insurance subsidy.

    One other thing I believe is ignored. One serious injury or illness blows away not only the deductible, but also the max out of pocket, and probably does so for the entire family.

    To add in the total deductible for the family as their total healthcare costs for the year is a little dishonest. As the vast majority of people will not hit that number unless there is a serious injury or illness.

    Which is why they have insurance.

    1. Michael Olenick

      That’s what the $ spent before $ paid column is for: it’s the middle ground between when insurance will start to actually pay any substantive (or, depending on the policy, anything at all).

      Most of these plans sum up to “families pay about $10K a year so they can pay another $10K if somebody gets sick so that they don’t have to pay much more if you get really sick.”

      But people would be better off paying negotiated rate full price for routine care, banking the rest, then flying to a different country to receive quality care: oftentimes better than we receive in the US. That was last week’s article though.

      Of course all that presumes American families have an extra $20K/year lying around which I suspect may be true for the authors of the ACA and their cronies but not for most others. The median household income in my county is $52,951 and, even with the government kicking in $3,984 year (from the Kaiser calculator), these costs are still going to be an insurmountable burden.

      1. EMichael

        I understand and even agree to some extent. But it comes down to our healthcare is outrageously expensive. And that is not the fault of the ACA.

        Thing is, healthcare emergenices are generally not the kind of thing you can plan on, or have the time to book a flight overseas. And while I agree about not many having $20k lying around, they do have the ability to pay 7 or 8% of their income for healthcare.

        Just like us people with employer provided insurance.

        1. Bridget

          “But it comes down to our healthcare is outrageously expensive. And that is not the fault of the ACA.”

          As long as you forget about the “bending the cost curve down” promise.

        2. human

          You miss the point that they are paying “7 or 8%” for health insurance _plus_ an additional amount out of pocket before the health insurance actually kicks in, subsidies aside, hence the $20k figure. Of course the health _care_ is more expensive in this scenario.

          And as far as your next comment, “So they need to come up with $6350 for a one person health crisis. That ain’t puttin people in bankruptcy.” Your empathy overwhelms me. /s

        3. jrs

          Yea the fly to another country plan breaks down entirely for unexpected medical expense. Then everyone who treats you in the hospital better be “in-network”.

      2. 12thmonkey

        I am surprised that it is that cheap when you consider that, counting the employer’s share, people who get insurance through their employers are really paying about 20k a year. There seems to be little if any difference between the two. I suppose one way to sync the two would be to make the payments you have as tax friendly as the non-taxed employer paid premium is to the employee. I would imagine the howls of outrage that would occur if employer paid premiums were taxed as income (and income they clearly are) clearly would drown out your complaints.

        As pointed out ad nauseum, the problem is not the ACA per se but that our system of insurance is costly beyond all reason; for middling results in care no less. This will only change when employers began en masse dropping health care plans. Until then, people will not care because their employers are paying the greatest burden.

        1. Banger

          The ACA only was meant to make insurance coverage a little easier to live with. There was never any support for actually reforming the system and there still isn’t.

        2. run75441

          12th:

          Healthcare Insurance has its faults; but, it is relative of healthcare costs in the US. Changing the cost model is necessary to lower both costs of healthcare and subsequent healthcare insurance. Insurance was never the only solution.

          1. Brooklin Bridge

            Health insurance was never the solution, it was and is the problem: How can you keep an industry afloat that charges absurdly unaffordable prices for the dubious service of bankrupting those citizens the mortgage banks somehow overlooked? There is no way you can do this where victims are willing to participate of their own free will and indeed the insurance companies were on a perfect trajectory to go out of business -en masse- for that very reason.

            The only solution to keeping such a non functioning financial death trap alive is a mandate f-o-r-c-i-n-g citizens into coercive relationships with the profligate monsters. And your going to be seeing a lot more of that lethal template in other industries that have no social purpose what-so-ever other than to expropriate and lavish onto politicians and elite what little sustenance remains of the commonweal.

            1. run75441

              “Health insurance was never the solution, it was and is the problem: How can you keep an industry afloat that charges absurdly unaffordable prices for the dubious service of bankrupting those citizens the mortgage banks somehow overlooked? There is no way you can do this where victims are willing to participate of their own free will and indeed the insurance companies were on a perfect trajectory to go out of business -en masse- for that very reason.”

              “Insurance was never the only solution” was my reply earlier. Healthcare insurance is reflective of healthcare costs. These are two different topics; but in the end, the cost of healthcare drives the cost of insurance. Healthcare insurance had/has a problem with premiums which is now constrained by the MLR and risk assessment. If it charges to much in mass, it will have to refund with rebates to the insured.

              Perhaps, I am misunderstanding you?

      3. Nathanael

        “But people would be better off paying negotiated rate full price for routine care,”

        The problem is that you can’t get negotiated rate full price without going through one of the damned insurance companies.

        The hospitals and large doctors’ office groups have a fictitious rate sheet, with rates ranging from 2x to 50x the real prices, which they use to price-gouge anyone who hasn’t paid “protection money” to an insurance company.

        This *HAS* to be illegal, but I haven’t seen any of the state medical regulators go after the doctors & hospitals for charging unreasonable and uncustomary prices.

    2. bittersweet

      Ahh, I think the point is that, once a family attempts to pay the deductible, are they getting close to bankruptcy. Most middle income families do not have 20K just sitting around. Some older families have monies in retirement account, but the IRS penalty for using those funds before age 59 comes to around 25%. (And it is due the following April 15th!) Add to this figure, the loss in income for this seriously ill earner, and we are right back to bankruptcy. Then remember that bankruptcy limits you to keeping only 11K of your net worth, and protects your house only if it is worth less then the average house cost for your state, (around 200k).
      So now we have formerly good income families, sick, bankrupt and out on the street. This is NOT an improvement.

      1. EMichael

        It is not needing $20K lying around. They are paying the premiums on a monthly basis. Using Michael’s example, around 8% of their income per month.

        So they need to come up with $6350 for a one person health crisis. That ain’t puttin people in bankruptcy.

        1. Michael Olenick

          Which plans do you think cost less than $20K/year for a serious illness? I can go back, pull their brochure, and we can check out the specifics. I’d like the ACA to work but, at these figures it doesn’t. Take your example: if a family earns $80K they’d get no subsidy but pay about 12-15% of their *pretax* income to their health insurer. But if they get sick they have to pay another 10-20% of their pretax income. If they get sick towards the end of the year and it drags out into another year they pay another 10-20%. Since this is pretax those figures jump substantially (raising the question of why the ACA didn’t at least make healthcare insurance automatically deductible without playing around with HSA’s, which many of these plans inexplicably aren’t qualified for).

          We needed to deal with cost; to get a handle on why American healthcare costs so much more than the rest of the world. That’s about the only subject nobody touched.

          1. Michael Olenick

            Meant that the percentages were calculated pretax, not that the money is pretax. The money is (obviously) post-tax, though if people are willing to play around with HSA’s it can be converted to pretax (because public policy that results in substantial tax savings by encouraging complicated and overt gaming is now a positive thing).

            The ACA should have focused on costs and, instead, focused on payments. We know from the college tuition debacle — where every increase in the amount of student loans available morphs into a corresponding increase in tuition — this feeding the beast more food is the wrong approach.

          2. bluntobj

            Amazing work Mr. Olenick.

            I’ve posted here before that the premium is only the beginning of the asset stripmining. Subsidies don’t pay the deductible.

            To recap, you were able to get the co-insurance payment threshholds from company borchures that were not part of healthcare.gov, correct? I’ll pursue that avenue myself when I look at plans. Thank you for that valuable tip!

            Your point about rolling over the year with a fresh deductible is also telling; Open enrollment periods have always been geared to maximize the possibility of 2x deductibles, and that sure didn’t change with ACA.

            Are there any insurer’s advertizing ACA “Gap” coverage yet? Those might be old style catastrophic plans for low premiums that are only in force from April 1 to September 30, outside the Open Enrollemnt period. You’d be covered for big stuff up until you could enroll in ACA, minimizing your premiums. Or has the ACA forbidden such gaming?

            As a last note, I thought to myself that the Humana Platinum as pretty good…until you popped by bubble with the network. I’m going to postulate that the Soviet style network will become more and more in vogue.

            1. scraping_by

              There was actually a poster on this web site a few weeks back who talked about a ‘product’ that would fit into the gap.

              I think I remember talk of Obamagap coverage being called scare talk, since the additional premium would push it out of more and more people’s budget without counting toward the level of income needed to get a subsidy. So it’s be pure loss, more burden on the citizen.

              Throw you a nice big rock when you’re already sinking.

        2. foppe

          I forget the numbers, but isn’t something like 40% of americans living paycheck to paycheck? there was an article a few years ago about how a substantial minority has less than $2k in savings..

    1. bluntobj

      So, you’d compare pre-ACA, ACA, and a hypothetical proposed single payer?

      Isn’t that how ACA was sold to us, comparing a hypotheical ACA to pre-ACA?

      Sorry, .govcare in any form is going to be more of the same BS that was sold to americans with prevarication, misdirection, and coersion. I’ll pass, as any rational person should do.

        1. bluntobj

          I was noting that you are using a comparison with a hypothetical “healthcareforall” plan that uses certain assumptions.

          You are using such a comparison to advocate for single payer, but the premise being that it will cost less and offer better care.

          That was the same method used in selling the ACA to americans.

          It turns out that the provisions of the ACA, along with the regulations and interpretations resulted in something that costs more, will be less effective, and will ultimately result in a far lower standard of care as it begins to be used.

          So, I was simply noting that you are selling single payer with the same methods that sold ACA.

          Fool me once, shame on you. Fool me twice, shame on me.

          1. Jane Doe

            You are using flawed analysis. You are comparing sales pitches to data and analysis. What was done with ACA was a sales pitch. What’s being done with Medicare for All is based on data we know to be true from historical and comparative analysis (Medicare in the US and single payer abroad)

            1. “Since X did compare and contrast that means compare and contrast by anyone even not-x is bad.”

            If I took your argument seriously, I could never engage in analysis of any kind.

            2. There are several problems with this

            a. What was the analysis based on
            b. Who did the analysis? Are they good faith or bad faith actors?
            c. What does the empirical data say from other countries
            d. What is the process for health care finance negotiation as far as cost inputs (doctors, hospitals, medications?) and which one more accurately reflects what we empirically know?
            e. Do the assumptions of each reflect reality? For example, ACA and pre ACA assumed rational consumers. Are health care consumers rational?

            Ultimately, becoming anti-reason in response to the fact you were manipulated by con men makes little sense. Its like arguing you shouldn’t take antibiotics because the snakeoil sales man was wrong about his health tonic.

            They aren’t the same discussion when one looks at the actual questions and data.

  10. PaulHarveyOswald

    Thanks mucho for the info. I have until Friday to decide if I want to stay with my current plan (well, updated to meet ACA requirements plan, costs extra of course) or “enroll”. I was told last night that the ACA site does not play well with Firefox or Safari. (So in my particular case, it’s my fault the site does not work for me.) Right. I’m out. I’ll stick with what I’ve already got and catch up with y’all next year. It’s basically a wash anyway, for me.

  11. jfleni

    There are three astounding excerpts from the article as posted:

    …But the most stunning part is the degree to which the plans fall short of their stipulated “actuarial” payouts…

    Fast buck insurance is ALWAYS a casino operation favoring the house, otherwise the principals would be hoisting granny purses on the street.

    …and the insurance companies look like they are cheating…

    Nuff said! They couldn’t survive if they didn’t.

    …the overwhelming majority of reporters and commentators have not been gone the route Olenick has, of obtaining actual detailed plan data for a particular family or individual…

    Of course not! Many of these ignorant “pundits” could not get jobs as book-keepers in any back-lot carnival!

    The good part is how Barry and his casino butt-kissers will be finally and permanently discredited, how “slick Hillary” will get nowhere despite any propaganda campaign to the contrary, and how Medicare for all will finally fulfill the campaigns — 75 years in the making — of FDR and Truman for National Health Insurance!

    As a bonus, there might be a President in 2016 who can cause real heartburn (and maybe jail?) among the deserving 1%, and real joy for everybody else!

  12. DoctorDave

    this is interesting and important reporting; thanks.

    imagine we had an ACA = Accountable College Act whereby everyone was forced to buy plans for possible future college expenses the their kids and neighbors and everyone else. Would that make education cheaper in the end? The ACA needs to be simplified.

    1. scraping_by

      And to answer your question, the colleges will just raise tuition to get the saved money plus as much as they can. The savings would become a floor on costs. Just like they do now.

      As much as the market will bear. Higher education’s dedication to a higher mission.

  13. Brooklin Bridge

    This amounts to a huge almost naked wealth transfer mechanism designed to strip the middle and lower middle class for the staggering enrichment of the insurance industry. The one thing it seems extremely well designed for is to avoid as much actual payout in health care benefits as mathematically possible. This isn’t “mandated” health care insurance; it’s mandated theft by insurance companies at the expense of bankruptcy of millions of families over a fairly short period of time.

    What no one is thinking about, at least no one who stands to gain from this in the short run, is the domino effect such a massive strip mining of last-reserve assets is going to have on the economy as a whole, never mind the devastation it will cause on a huge segment of society. On the plus side, I suppose, people may at least be put out on the street before they get deathly sick worrying about being put out on the street.
    This also probably explains why the sign-up software is so crappy. It’s a feature designed so the government can collect penalty fees from as many of the cattle as possible in the first few years. No excuses, you dead beat retards! This will allow the government to build up a reserve for more draconian enforcement and collection procedures in subsequent years when (as we all know they will) they start to put real financial pain in the penalties for not going bankrupt voluntarily.

    Smart money says private debtors prisons are the new hot for investment.

    1. Banger

      One of the more tragic aspects of all this is that many people in industry were concerned about spiraling HC costs and wanted real HC reform that included dealing with costs but the Administration refused to do any of that. I have argued that had progressives understood more quickly that Obama was a fraud they would have nixed the ACA and insisted on the strategy of holding out for a full disclosure of the facts around HC which in another year would have yielded to some kind of consensus on some combination of lowering costs so that they were in line with other countries and an experiment with some single-payer system.

      In the end this will now be a permanent drag on the economy as it staggers into stagnation and decline as various dishonest industries extract rent for us leaving us with less each year. Eventually this will begin to sour more people but we aren’t there yet.

      1. Brooklin Bridge

        Pessimistic as I am, and justified by facts as that POV is, I always like your habit of seeing the good in people, [...] many people in industry were concerned about spiraling HC costs and wanted real HC reform [...]. I think you are right about that.

        But you are also right that we are far away from enough people seeing what is actually going on: which as I see it is that this isn’t an attempt to fix a problem, but rather to exploit one that measures up pretty close to significant war crimes on a country in terms of scope and human suffering.

        1. scraping_by

          I don’t think of anyone making millions (billions) running health insurance corporations are well-meaning but ill-informed. Counting your money can’t take up that much of someone’s time and attention.

          They’re only distant from the consequences of their looting. If they really cared, they’d admit private for-profit health insurance cannot, by any means, equal the cost/benefit ratio of single payer, Medicare For All, government run plans.

          It’s hard to get someone to see something when their salary depends on them not seeing it.

    2. Fluffy

      “This also probably explains why the sign-up software is so crappy. It’s a feature designed so the government can collect penalty fees from as many of the cattle as possible in the first few years.”

      Never ascribe to malice that which can be reasonably attributed to incompetence.

      Truly. You sound like a conspiracy nut for no good reason.

      Cronyism and gross over-charging for mediocre service are both long term characteristics of the government contractor universe from whence this failed website sprang.

      It doesn’t need terrific evil intent on anyone’s part to be worth criticizing.

      1. Brooklin Bridge

        You might consider adjusting your snark-o-meter so that you can tell when people have their tongue in cheek and when you are simply being obtuse. On the other hand, I can certainly sympathize with being ill-humored under the circumstances.

      2. Brooklin Bridge

        On the other, other hand, it would probably be pretty frightening to find out just how close to reality my gallows humor actually is.

        1. aletheia33

          @ bb:
          i am a very literal reader and my snark-o-meter is a pretty sadly dull instrument, which leads to embarrassment at times. FYI i didn’t discern the line where you moved over into black humor. i do often expect others to discern my sarcasm and i get embarrassed that way, too.

          and it’s easy to become paranoid when you are aware of how many defenseless people are in fact being actively robbed by unidentifiable government-protected criminals in present time.

          1. Brooklin Bridge

            I think Different Clue grasps the situation better than any of us in this exchange. Obama and his administration are indeed acting with malice mixed in with their ruthlessly cold and calculated push toward fascism. And they are delighted to hide it under the guise of incompetence. That meme, government incompetence, is always useful for people who want to privatize things. Banger would argue that the impetus comes from the Insurance Industry along with the deep state and I would agree, but that makes Obama no less culpable and no less capable since he has managed to pull off what both Bushes, the Clintons, Regan and Tricky Dick could not.

            Anyway, Different Clue pulls out a thread from that gallows humor that may well explain a lot of what is going on with this ACA sign-up fiasco. And that is an attitude of real malice, real contempt that Obama and company feel for the masses they have so shamelessly sold out. Rahm Emanuel’s expression, those fu*king retards really sums up that attitude beautifully, and this sign-up fiasco, no matter how embarrassing to Obama, is very likely a visible symptom of that same attitude. Did they sit down and specifically plan to make money off of people’s confusion that THEY are responsible for? Not likely, but not as far off the mark as one might imagine and it’s certainly indicative of the kind of people we are dealing with in this nightmare.

            FYI, I don’t like to put road signs such as, /snark, in my comments nor am I embarrassed when there is confusion. That edginess is part of what snark is for. I hold no grudge, I’ve put my own foot in my mouth countless times and as I said above, this issue is pretty charged, but that still doesn’t make it fair game for me or anyone to unload with “conspiracy nut” charges simply because I don’t take the time to read a comment carefully.

  14. Thorstein

    Minor quibble in an otherwise excellent analysis: I’m no apologist for Humana, but if Humana has only 5 of the 132 plans in Olenick’s zipcode, is it fair to expect Humana’s nine pediatricians to serve all of Palm Beach County’s children? At a straight 5/132 ratio, if all children under 5 in Palm Beach County saw a pediatrician regularly, Humana would have one pediatrician for every 286 such children.

    1. Michael Olenick

      I thought about that, but then also realized that there have to be many more people who see the obvious benefits to those plans and sign up. If that happens maybe they’ll hire more pediatricians.

      I’m ambivalent because the managed care approach might work. In the past it’s been both awful and widely rejected by consumers but, if the government won’t step in — which they won’t — then maybe a healthcare provider will grow large enough with plans like this that they have the ability to do something about costs. Normally they’d take any ability to lower costs as profit but maybe (and there admittedly lots of maybe’s) they’d want to recycle the money via low rates for even more growth to gain even more leverage and lower costs further.

  15. Matt

    I think this is still an optimistic view of what is happening.

    A small detail, I believe the actuarial payout is the average payout for the plan for all ages enrolled. There is probably some estimate of what percentage of each age will enroll in the plan. You can compare the individual experiences to the premiums paid, or the actuarial payout.
    I don’t know the percentage of insured who will get more costs reimbursed than the actuarial payout. I could guess less than 5 to 10 percent and probably getting worse with ACA.

    The first order message is that consumer medical expenses will be trending higher while receiving fewer benefits. If the uninsurable with pre existing conditions had been put under single payer, then the insurance companies would not be taking their 15 or 20 percent profit cut. And as someone else already pointed out, the average insurance is going up, so the average consumer is paying the 15 or 20 percent profit, to cover the previously uninsurable or just extremely higher age based premiums.

    All this belies the effect of “free market” capitalism of making medical care a business complete with monopoly and oligopoly schemes, anti-trust exemption, multiple levels of pricing to different customers etc. Over the last 50 years the US is just one massive ENRON death-star approach applied to medicine rather than electricity.

    1. Yves Smith Post author

      No, under the ACA they are permitted to have top premium by age be 3x the lowest. If you look at current premiums paid by single men, the top premium for a 20 year old man is <4x the premium paid by a 60 year old man. I haven’t seen stats for women, but I’ve seen total HC costs for women v. men at 65 and 85, and they are comparable, and the general factoid that women’s insurance costs are 10% to 60% higher than mens, so I assume the higher cost in earlier in life to allow for pregnancies and general gyno costs (as in women who want access to contraceptives other than condoms need to see an MD at least 1x a year, and so have to have annual checkups, while young men can skip that).

      Shorter: so I’d expect young v. old ratio for women to be lower, 3X or maybe even less. The age issue is not sufficient to explain how terrible the pricing is.

      1. John

        How do they expect people over 50 who are being forced out of decent paying jobs into bad paying ones, or no jobs at all, to pay 3x the amount of a young person?

        1. Loris

          John, I’m in that boat myself. I’m in my early 50′s and in the middle of “reinventing” myself. The process hasn’t been very lucrative to date.

          Pre-ACA, I could handle the premiums from my salary and my (relatively) well-stocked piggy bank. After-ACA, I’ll have to go on Medicaid if my personal situation doesn’t dramatically improve.

      2. Nathanael

        “No, under the ACA they are permitted to have top premium by age be 3x the lowest.”

        For reference, that’s nationwide. In NY, under state law, premiums must be the same for all ages.

  16. different clue

    It is too late for “a little will” to have any effect. The only thing which could have an effect now would be massive leaderless passive-aggressive resistance . . . as in many millions of healthy young people refusing to buy tar-baby insurance and just paying the penaltax instead, and saving the otherwise premium/co-pay/deductible money themselves to pay for routing ongoing young-person care. That would involve the risk of a million dollar disease costing you a million dollars instead of the 200-300K it would still cost you under Obamacare. Now . . . how to get millions of young people reading these blogposts?

    Also, I read somewhere that part of the Obamacare law is that medical debts are no longer dischargeable in bankruptcy. They are as permanent as student debts now. Does anyone know about this for sure?

  17. BondsOfSteel

    “Thus the average plan requires families that actually plan to use healthcare pay $17,575.54″

    Actually… it’s

    “Thus the average plan requires families that actually plan to use more than $17,575.54 in healthcare pay $17,575.54″

    That’s a lot in heathcare and not the average family.

    1. bluntobj

      So, basically all those sick people that ACA was supposed to help?

      All those people who are sick beyond minor injuries, sicknesses, or routine visits?

      If you don’t plan to use health insurance, you are still OOP the premium of around $10,993.68? *(average Family Plan, no subsidy, from olenick’s averages)

      So, it’s actually:

      “Thus the average plan requires families that actually plan to use more than $17,575.54 in healthcare pay $17,575.54; if they don’t plan to use more than $17,575,54 in healthcare they must still pay $10,993.68*″

      Not red, nor blue, but a big purple shafting.

      P.S. There are subsidies, but they’re still going to consume 8% to 9.5% of AGI.

      1. BondsOfSteel

        Yes, helps. Doesn’t save them.

        Heathcare isn’t free. Someone has to pay for it via taxes, insurance premiums, or co-pays/deductibles. Personally, I’d choose taxes. Congress chose all three.

        A person who uses that much heathcare is getting more healthcare than they paid for. It’s the healthy people that are not getting their money’s worth.

        While this isn’t perfect… it’s better under ACA than not. A family that uses > 17G/year in health cost probably couldn’t get insurance. (What insurance company would want to insure them?)

        1. Jane Doe

          Straw man.

          Of course we have to pay for health care

          The question is how?

          Is it wasteful and consuming resources of an already declining middle class?

          Are there options that could achieve the same finance, at a cheaper cost?

          If yes, then why are we doing it this way?

          That’s not answered by saying “someone has to pay” based on use since the idea of health care finance is risk pooling. Not usage by individuals per se. Health care finance could not work under such a theory since risk pooling would be impossible.

        2. jane doe

          Follow up

          What’s missing from y our comment, and its a question of understanding what one is negotiating, is the power of negotiating based on risk pooling.

          No individual in a market based on risk pooling can reasonably determine what they will need based on past behavior specific to them

        3. bluntobj

          My apologies, BoS, for failing to communicate my thought clearly.

          This average family is compelled to pay those listed dollar amounts, if they choose to have insurance.

          They are compelled to pay up to 2.5% of their “excess income” amount, or $2,085 from 2015 and beyond, indexed to inflation, if they choose not to have insurance.

          They will be compelled to accept whatever crappy network their insurer foists on them.

          If they have the median income in the US, they won’t be using HSA plans, they have a subsidy on their premiums, but they will pay through the nose if they get sick, leaving them right back in the fire as they were before.

          My objection is to the fucking compulsion. Offering healthcare funded by taxes (like single payer), is “voluntary” compulsion. Adding single payer healthcare does not change the purple shaft, it just drives it deeper.

          My apologies for the analogy, but red plus blue makes purple. That’s what single payer will be, that’s what ACA is, and that’s what pre-ACA was as well.

        4. DolleyMadison

          Thats ridiculous – my son broke his arm and it cost $24,000. Thats a pretty common childhood injury. My other son got bitten by a poisonous snake spent night in observation, cost 14,000 – if they had administered the anti- venom (usually reserved for bites on the torso) it would have cost 10 thousand more.

          1. Yves Smith Post author

            You were raped.

            An arm break is stupid and simple. You set the arm, put it in cast, and give him antibiotics. Unless the bone was crushed and he needed to be aesthetized and had surgery and recovery time, this ought to be $1000 to $1500 + drugs if we had any rational pricing.

            1. Jane Doe

              To have rational pricing requires rational negotiation, which is where our system fails and why ACA will ultimately do nothing to change the health care crisis.

              There isn’t any negotiation over pricing by health care providers, and in fact, the basic inputs- labor, services, middlemen, equipment, drugs, etc were all given a pass under the bill.

              ACA is the fantasy that one can negotiate in a market such as this on one’s own. Its a common fantasy of liberalism- namely that the only problem in any given market is full dislcosure. That if you have up to date, accurate and full information about a problem, you will be able to negotiate rationally.

              Transparency is only part of what we need. We would still spiralling cost even with full transparency. What’s lacking is bargaining power.

              1. Nathanael

                Whenever a criminal doctor’s office tries to make me sign one of those “I agree to pay” forms, I’ve started writing UNDER DURESS in big letters on it — or I cross out part of it and write “I agree to pay reasonable and customary prices only”.

                They never read your alterations before they take it back, so I advise that everyone else do the same thine.

            2. marie

              Please don’t use “raped” in this way. It denigrates rape survivors. “Robbed” or a synonym of “robbed” would get the same point across.

              1. Yves Smith Post author

                Sorry, I don’t take well to language policing when I am using language in a manner consistent with accepted usage.

                The dictionary does not restrict the use of the word “rape” to sexual assault:

                rape 1 (rp)
                n.
                1. The crime of forcing another person to submit to sex acts, especially sexual intercourse.
                2. The act of seizing and carrying off by force; abduction.
                3. Abusive or improper treatment; violation: a rape of justice.
                tr.v. raped, rap·ing, rapes
                1. To force (another person) to submit to sex acts, especially sexual intercourse; commit rape on.
                2. To seize and carry off by force.
                3. To plunder or pillage.

                http://www.thefreedictionary.com/rape

          2. Texas Sandman

            I might as well risk the wrath of the progressives here.

            First, health is not an insurable risk. Using the accepted methodology of actuarial science, health is too susceptible to unknowns, the bane of the actuary or underwriting department at any insurance company.

            ACA is about what anyone with two brain cells to rub together figured it would be; less coverage for higher prices. You cannot expand coverage and risk without SOMEONE having to pay the bill. Doctor and hospital choices are now based on a county by county basis, and access to specialists is dialed back for the simple reason that the GOOD ones are high priced, and insurers are trying to fit $5 bills where $50 bills are needed….again, in order to provide the expanded coverages to a riskier pool.

            Have you ever wondered why costs are so high for health care in this country…I mean really think about it. Not knee jerk “it’s insurance company greed” thinking, but thinking the whole industrial medical complex from top to bottom. For instance, why is a heart transplant $3-500, 000 or more when the heart is donated, the blood is donated and about the only material cost is $1.50 in suture string? Or why a Doctor from India, who worked here for years, has gone back to India and has a heart procedure that costs $103, 000 at the prestigious Cleveland Clinic down to less than $1, 500, and expects to have it under $1, 000 in a year?

            The medical industrial complex, including Big Pharma, have monopoly protections under both the Sherman and Clayton Acts. They are able to price arbitrage and cost shift in ways that get the rest of us put in the dock. No matter what kind of “reform” you try, unless those monopoly protections are struck down you’re fighting not a losing battle, but one already lost.

            So, you close those protections, you get government out of healthcare totally, no Medicaid or Medicare, and you make the medical arts have to price their products and services so the average person can afford them. If there is no third party to rape and pillage, you get to really choose what you want to pay for. A well baby delivery, complete with 3 day hospital stay, should cost no moe than $1, 000, all inclusive. If you’re not paying out $500-1, 000/mo. for insurance coverage you can easily afford 99% of the healthcare you need. If you think that wouldn’t work, look at plastic surgury. When insurance companies stopped paying for “vanity” plastic surgury, you had a virtual price war go on between surgeons trying to gin up business. When you take away the third party teat from which they succle, they have the decision of either lowering prices or not having work.

            Single payer, ACA, doesn’t matter, the math doesn’t work. Even now, doctors are starting concierge practices where they take cash only. I’ve been to one, and there was a restaurant-style price board on the wall stating all of his prices, all easily affordable to most people, again, if they’re not paying out huge premium payments.

            We can either keep trying to maintain a failed system or really change healthcare in this nation.

          3. tongorad

            I was bitten by a non-poisonous snake in Thailand. A night in a fancy-pants hospital that caters for the rich was around $800.
            I reckon that if I would’ve went to one of the adequate government hospitals or clinics the bill would have been much less.

          4. BondsOfSteel

            Obamacare only changes the way we pay… on a macro level, it doesn’t change what we pay :(

            $24,000 for a arm break is obscene. What would be interesting is a break down to see where that $24,000 when.

            I’m guessing a good part of it when to services that were priced high because they were used by many uninsured users that simply don’t pay. Emergency rooms are a good example…. they must treat everyone regardless of their ability to pay. Hence, their cost are significantly higher for those that can pay.

            Over time, ACA should help this by increasing the pool of insured. However, with the crazy high deductibles (and no medicaid expandion in some states) there still will be a lot of people that can’t pay.

  18. Ron

    My 37 year old son used the site to get a good discount on blue cross. He is unemployed and works on various web projects both for himself and others but he really appreciated the savings he was offered and quickly took it.

  19. BondsOfSteel

    To be fair the bronze plans, you have to include the tax benefits of the HSAs.

    Anyone selecting a bronze plan should also be contributing to an HSA… which would reduce the deductible/max out of pocket of the co-pays by their tax rate. (Yes, there is $3,300/$6,550 per year, but any unused portion is saved and can be invested ala an IRA.)

    At age 65, you can take out any excess contributions (or growth) for any reason, just like an IRA. IMHO, HSAs are better than IRAs since it’s not phased out by income level like IRAs.

    1. bluntobj

      Soooo, more OOP?

      And then invest in an IRA, or a soon to be 101k?

      Not to be a negative nancy here, but you are crediting the avarage Blue or Red stater with more financial savvy than they have.

      I can now modify your previous statement again:

      “Thus the average plan requires families that actually plan to use more than $17,575.54 in healthcare pay $17,575.54*; if they don’t plan to use more than $17,575,54 in healthcare they must still pay $10,993.68*, plus they can contribute an additional $6,550 to an HSA, (which is worth a tax deduction of $1,637.50 at 25%, but they are not getting a subsidy at that income level) raising their total OOP to $15,906.18, or about 21.5% of income at the lowest threshhold of $73,800.″

      *Naturally, if they plan to use more than $17,575,54 they will consume the entire HSA contribution, so they will have a tax deduction of $1,637.50, plus they will also probably be better off in itemizing for the medical expense deduction.

      Which gets back to my point:

      ACA should actually be renamed to the “Accountants Employment Act of 2010″, or AEA for short.

      1. BondsOfSteel

        I wish I could “like” your comment :)

        So, they still should be able to itemize for cost over the ones they paid via the HSA. Plus, contributions to the HSA will reduce MAGI making them more likely to qualify for subsidies.

        Yes… Accountants Employment Act of 2010.

    2. unhappyOrange

      “Anyone selecting a bronze plan should also be contributing to an HSA”

      That would be nice. In my zip code there are no HSA-compatible plans offered, at any metal level. There are also no platinum plans, n-o-n-e (and this is a fairly wealthy county, except for my house).

    3. Dromaius

      What if they can’t afford to pay into an HSA? You can’t withdraw the money for other than health expenses until you hit 65….not 59.5 like IRA. Also, bless Obamacare, they took away the ability to use the HSA for over the counter meds. So kind.

    4. Nathanael

      There are no self-directed HSAs in most places. I looked! Result: putting money into an HSA is handing it to criminal financial “advisors” for them to steal… or at *best* putting it into a non-interest-bearing bank account.

  20. dave

    OMG, what a complicated snakes’ nest to have to deal with. Health care is not perfect in Canada, but our government-run system costs less per capita and we live longer than U.S. citizens. When will US taxpayers wise up and insist on the system every other advanced democracy has? I get to choose my doctor and simply show my health card. Out of pocket: zero dollars. Yes, taxes are higher here but nobody goes bankrupt from healthcare bills. Are you guys crazy or what!?!?!?! Don’t tell me to mind my own business. I have a grandson in Colorado – a beautiful state. But nationally, on health care, you have your heads up the old wazoo.

    1. Banger

      Because the American people, as a whole do not want to face reality–it’s too painful. BTW whenever I express that on this blog I get called an elitist or that I am blaming the victim. Americans elect year after year politicians at all levels who oppose single-payer.

      1. different clue

        People who have called you that have done so for reasons they clearly explain. Those reasons continue to stand.

  21. DakotabornKansan

    They became FUBAR in the classic way…

    8,000 Washington residents who recently purchased health insurance on Washington State’s health benefit exchange, Washington Healthplanfinder, were told they qualified for a higher tax credit amount than they actually qualified for based on their income and household size. Now they may be getting less of a subsidy because of a major error in the calculation of tax credits that help qualified enrollees pay for their insurance premiums. Letters are being sent to these enrollees, who will likely have to repeat the selection process all over again because they may have selected plans that are no longer in their budget once their tax credit is recalculated.

    http://seattletimes.com/html/healthcare/2022125947_acaexchangeerrorxml.html

    “He became FUBAR in the classic way, which is to say that he was the victim of a temporary arrangement that became permanent.” ― Kurt Vonnegut

  22. Richard Thompson

    Yves,

    I usually agree with you and those who write for Naked Capitalism. I have some question about Michael Olenicks perspective however. First let me say that I too was angered by the way in which the ACA was butchered by congress. Rather than Obama ,I think the “bad guy” was Max Baucus.He refused to consider single payer,blocked the public option and let the insurance companies write much of the bill.I very much favor single payer but that was not to be.At least in the immediate future.

    I think it is useful to realize that the aim of the ACA was to provide some type of insurance for low income Americans not to make insurance less expensive for middle income ones. To do this I think they decreased the premiums and increased the deductibles. This is a reasonable approach for insurance companies with their need for profit and high administrative cost. Again,I’m not defending them. I’ve had plenty of experience with these companies as a small business owner and think maybe,just maybe, they were even worse before the ACA.

    We have 42 employees and are located in a rural and relatively poor region of California.
    Over the years I have completely paid the health insurance premiums for 5 employees.I intended to insure all of our employees most of which are healthy single mothers and women in the 20 to 35 age range.Few are high school graduates and even fewer have ever attended college. They are hardworking and reliable people who have often lived through horrendous childhoods.They have broken the cycle and look foreward to sending their kids to college someday(another subjsct).

    I was unable to insure the other 37 employees due to the rapidly rising cost of insurance.
    At present the average cost for the five is $723.00/month for each. I am paying a total of 5 x $723.00 x 12 = $ 43,380.00 a year. Add to that my wife who is 62 and is paying $1439 x 12 = $ 17,260.00 a year. The total payout is $60,640.00 a year.The plans are Anthem Blue Cross PPOs with an average deductable of $2500.00.

    I want to give three examples of what the ACA will cost in terms of premiums for three classes of our employees. My wife currently pays $1439.00 because of a minor preexisting condition. With the platinum plan she would pay $912.00 per month with no deductible. So 1 x $912.00 x 12 = $10.944.00 per year .The five employees I currently insure at $700.00 per month can get the enhanced silver plan from Anthem Blue Cross ($ 1500 medical deductable, $250 drug deductable for a single person,$ 3000 medical,$500 drug deductible for families) at an average cost of $343.00 per month. So 5 x $343.00 x 12 = $20,580.00 per year. The next 22 employees earn an average of $28,000 per year.Some of them have children. Their average premium with the enhanced silver plan is $96.00(deductibles are the same as shown above).So 22 x $96.00 x12 = $25,344.00 per year. The remaining 15 employees are eligible for MediCal because of the MediCaid expansion in California and are no cost to the business.So, at present I am insuring 6 people at a total cost of $60,640.00 while under the ACA I can insure all 42 employees at a total cost of $ 56,868.That’s right.. it costs less!These rates are from CoveredCalifornia and I realize the California is a much bigger state and is fully cooperating with the program while Florida is not. This has more to do with the political orientation of the states. Mr Olenick might consider moving to California rather than France.

    Overall,I think the weakness in his analysis is the calculation of the out of pocket maximum deductible. Most of the people affected by the ACA either in the middle class of otherwise claim to be healthy and would therefore not have to worry about the maximum deductible amount. Let’s say they had routine exams each year.Their cost would be under $300.00. That’s the figure that should be added to the premiums to determine the true out of pocket cost to most healthy people.On the other hand, just yesterday a young friend of mine (30 yrs old) who had argued with me that he was healthy and didn’t need healthcare insurance, received a diagnosis of melanoma and will need both radiation and chemotherapy.These treatments will cost $100,000 plus. I know,I ‘ve had cancer twice…thank you Medicare. This friend who is single would be delighted with a total out of pocket cost of around $7,000.00. Most younger,healthier people who need health care have been in an accident of have a serious condition which can be very costly. And , while I appreciate the depth of Mr. Olenicks analysis,I would like to see him also analyze the specifics of the healthcare plans offered pre ACA.I think he would be surprised. Let’s also talk about the number of people who lost their insurance because of preexisting conditions….I lost mine and my wife fears she could lose hers.This number dwarfs the number losing their insurance because of the ACA. If you are being “dumped” from your previous insurance by your employer because of the ACA ,maybe you should blame your employer for putting you in such a perilous situation. I signed my wife up for insurance on the Covered California web site in 25 minutes on my Ipad. I have just recounted the experience of a “real” small business with more than 2 or 3 employees which is not required to provide healthcare insurance but plans to do so by giving bonuses to those employees who want to participate. These people have to live in a real world far different from that of most middle class folks. I think there is a little bit of a silver lining in the dark cloud surrounding the ACA. We just have to look for it.

    1. Yves Smith Post author

      I don’t know where you get your “healthy” = under $300.

      I’m healthy and when I was under 40, my drill was: Annual checkup with full blood workup and heart tests. Annual gyno visit (in the US, the only way you can get a Pap smear is from a gyno, which is ridiculous, in Oz, a regular GP would do it). She’d insist on STD tests too, raising the cost. Even young people should get an eye exam every couple of years for glaucoma. I know someone under 40 who lost 90% of the vision in one eye due to glaucoma. That combo alone was over $2,000. And you really should see a derm every year if you’ve been in the sun a lot for a mole check (if not, you can do it less often even thought they don’t recommend that). Then if you are exercising regularly, you are like to incur a sports injury now and again (I’d see chiropractors regularly, they are required to be covered in NYS).

      And I also don’t get where you get your assertion re policies cancelled v. preexisting conditions. The officialdom was claiming no more than 5% would lose their current policy, they are now up to admitting it will be more like 6% to 9%. The Administration put the number with “high risk” pre-existing conditions at only 50,000. That’s clearly too stringent a definition.

      http://www.hhs.gov/news/press/2012pres/02/20120223a.html

      The other reports I can find lump people who were charged more for pre-existing conditions with those denied coverage, so I can’t get clean #s.

      1. Richard Thompson

        I got the $300.00 figure by polling ten of our employees.Because of a doctor shortage they use clinics which are less expensive. As far as policies cancelled vs. preexisting condition cancellation, neither can be quantified at this time.I was making the point that health insurance before the ACA had many,many problems.I worked in a hospital for 25 years and witnessed many instances of people having their coverage yanked for things like cancer treatments. I mainly wanted to make the point that as a business we can cover all of our employees for less than we are currently spending for only six employees.This is because of the ACA. Focusing on esoteric factors in health care policies means little to low income people with no insurance at all. I believe that if we make the ACA work it will eventually lead to a single payer system.So far the Republicans are doing a good job of focusing middle class anger on low income people while we should all be more worried about how the 1%ers are planning to rob us next.Vouches for MediCare and privatizing Social Security…maybe?

          1. Nathanael

            ” if ObamaCare leads to single payer, it will be because single payer replace it after the lethal absurdity of ObamaCare becomes evident to enough people.”

            This is extremely likely. Vermont is already queued up to pass single-payer in 2017 if it can get the Federal government to ALLOW it to.

            The obvious failure of Obama/Romneycare will make the state push all the harder.

    2. Michael Olenick

      Richard – I get where you’re coming from but my analysis are *real figures.* You can disagree with the conclusion but not with the specific figures because they’re facts. That list is every policy offered for my middle-class three person family. I suspect that your employee figures are lower because they’re subsidized, or maybe their kids are on a children’s plan so they are only insuring themselves, or both. Somebody is paying those subsidies though.

      While we can debate how much to cost-shift it is profoundly wrong to tell an insured child’s parents they should pay a penalty “tax” — the penalty being that they don’t have an extra $1,600/mo. — to cover a slightly poorer child’s coverage. That’s bad public policy and it’s immoral. There’s also a legitimate question about whether it’s a good idea to force everybody else to subsidize your business by cost shifting employee costs. If there was an on-boarding period to transition women out of poverty that’d be different, but it sounds like it’s a permanent feature.

      Somebody wrote “cry me a river for families making $65,000 who won’t purchase health insurance.” But the insurance is worthless unless they spend about 1/3rd of their, which is confiscatory. That type of callous disregard for middle-class reality will not end well for progressives, though it’s debatable if people who express contempt for the middle-class can be called progressives in the first place.

      1. Richard Thompson

        In response I’d like to make a couple of points.I agree that your figures are “real”.I would like to understand why they are so different from those in California.I think it probably is because California expanded Medicaid thus subsidizing the whole program more and thereby cutting the total premiums the insurance companies needed to collect. If true this is an indictment of the pre ACA insurance situation not the ACA program itself. The higher rates in Florida (and in the other 33 states refusing a federal subsidy) are due to the political orientation of your state. This could be the republican strategy in refusing ACA funds and you may be unwittingly supporting them for the wrong reasons. If the ACA is killed as a result ,we can return to the not quite so widely reported horror stories of treatment denial and insurances caps. We will have to wait until the middle class dissidents age and are really in need of treatment rather than medical tests in order to get health insurance reform. They do have the votes. I never fail to be amazed at how virtually all of my conservative friends who were heretofore opposed to government spending, jump into MediCare as soon as they’re eligible while insisting ;”I paid for this.”

        As to “everybody else (subsidizing) your business by cost shifting employee costs”.Michael , virtually all insurance is subsidized and the cost passed along to the taxpayer. MediCare is almost totally subsidized by the government.Most middle class employees have their insurance subsidized by their employers which results in higher cost to the consumer of their product. Those who work for defense contractors are directly subsidized with taxpayer money. We’ll stay out of the area of the banks and agribusiness. In the more affluent publics mind, subsidies are only objectionable when they go to the poor because maybe “they didn’t earn them.”

        What about “callous regard for middle-class reality.” I have been middle-class most of my life.My parents were and my children are middle-class. Believe me ,I don’t have a callous dsregard for their welfare(although I must confess ,I think my kids make too much money given their age). In summary,I think the “callous disregard” is directed at low income working people. I would have never switched places with them even when I toiled in the middle-class.

      1. Richard Thompson

        I think they may have been working together.Obama is turning out to be a dupe who is easily bamboozled by those wily congressional shills who surround him.But who is to blame is not really germane to my point which is;for this small business the ACA made it possible for me to cover 42 employees for what it had cost me to cover 6 employees.Pining for single payer or the public option in the middle of this debate is not very helpful.Even though a number of “experts” disagree that Obamacare will eventually lead to single payer, if the program is killed right now we will never find out.

  23. DM

    My son, 26, rolls off my employer plan soon. He enrolled for $130 a month with a maximum out of pocket of $2,500. Sounds pretty good to me. It’s about $25 higher than what I found shopping outside the exchange but we’ll see what the subsidy comes to since he’s only working part time. I’d like to see more actual people who clicked “submit” than hearing so much from folks predicting the future.

    1. jane doe

      Predicting what insurance will cover is what insurance is about, and its what ACA expects people to do according to why it was past.

      What I would like to see is less of these odd statements that make no sustantive sense.

      You would like people to click through without knowing what they are buying?

  24. Thomas Meixner

    Not surprised by the costs found here whatsoever. As a University Professor and cancer survivor I always pay attention to the cost of the employer provided insurance I enjoy. For my family of 4 my portion + university portion has been around $19.5K per year. With other co-pays and expenses for my family (no one really sick right now) we regularly break $20K total. Not surprising that similar insurance in individual market would have similar costs after all is said and done as demonstrated here. As Josh Barro has noted a main feature of ACA is that people will learn that insurance is expensive. Hopefully that will lead to cost controls as it has in most of the developed world.

  25. Jull

    Great job done! Thank you, Michael!
    I have already heard from young and healthy people, as they consider themselves, that they will try to avoid being insured as long as it will be possible. Fines are not so scary as the figures above, and there are companies, providing help in cases of emergency. Now I realize their decision is correct.
    What makes my hair curl is that THEY KNOW WHAT THEY ARE DOING, the companies cheating from the very first moment as well as the other parties involved in all this.

  26. Yancey Ward

    Michael,

    Great work breaking this down for everyone. I have found similar things in TN and CT, though I haven’t been nearly as thorough as you are here.

    One note, however- the Humana network may not as bad as your essay makes it seem since there is no chance of Humana having to cover all the children or the diabetics in Palm Beach County. If you really want to analyze the limited physicians available, you will have a much more Herculean task in finding out just how many of the physicians of those type are part of any of the exchange plans.

  27. Yancey Ward

    Also a note about the 60-70-80-90% levels wrote about:

    My understanding is that the percentage costs covered are not necessarily supposed to be, let’s say, 60% of the costs of a birth if you have a bronze plan (the example you used), so it is not necessarily the case that a plan that covers only 27% of that is in violation of the ACA. I willing to accept that I am wrong if someone can point me to the evidence, but I don’t think I am in this case. However, your examples clearly show what a bad deal the insurance is going to be for a lot of people.

    1. Yves Smith Post author

      Please go look at the first image from the Healthcare.gov site. Look at the left column. It clearly states that Bronze covers 60% of costs.

      Now as we indicated, the fine print in the legislation probably give the insurers wriggle room. But I gotta tell you, that statement on the Healthcare.gov site is advertising fraud as written.

      1. Yancey Ward

        I was right- it is actuarial value for the population on the plan, not an individual, which makes sense.

        Someone who runs up huge costs under, let’s say, a bronze plan, will have much more than 60% of his costs covered because of the out of pocket caps, and this has to be made up somewhere, and it can only be made up by ensuring that a lot of people pay more than 60%- the people who don’t max out their out of pocket costs.

    2. Michael Olenick

      Healthcare.gov clarifies the 60-70-80-90 verbiage in a popup, that has to be acknowledge, before it displays plans. Lots of the plans pay 13.79% for pregnancy, $1,040 of $7,540. Maternity coverage was explicitly called out under the ACA because lots of pre-ACA plans excluded maternity, though it was often available for a surcharge. So paying virtually nothing defeats one of the stated purposes of the ACA. By cost averaging the overall figures may work out to 60% — though it’s hard to see how given how much lower bronze is than other levels — but it’s incredibly misleading to individuals. I suspect there are few couples expecting to leave a hospital, after a no-complications health birth, covered by insurance, with a bill for $6,500 of $7,540. It’s almost worse than no insurance because, with no insurance, the couple could have flown to Europe, hung out, and delivered a baby for the same overall cost or less, even with airfare and housing.

      1. Yancey Ward

        I agree, the concept of actuarial value is going to go right over the head of most consumers, and is definitely going slap a good number of people in the face with costs they will assume will be covered but aren’t, but this isn’t some nefarious scam. One could have mandated that a bronze plan cover 60% of all costs, but this would come at the expense of those who have yearly costs way in excess of out-of-pocket caps who would be paying 40% of a very large bill. In other words, there are no easy ways to do this cost sharing part of the plans.

      2. Nathanael

        The “bronze silver gold platinum” ratings are *COMPLETELY USELESS*.

        Why? Because they purport to be about actuarial value… while ignoring premiums. Meaningless number in actuarial terms.

  28. OIFVet

    Stupid question perhaps, but is the out-of-pocket maximum on top of the yearly deductible, or does it include the yearly deductible?

    1. unHappyOrange

      It depends, seems to be the answer.

      From healthcare.gov:

      Out-of-pocket maximum/limit

      The most you pay during a policy period (usually a year) before your health insurance or plan begins to pay 100% of the allowed amount. This limit never includes your premium, balance-billed charges, or health care your health insurance or plan doesn’t cover. Some health insurance or plans don’t count your copayments, deductibles, coinsurance payments, out-of-network payments, or other expenses toward this limit. In Medicaid and CHIP, the limit includes premiums. The maximum out-of-pocket costs for any Marketplace plan for 2014 are $6,350 for an individual plan and $12,700 for a family plan.

      That’s from
      https://www.healthcare.gov/glossary/out-of-pocket-maximum-limit/

    2. Michael Olenick

      Not stupid at all! The out of pocket under ACA plans includes the yearly deductible but under pre-ACA plans sometimes includes but often excludes the deductible. So while $20K is bad that’s all there is, as long as one does’t accidentally end up with an out-of-network provider, though that’s admittedly a challenge when one is anesthetized with no family members present. Only in healthcare is a bill for a service “purchased” while certifiably unconscious, billed by people who knew you were unconscious, enforceable.

      1. OIFVet

        Thank you Michael, I appreciate the info. I am covered by the VA and its truly great not to have to be asked if I have insurance, but I am currently shopping for my mom and it is a bewildering experience. Thanks to people like you, Lambert, and Yves it is beginning to clear up a bit. The things I can say for sure: the plans on the exchange are substantially more expensive pre-subsidy then her current individual plan without subsidy (same insurer, $1K higher annual OOP, same large PPO network), and less than $20/month cheaper post-subsidy. Given her age she is better off continuing to pay more for the large Blue Cross PPO network since it includes Northwestern and University of Chicago with their advanced treatment care. The bottom line is, ACA has done nothing to bend the cost curve down, and indeed it appears to have increased the premium costs substantially, especially for those who want to actually have a real choice of providers and don’t qualify for subsidies. Given that ACA was marketed in part as giving people more health care choices, I would say that is a complete BS. And as for those “cheaper” plans with tiny networks, they are a financial time bomb waiting to go off the instant a specialized care is needed and none can be found in-network. What a scam.

      2. Nathanael

        The critical number when “shopping” for health insurance is

        Out of pocket limit + yearly premium

        As I noted above, there is a VERY dangerous scam brewing involving silver-level plans and “cost sharing reductions” under which you may be forced to restart the accounting towards your out-of-pocket limit from scratch up to 12 times per year, if your income fluctuates. (12 times is unlikely, but 3 times is quite possible.)

        This means silver-level plans must be avoided like the plague. Anyway…

        1. Nathanael

          BTW, I reported the dangerous “gotcha” scam to the NY State insurance regulator, we’ll see if it gets any traction.

  29. anon y'mouse

    my gawd! it’s just like buyin’ a TV….that crashed and burned and blew my whole block up, for which one’s homeowner’s policy found you at fault and now you don’t have a pot to piss in on an empty, windblown lot with tumble weeds and trash blowing through there. it’s like a TV that costs you 5x more to repair annually than you spent originally on the darn thing, but you’re not allowed to take it back or buy another one.

    I should’ve listened to that guy at Best Buy and got the extended warranty. i’ll be paying for this TV for the rest of my goldurned life. no, please…I didn’t need to watch America’s Most Wanted that badly.

    instituting a catastrophic policy uniformly nationwide and then giving some kind of tax credit at the end of the year would’ve been marginally better than this. asking for price transparency at the care-point would’ve been heaven in comparison to this. did -they- actually claim that this was a plot to use the power of the health insurers to drive DOWN the costs of the doctors and hospitals?

    this whole thing is a madmadmadmadworld to a confused peon like me. much less FryCook 40173.

  30. Mac

    I wonder about some of the things I see here. I am diabetic, take 2 drugs and insulin. I see the health care person every 4 months and have an a1c.
    The cost of drugs and the test are all the the diabetes involves for cost.
    I saw some wild numbers in here for diabetic care, what gives.

  31. bh2

    Ten (or so) of the very smartest people on the planet (cuz they think so) get together in a back room of the white house and figure out how to “fix” a highly complex market system they have no experience with (or anything else in real life, evidently) and then command their minions to jam it through both houses without debate or amendment.

    They don’t take the hint when the SCOTUS majority opinion points out that it only rules whether a law is constitutional, whether or not it is wise.

    There is no experienced project manager in charge and top level appointees somehow never manage to read any negative reports which expose Dear Leader’s daring political narrative as nothing more than snake oil.

    What could possibly go wrong?

  32. Bash Obamacare

    Lооking Good President Obama!

    396,261 hаvе bееn found eligible fоr Medicaid аnd 27,000 selected insurance viа HealthCare.gov website.

    Nоw уоu саn SHUT DOWN thе government аgаin whеn уоu trу tо raise thе fiscal ceiling tо PAY fоr аll оf this.

    Thеrе iѕ nоthing bеttеr thаn make thе American People PAY higher taxes аnd interest payments in thе billions оn loans frоm China tо support уоur Signature Health care reform bill.

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