Beginning of the End for Major Health Insurers

[Jackpine Radical]

Beginning of the End for Major Health Insurers

By Wendell Potter, OpenMike

05 October 13



I've often said that the Affordable Care Act is the end of the beginning of reform. Starting October 1, 2014, that law will signify the beginning of the end of the health insurance industry as we know it.

As I've noted previously, my former CEO at Cigna said at a leadership retreat that what kept him up at night was the fear that big health insurance corporations might someday be viewed as unnecessary middlemen, that their "value proposition" would come under scrutiny and found to be wanting. That insurance companies would, to use his term, be disintermediated.

That day has arrived.

Most of the attention this week will be focused on the glitches that will inevitably occur when the switch is flipped and the long-awaited health insurance marketplaces (also called exchanges) finally go live.

Yes, there will be technological snafus, just as there will be some people upset to find that the relatively cheap policies they have now will be unavailable next year because they don't meet the Affordable Care Act's standards. As of January 1, 2014, the law outlaws policies pretty much guaranteeing that people will be underinsured if they get sick or injured - underinsured because those policies have inadequate benefits and outrageously high deductibles.

http://readersupportednews.org/opinion2/272-39/19727-beginning-of-the-end-for-major-health-insurers

[Scuba]

1. Please, please, please let this be true.

Thanks JackPine.

[notadmblnd]

2. I agree, I think insurers are worried about people leaving their plans in droves for better deals

on the exchange.

[Puzzledtraveller]

112. They still get paid.

There is no government provider beside Medicare, even Medicaid is manage by private companies in most states.

[The Magistrate]

3. I Certainly Hope So, Sir

Health insurance companies add nothing; they just rake off the top of the betting pool.

Insurance is simply a bet by the purchaser something will happen, and a bet by the seller it will not. The seller, like any bookie, tries to set the odds so that what he has to pay out in total losses is less than what he gets to keep on total wins. When the bookie is selling payments to doctors, he no more adds a value of health care than a bookie selling payments if the Packers win provides points on the board.

A company manufacturing medical equipment, such as pace-makers or artificial joints, say, or a laboratory providing diagnostic tests, provides something of value, something which can actually further health of a patient, so profit to them is not a dead loss to the system. It may be exorbitant in some instances, but that is a different matter: profit to such bodies is a proper enticement towards adding real value.

But insurers simply stand between a mass of patients and potential patients, and persons who actually provide health care, and short-stop as much as they can manage into their own pockets of the total outlay made by the former for the services of the latter. In the course of this, they very frequently engage in sharp practice, and welsh on their obligations to pay, denying services or even cancelling policies when they have lost their bet with a policy-holder.

[Jackpine Radical]

9. I will add that they cost the healthcare system even more than is apparent

from the obvious numbers. Every provider has to hire people to fight the insurance companies in order to get their payments. I'm very familiar with the situation in small outpatient mental health clinics, where we had to have a full-time person to request authorizations for treatment, file claims & fight the insurance companies' denials (often after having authorized a treatment). Our billing people would often spend upwards of an hour on hold while the people on the other end went to lunch or something. They were always making "mistakes" in payments, always in their favor, hoping we would eventually give up in pursuing the remainder of what we were due. The therapists themselves would often spend long periods on the phone arguing for the medical necessity of a given procedure for a patient, while the medically unqualified person on the other end just wouldn't "get it." The whole business was so frustrating and maddening that I gave up on health care several years ago and developed a strictly forensic practice, in which the courts value my expertise & pay for it without hassle.

[Yo_Mama]

11. This is true - but ACA only reinforced this rather than changing it

Your distinction between providers/makers of health equipment and insurers is crucial. Every penny we spend on insurance overhead is really a penny that could have been put to other uses entirely or a penny that could have been spent on actually providing healthcare.

But ACA mandates a lot of additional insurance co customers, and the major insurers are the ones offering the plans on the exchange. Their role and their profits are going to be strengthened, not diminished.

And if you don't believe me, go look at what the stock prices for big insurers like Aetna and Cigna etc have done in the last year!
http://finance.yahoo.com/echarts?s=AET+Interactive#symbol=aet;range=ytd;compare=;indicator=volume;charttype=area;crosshair=on;ohlcvalues=0;logscale=off;source=undefined;

http://finance.yahoo.com/echarts?s=CI+Interactive#symbol=ci;range=ytd;compare=;indicator=volume;charttype=area;crosshair=on;ohlcvalues=0;logscale=off;source=undefined;

http://finance.yahoo.com/echarts?s=UNH+Interactive#symbol=unh;range=ytd;compare=;indicator=volume;charttype=area;crosshair=on;ohlcvalues=0;logscale=off;source=undefined;

Financial analysts are literally creaming their pants at the prospect of ACA adding value to major insurer stocks.

[The Magistrate]

15. Current Masturbatory Practices Of Financial Analysts Do Not Impress Me, Sir

This flawed law ( and it is in my view massively flawed; I am a 'MediCare for all!' man myself ) does give promise of putting the industry in way of extinction, extinction in its present form at least.

It requires companies to pay out at minimum a portion of their 'handle' in benefits. It is too low a portion, mind, but what matters is that the regulation has been put into place at the Federal level. The mechanism by which it is enforced, checks from the company to policy-holders, will ensure it is a popular regulation; people like checks coming in the mail. It will be both popular and feasible to press for, and secure, change in this regulation which wrings more and more out of the companies, reducing the over-head and profit they are permitted in the health insurance trade.

One of the models in Europe is that people buy health insurance, but the division of the insurance company dealing with health insurance cannot make a profit; the benefit to the company comes from providing such good coverage and service in health insurabce that people are moved to buy their other insurance, homeowners, renters, life, auto, etc., from the company. This is pretty far from health insurance as practiced today in the United States, and would definitely be reachable with the tool-kit of regulations and precedents established by the Affordable Care Act.

[bvar22]

32. If "the Current Masturbatory Practices Of Financial Analysts Do Not Impress" you,

then how about the people who put their money on the line?

Here is what the Smart Money believes about the future of the Health Insurance Industry:


I have immense respect for Wendell Potter,
but I just don't see HOW mandating customers,
and guaranteeing a Cost Plus profit of 15 % is going to have anyone running away from the Health Insurance Industry.
Combine that with the rampant addiction to Corporate Money on both sides of the aisle in Washington,
and I believe we will be stuck with The Mandate and subsidizing these parasitic ghouls (Health Insurance Industry) from our Public Treasury for a long, LONG time.

[sendero]

89. The entire stock market is up sharply for that period..

... and that has everything to do with QE and little to do with the economy and the fundamentals.

The stock market is no longer a reflection of the economy at large, it is a place to put excess banker stimulus money. When QE stops look out below. In fact, when the Fed even SPOKE of a TINY DECREASE in QE, the markets tanked.

Of course, one could make the argument that the Fed will never stop QE that it indeed CANNOT EVER stop QE and one would be hard pressed to refute it. But don't mistake the stock market as being any kind of indicator of the state of the economy.

[dotymed]

50. The "claim" was that

was the only way that republicans would vote for the ACA.
IF this is true, then it is twice as ironic.
Major "concessions" (?) were made (to ensure that insurers were "protected" actually guaranteed to get many more patients)
to get republicans "on board" with the ACA.
Now republicans shut down the govt. to prevent the ACA implementation....

IMO, the concessions (from single payer) were given to appease the corporatist' politicians (of both parties) on behalf of TPTB.
We are governed by the wealthy for the wealthy.....

Health care should be an amendment to the bill of rights.

Dr.'s in 1st world countries are paid handsomely (not enough to be "The Elite&quot and perform a service that they love (their calling, based on their humanity not their quest for riches). How can that not be "how it should be?"

Insurers are gamblers (they own the house and have the odds greatly in their favor) who are unnecessary leeches whose only motivation is profit for no services rendered.

[Enthusiast]

93. I like your thinking..........nt

[reACTIONary]

40. I have to disagree...

... health insurance adds substantial value by socializing risk. If the choice is between assuming the full risk individually or sharing that risk over some large number of individuals, sharing the risk makes economic sense. Providing a service that makes this possible is absolutely value added.

When we use the government to expand the risk pool to include everyone we are simply applying the same value-added principle on a larger scale. The larger risk pool may be more efficient and require less overhead, but it is the same economic principle underlying market-oriented insurance. It is "profitable" for the same basic reason.

[The Magistrate]

75. You May Disagree, Sir, But You Are Wrong

My objection, and description, applies to private, for-profit insurance. This simply extracts value from the pool, diverting a portion of spending by patients from doctors to executives and shareholders. It provides no value whatever in exchange for what it extracts.

[Enthusiast]

95. I agree 100%.

Insurance adds no value whatsoever. They are an unnecessary middleman that removes a share of "free money" while adding nothing of value.

[reACTIONary]

99. You are free (in most cases) to take your chances...

...unless, of course, you must as a matter of law to protect others as in the case of car insurance.

However, to do so would not always be wise, since the service they provide (socialization of a risk) is very worth the cost in many cases. If they are unnecessary middlemen, then do without. At your own risk.

[Enthusiast]

102. I was speaking of health insurance.

Health care insurance is an unnecessary middleman. If we had a medicare for all system health insurance would be unnecessary. No risk involved.

[reACTIONary]

116. Because there is a better alternative...

...does not mean the alternative that exists is without any merit or redeeming value at all. The critique that was offered above was a bit too condemnatory and applied equally to any and every form of insurance.

In my mind, what differentiates health care and health insurance from other issues is that health and well being are vital concerns that have significant ethical implications, and that, by its nature, medicine must be heavily regulated in the public interest. There are other differentiators also, and they seem to trend towards the single payer approach.

But I'm going to keep an open mind about the alternatives.

Thanks for your thoughts on this topic.

[reACTIONary]

98. You may pronounce what judgement you will, Sir, but...

... you would be more convincing if you were to do more than simply assert it. What you have described is simply the mechanism that underlies all forms of insurance, be it what it may: home owner's insurance, car insurance, life insurance, and, of course, health insurance. You have not spoken to the value that those who buy these services seek out and obtain from them, which is the same in all of these case - to wit: the socialization of a risk, so that what may be a heavy individual burden born suddenly and all at once, becomes a much smaller burden shared by many and distributed over time.

Of course, those who provide such a service do deserve some recompense for their efforts... whether they be civil servants or no.

Does fire insurance provide no value? Does car insurance provide no value? Does insurance in general provide no value? If that is your contention, I must heartily disagree and have found no reason from you to suffer a change of mind.

[DireStrike]

83. There may be more "value" overall

But it is extracted as profit.

You can call that "adding value" if you want. I suppose it's technically correct, but it's really not a good definition.

[Yo_Mama]

4. I think this is backwards

I think ACA is a major insurer's dream.

Who do you think offers the plans on the exchanges? The major insurers! And for many, a large part of the cost is subsidized by the government.

[leftstreet]

6. +1

The insurance industry basically wrote the ACA

Why would they screw themselves?

[Yo_Mama]

12. Believe me, they haven't

ACA has already made a lot of insurance co execs a killing this year, as anyone watching their stock prices soaring could tell.

The OP is wishful thinking to the infinity exponent.

[SalviaBlue]

30. Wendell Potter

former Vice President of corporate communications at CIGNA, one of the United States' largest health insurers in the country wrote the article.

[Hoyt]

36. I don't disagree with what Potter is saying now, but he apparently did OK screwing people

as an insurance exec.

[Hoyt]

46. Deleted. Stupidly replied to myself.

[Yo_Mama]

91. I think he's still working for them!

[DryHump]

84. Methinks

health insurance outfits will continue on, but will now be mandated by the ACA to act fairly, charge fair prices

[BrotherIvan]

17. Yes, I'm not sure how this removes them from the equation

My insurance has doubled in the last two years and the exchange only brings it down 20% from there. And they will still play the same games and deny reimbursement they always have. The insurance companies are the major beneficiaries in this one.

[Yo_Mama]

18. That's why I was for single-payer, but I realize the votes were not there

The denial of coverage problem is very bad in some states with some companies.

[BrotherIvan]

19. It is the only solution

And with Citizens United and legal bribery in place, I have no idea how we will get there from here. I never go to the doctor or use my insurance, one, because I'm healthy, and two, because whenever I have, they have totally screwed me and the doctor in some infuriating way. I hate them and my pet insurance too!! (which I have cancelled because it is just not worth it and started a health savings fun instead). Insurance companies will only be stronger and richer with all the new forced customers. How on earth are we going to get rid of them?

[Ron Green]

27. State by State.

mvhca.org

[BrotherIvan]

52. Yes, I am hoping my state will go for it

California has been making some incredible changes. I pray they, along with others such as Vermont, will lead the way into single payer.

[Enthusiast]

103. Yes, the votes were not there.

The votes were not there because the insurance lobby prevented a fair public discussion on the merits of single payer.

With a fair public debate, support for single payer would have overwhelmed the process.

If the public understood the ACA included an unnecessary profit taker that raises health care costs unnecessarily, they would favor single payer instead.

That is why "Democrat" Max Baucus had protesters arrested and removed from the discussion.

The insurance industry, did not want the discussion to include better alternatives.

This is why we had the Tea Party brown shirts disrupting each town hall meeting-to make it appear as if we were lucky to get the ACA with the unnecessary insurance industry in place receiving their billions of free dollars for doing nothing but shuffling paper, you know, like a military contractor in Iraq.

SCAM! Like everything else in the USA now.

[Fla Dem]

42. The article indicates that is not so.....

Major large Ins Co's are not participating in the Marketplaces according to the article. And in checking out insurance for a member of my family in Ct, there were no major insurers available except for BC/BS. The other groups I had never heard of, so am assuming they are some of the new co-opts the article mentions.


This is from the article.......

"One of the things apparent right off the bat is that some of the best deals will be offered by nonprofit health insurers, including the brand new co-op plans that will be available in about half the states. These plans will be lean and mean. They won't have the enormous overhead costs of the big for-profit insurance corporations that I used to work for, and they won't have to charge extra for coverage just to satisfy the profit demands of shareholders. They won't have shareholders.

If you're wondering why Aetna, Cigna, Humana and UnitedHealth Group, four of the biggest for-profits, are not planning to participate in many of the marketplaces, it's because they know they cannot be competitive and still satisfy the profit expectations of their shareholders."

[jeff47]

56. Because nothing will ever change.

The programs will be exactly like they are today.

There aren't "blue" states that will start offering "public options". Or the blue state that's already offering single-payer. And those won't be examples for all the other states, resulting in "public options" on the purple state exchanges.

What the ACA does is move the battle to blue states. Terrain that is much more favorable for us.

[GreenPartyVoter]

58. Agreed. Now single payer or a Medicare buy-in might have

been more of a death knell for the major insurers.

[Doctor_J]

81. The insurers were given the biggest windfall in history

There is no way they will ever give it back. Potter's premise doesn't make any sense. People already know insurance companies add nothing but cost.

[Puzzledtraveller]

113. Indeed, it firmly entrenches private firms into our healthcare.

[Mnemosyne]

5. It needs to happen, and hopefully is becoming inevitable. nt

[tridim]

7. I think they will end up morphing into Federally regulated servicers for single payer.

They are basically already doing this if they are in the exchanges.

[Jackpine Radical]

10. That's the situation in Medicaid; has been for many years.

[ffr]

33. I think you'll be proven right.

Almost all of the ACA group policies I'm shopping are provided by the same carrier I have now. The only real difference, from what I can gather, is the ACA policies are cheaper.

[burnsei sensei]

8. Again, health insurance is not health care

As I've noted previously, my former CEO at Cigna said at a leadership retreat that what kept him up at night was the fear that big health insurance corporations might someday be viewed as unnecessary middlemen, that their "value proposition" would come under scrutiny and found to be wanting. That insurance companies would, to use his term, be disintermediated.

The purchase of health insurance is not the provision of health care.
When our perceptions change and we turn health care into a right and PUBLIC GOOD instead of a commodity, these corrupt organizations, these rackets, will be through.

[rhett o rick]

13. Well said. nm

[Egalitarian Thug]

24. It's as if they never knew anything about how insurance companies work.

All these rosy scenarios with these giant corporations being turned into benevolent competitors, ushering in a new age of goodness and light.

[adirondacker]

68. Excellent points. I would add that Litigation and Trial lawyers would take a serious hit in income

due to the fact that once citizens have a right to health care, regardless of the situation that necessitates it, the settlement amounts will be significantly less. There's a reason that Europe have such few cases, and this being one of them (along with safer working conditions of course).

[Roland99]

14. H.R. 676!

[Nye Bevan]

16. Health "insurance" has become, in effect, a highly regulated public utility.

The ACA is a big step on the road to single payer because it makes it obvious how superfluous the insurance companies have become.

[libdem4life]

23. Good example of a Slippery Slope...with the ACA their profits are capped at 20%...down from 40%

Even more important than the fact the ACA is working, is the loss of outrageous profits to merely excessive profits. A layer or two of plutocrats will seek, or be forced to seek, some other legal swindle in which to partake, and thus, The Slope.

[Nye Bevan]

25. Putting the insurance companies out of business in one fell swoop would have been impossible,

politically.

But squeeze... squeeze... regulate... will eventually have the desired effect.

[libdem4life]

29. Oh yes, and keep the articles coming about single payer...keep tipping the Slope

That and the term Liberal will begin to recover from the political dust heap (I hope).

I don't think it's as much of a dream as before. There is no accounting what will happen when everyone (mostly) is covered. It won't be long until they can (rightly) start complaining about the co pays and deductibles...both of which are still too high for many, especially for the poor and some middle class. Squeeze the system, start talking nationally about how great the other national health care countries have it, and people will start to wake up.

Thanks to PBO for standing firm. He will definitely go down in history as a success...as opposed to the Tea Party/Republicans. I don't think they can get rid of that stench for at least a decade.

[bvar22]

35. "their profits are capped at 20%"

That is one way to look at it.
Another way is to see that their Profit Margin has been guaranteed by the Public Treasury at 20%.
This will also be the agreed upon 20% Bottom Line on The Exchanges that will keep them from competing with each other on The Exchange.

The Smart Money says the ACA is going to be a Gold MIne for the Health Insurance Industry.


I wish I owned a business with a 20% Profit guaranteed by the Public Treasury (subsidies)...for doing NOTHING but pushing papers and cashing checks.
Nice work if you can find it...or buy the right connections in Washington.

[libdem4life]

38. Thanks for the info. At least it's a start. I still think there are a lot more surpises along the

way. Many of the sleeping have been awakened, even if it's only to learn about and sign up for some health care.

[fitman]

47. Their profits are not capped at 20%

They have to pay out 80% of premium dollars towards claims but if they get many healthy people and have volumne they will be making more than 20%.. carriers are already working around the 80/20% mandate btw...

[libdem4life]

55. Ah, but being an optimist I hope that we will be more aware?? or militant?? but most of all educated

It is complex...thanks for the info. But again my mantra...we'll now have what we didn't have... some real figures to deal with as we push toward...Single Payer.

[enlightenment]

72. A privately owned,

profit making "public utility" that has been given the federal government's imprimatur to serve as the officially mandated gatekeeper between citizens and health care.

As the program is designed, they are hardly superfluous.

[Recursion]

20. From your keyboard to God's ears

Here's hoping

[B Calm]

21. Can't come soon enough!

[L0oniX]

22. I'll be happy to shit on their graves!

[fitman]

26. I am a health insurance broker

The insurance co's practically wrote the ACA..and they are going to make billions from it..

So much misinformation out there it''s scary..

[Jackpine Radical]

28. That was the price Obama paid to keep Harry & Louise off his case.

A Heritage Foundation plan by way of Mittens.

Still, it is marginally better than what went before.

[Nye Bevan]

31. When a cancer patient has medical bills of tens of thousands of dollars per month,

how do the insurance companies feel about being legally required to sell him a policy that covers his payments in exchange for a premium of $200 or $300 per month?

[bvar22]

37. in exchange for a premium of $200 or $300 per month...

...multiplied by 40 MILLION mandated customers
How do they feel?


My guess is that they are popping the champagne.

[fitman]

44. yep, most of the 50 million ininsured are healthy, young people

It's all gonna be gravy money rolling in..

[Nye Bevan]

69. So why are Cigna and Aetna not even participating in the CT health exchange?

Why is only one insurance company participating in the NH exchange?

Surely if the ACA was such a goldmine, every insurance company would be jumping on the gravy train.

[fitman]

71. Because they are going to be selling on the private exchange

n/t

[jeff47]

59. Yeah, stock price is an excellent measure of company success

I mean, Apple's stock price is less than their cash on hand, so clearly stock price is the perfect tool for evaluating companies worth.

I especially love that you selected a company that is abandoning several states due to the ACA as proof that the ACA is a gift to insurance companies.

[fitman]

43. Insurance co's are already paying for the uninsured

Those people with cancer are getting treatment already.

Hospitals and doc's request higher reimbursement rates from the insurance carriers to make up for all the uninsured people..

Works just like shoplifting.people who buy the goods pay a little more to make up for all people who shoplift.

[Nye Bevan]

53. You have never heard about medical bankruptcy?

People losing everything because they got sick?

[jeff47]

62. And bankruptcy means they don't pay.

Or at least don't pay everything that's owed.

That's the point of bankruptcy.

[Enthusiast]

96. This nation is awash in misinformation.

That's a fact.

[DeschutesRiver]

34. Our customer service rep at regence blue cross said that none of them would be without a job because

they will now be doing their same jobs under the name Bridgespan, which is regence's name under our Cover Oregon plan. So some major insurers are migrating more than going out of business at least here.

Regence just sent a letter which raised our rates through the roof, while decreasing benefits starting Jan. 1st. And though older, we rarely go to doc, have no serious conditions, and have only made a couple of claims over the last 30 years. We were told that this was happening to most people who have a regence policy in order to encourage us to move to a less expensive cover oregon plan, which we are eager to do once the CO website is fixed, but I am wondering what is in it for Regence? They have over a half million customers here, just having passed Kaiser as the biggest insurer here. The policies I see from them and others on CO are out of this world less expensive than what I have now and what I am being threatened with starting Jan. 1.

They act like they are about to make more money under the ACA, not less.

[Zorra]

39. And when they are toast, my vendetta will be finished.

http://www.democraticunderground.com/10023648218

[Phil1934]

41. Workmen's comp

Workmen's comp is a subject that has not been addressed. If everyone has health insurance then comp would be limited to just lost pay and disability and costs should be reduced.

[Jackpine Radical]

45. Excellent point.

[Zorra]

57. Well, maybe only in states that accept ACA expanded Medicaid.

I believe that 26 red states with republican governors deliberately denied health insurance to the most needy among us.

States' refusal to expand Medicaid leaves millions uninsured

[adirondacker]

70. Do you think the trial lawyer lobby will allow for it? I have my doubts. nt

[lynne]

108. Work Comp pays even to those who have personal health insurance -

- and the premium is paid by the employer, not the employee. The policy rate is based on occupation. High-risk occupations, such as roofers, have higher premiums than someone like a clerical office employee, for obvious reasons. The ACA is now rating based on risk factors such as smoking. If they began incorporating work comp injuries into acceptable claims, would they begin to rate policies based on type of employment? That would put the premium burden on the employee, not sure that's a place we really want to go.

[CatWoman]

48. paging dfk..............

[KoKo]

49. Interesting Points of view back and forth on this thread...worth the read..

Recommend.

I think the way ACA has rolled out will cause confusion and hardship to an already stressed and battered public until they figure out the benefits which could be awhile with the online glitches. Too much emphasis on everyone being "Online" to get the info about the plans. Not everyone has great bandwidth or even ability to get online. Hopefully that will be worked out before the Dec. 15th deadline to sign up.

Is it a change for the better...hopefully leading to Medicare for all? I would hope so...but, it's going to be awhile getting there. I'm not so sure that the insurance companies aren't going to find a way to keep the profits going for a good while longer. We shall see.

The biggest positive is that those with "pre-existing conditions" will finally have access to care. That's a huge breakthrough that makes some of the confusion about the rest worth it.

I try to have an open mind...since its a step in a good direction.

[Jackpine Radical]

61. My personal view is simply that, on balance, it is better than what went before.

It is still majorly flawed, one of the biggest flaws being simple that the insurance companies are able to continue in their parasitic role, sucking value out of the system and adding to the costs.

On the other hand, there is the end of the pre-existing condition exclusion, ant the ability to continue your kids on your insurance as dependents until age 26.

A really huge flaw, one that could be fixed only by a single-payer system, is that there are no cost savings here. We continue to dump 18% of GDP into health care (still not managing to insure everyone) while the civilized parts of the world only spend 9 or 10% of their respective GDP on health care while insuring everyone.

I am also very disturbed that the cheapest plans still have large deductibles ($3-5,000) and 40% co-pays that will continue to make health care unaffordable for the people on the bottom, who are of course the very ones unable to afford better coverage.

[Hoyt]

51. At best insurers will morph into just administrators like they've been for Medicare since inception.

Insurance companies administer Medicaid and Medicare. In fact, under Medicare, they offer plans that 28% of beneficiaries have chosen over traditional Medicare. Most states, place Medicaid beneficiaries in private insururance plans. The government makes the general rules, and the insurance companies administer things.

The government is not going to invest the tens of billions in the systems needed to administer these programs.

And, another nice thing, insurance companies are the ones having the take the risk of covering 30 - 40 million uninsured, rather than the government.

Finally, while it is detestable when insurance companies decline care that appears necessary for sick people, there is no way to just open it up to providers to decide what patients need if the providers profit off the services. Too many would order an MRI, every lab test possible, etc., on every patient. The system would actually go broke like that.

I think these insurance/administrative companies should be paid a reasonable fee for doing these "administrative" things, but not profit directly from denying services. And I think that is where the writing is on the wall for insurance companies as we know them.

[Cryptoad]

54. totally aggee! nt

[Enoki33]

60. Corporate shills

That is exactly why the GOP Corporate shills are are willing to severely damage the economy in their latest gimmick to wreck the new health care plan. What still somewhat puzzles me is why the Koch brothers are so deeply involved in the wrecking process?. They almost always have an angle that benefits them directly.

[enlightenment]

63. What does Mr. Potter consider an

"outrageously high deductible"? I'm curious.

[Jackpine Radical]

66. I don't know Potter's answer, but for me,

the $3-5000 deductible and 40% copay of the Bronze Plan are outrageously high, considering that this plan may be the only one within range for many people at the bottom. Even if they get subsidies for the policies, the deductibles and copays will keep routine health care out of their budgetary capabilities.

[enlightenment]

73. I agree. The lowest priced Bronze plan

in my state has a $6300 combined medical/prescription deductible - and no coverage until it is paid. (Catastrophic insurance, though they don't call it that).

After that, the Bronze plans have medical deductibles that range from a low of $4500 to a high of $6000 with additional deductibles for prescriptions. Co-pays range from $25 to $90 (one uses percentages: 25% of the full price of a visit/treatment/test/etc).

Silver plan deductibles range from $1750 (these are higher priced premium plans) to $5500 (it does not, to its credit charge a co-pay for doctors visits but does for test/lab/etc). For the rest, co-pays are lower, $20 to $80 . . . prescriptions are on a separate deductible for most, as with the Bronze plans.

After that, the premium prices are out of reach for many people, even with subsidies (what really sucks in my state is the difference in price between the urban and rural areas. Given that the folks in the rural areas are probably some of the most stretched, it is a double blow to discover that your premium is half again as much as your friend in the city will pay).

I'm annoyed with the information provided by the website of the exchange; it is too vague. I want to see the details - the stuff that comes on the multi-page contract that you sign - and I want to see it before I am forced to make a choice. Each plan page has a link that presumably takes you to the insurance company so you can find that information, but nobody made the insurance companies have that information available, so it's been a series of dead-ends.

Most people, I think, are going to just sign up without really understanding what they are getting - and that's a shame.

[ca3799]

64. Where did the money go?

Finally got to price check Obamacare, although I'm not eligible as my employer offers insurance.
Currently, I pay $351.46 a month, or $4217.52 a year.
I can get a 'silver plan' for $7530. I would qualify for a 12% subsidy of $936, bringing my annual price down to $6594, or $549 a month. This is about $200 dollars a month more that what I pay now.
The 'bronze plan' is $4214 a year or $351 a month, exactly what I pay now until the subsidy is subtracted. The plan would then be $3709, or 309 a month.
Seems like not that big a deal, right?
But what is most interesting is that the price I pay now for insurance is not the whole cost of my coverage. My employer picks up the rest, like most employers do. The cost of my insurance is actually $17,124.82 a year.
So where did all the money go? What happened to that other $13,000?
I timed out on the gold an platinum plans. I really want to see what those prices are like.

[FarCenter]

65. More likely, health insurance companies will merge until there are only a few left in each state.

Same thing with hospital networks, diagnostic clinics, etc.

Private medical practices and medical small businesses will become a thing of the past as doctors become employees of large medical corporations. This is already happening.

[libdem4life]

87. That decribes Kaiser Permanente in Northern California. Affordable, mostly good service,

especially with preventative education. They authorize chiropractic, accupuncture, yoga classes, I'm sure lots of diabetic information, etc. because they found that it reduces their cost.

My only beef with Kaiser is that they begin to limit some services for the elderly...not death panels by any means, but the treatments become less and less aggressive. I experienced this while working with elderly folks for a couple of years.

Lots of closed down small MD offices...oddly enough, many filled by dentists. A few doctor's groups still exist, but pretty much the new professional doctor is salaried.

[FarCenter]

88. Yes, I'd expect 3 Kaiser Permanente-like medical businesses in each state

The government won't take the business over itself because they need a private corporation to ration medical care.

In another article, it said that a study in one city showed that 1% of patients consumed 30% of healthcare and that 5% of patients consumed 60%. A likely approach reforming healthcare costs is to limit high cost services to high cost patients.

[gopiscrap]

67. OMG I hope so...

I don't think Education, Prisons/Jails/Parole/Probation, Health Care and Transportation should never be privatized.

[liberal_at_heart]

74. you are living in a dream, but enjoy. Insurance companies got to help write ACA.

Quite the opposite of ACA getting rid of insurance companies. ACA already guarantees insurance companies millions of new customers that they didn't have before, and I bet there are dozens of clauses in there that we haven't heard about yet that guarantee they stay for a long, long time.

[Warpy]

76. The big insurers will become outfits that administer single payer

the same way that they do a lot of the donkey work of administration of Medicare payments.

Also realize that people are only signing up now. They will not be covered until 12.01 AM January first.

They're not going to be able to stay bloodsuckers to remain profitable enough for the 1%.

[DirkGently]

77. Failure of the infinite growth model of Capitalism.

There may have been a time when health insurance providers have provided real value, connecting patients with providers and negotiating better terms for both.

But then there is greed, and the constant demand that corporations increase profits. So instead of contributing efficiency to the process, insurers began to steal on both ends. Screw the providers on compensation; screw the patients on care.

At the end of the day, all insurers are doing now is trying to charge more for cheaper and cheaper services. That's the MBA-think that Republicans and conservatives push as the best way to conduct any kind of business. It's growth by exploitation. Suppliers on one end customers on the other. It's the Wal-marting of healthcare.

It's an impossible model with life / death issues. People don't have a choice in whether to fix a broken arm or treat a child's cancer. They will pay anything, or they will go broke trying. And doctors and hospitals can't provide care focused on healing the sick if insurance bean counters are telling them what constitutes care and what is compensable.

So we can either make healthcare something we provide ourselves through government services, or we can regulate insurance to the point where it's as close to the same thing as possible. Limit their profits. Limit their ability to prescribe or deny care. Tell them exactly how they are permitted to be middlemen, or cut them out altogether.

Maybe at some point we'll have a new capitalist model, where constant expansion and ever-increasing profits are discarded as the imaginary goals they are. Until then, for-profit industry just has to keep out of health care and prisons and the military, and anything else where the well-being of people is at stake.

[BluegrassStateBlues]

78. And dare I say, not by accident?

[TheKentuckian]

79. If wishes were fishes then we'd all cast our nets, Mr. Potter.

Meanwhile, this cartel written effort isn't squeezing anyone. Further, there is no actual intent to put the squeeze on, if there was then we at minimum, would not have a cartel with an anti-trust exemption as sole gate keeper to our health system.

Mr. Potter is not a young man and has the furtherance of much misery and death on his conscience that I'm sure he hopes to live to see undone at least in part and that his efforts now have also helped turn the tide but there a lot of moving parts and his hopes are the most optimistic of plausible outcomes and depend on rationalizations and epiphanies exerting significant outside force in reaction to small movements actually within the structure of the law. All of which is wishful thinking and finger crossed hope on a lot of moving parts not specifically set to the hoped for aim.

The CBO has projected out 20 years based on the law itself, and there is no death knell for the cartel, there is no flooding of the exchanges by newly freed corporate employees, there is no public plan competing at a much lower cost (hell, before the public option was killed it was hamstrung with all kinds of regulation to balance the difference it would have of not requiring profit and promotion), there is no wringing the profits out, MLR is set at where the industry reports already and is death with easily by simply increasing allowables as the need for increased profits grows.

All of these dreams may come true but as written, passed, and regulations written under the law, it isn't in the cards. Perhaps future efforts will modify the law into reality but what we have doesn't get there itself.

What we have is an effort to that sands down the worst abuses of the individual market and through a hodgepodge significantly expands coverage. Those are good things but we are far, far closer to the beginning of an effort than an end game.

[oxymoron]

80. K&R

[kestrel91316]

82. They are far worse than "unwanted middlemen", lol.

They are hookworms - bloodsucking PARASITES that do nothing of benefit for the insured OR the providers of care.

IMHO the officers of these medical "insurance" companies should all be frogmarched into the public square and summarily......well, I won't say it here because it's not allowed, but you probably get my point.

[Enthusiast]

97. You say truth.

[SammyWinstonJack]

85. ...

[Demo_Chris]

86. Yeah, they are trembling all the way to the bank...

The ACA, whatever else it might be, is the greatest corporate pay off in American HISTORY. They not only have mandated customers -- buy their products no matter how crappy they are or face a crushing and escalating fine -- but they also recieve a HUGE influx of cash from Uncle Obama in the form of "subsidies."

And all this for policies they will never actually have to honor, because the copays and deductibles will prevent the peasants from using them.

[ProSense]

90. This is

"The ACA, whatever else it might be, is the greatest corporate pay off in American HISTORY. "

...absolute nonsense.

Another reason Republicans hate Obamacare
http://www.democraticunderground.com/10023795712

[eridani]

92. Sorry for double posting--didn't see this n/t

[Jefferson23]

94. Highly recommend, and the beginning of the unncessary middlemen aka thugs begins.

K&R

[tavalon]

100. I was one of the people furious with this compromise, and yet, with time and

some thought, I believe this really is the first step that will end with the end of that healthcare idiocy called health insurance. Healthcare should be a right, not a privilege. I admit I was quick to judge and have had time to regret my judgement.

Do I wish we lived in a world where Obama could have brandished his sword and gotten universal health care? Yeah, but I know and he knew that we don't live in that world.

Hear that screaming? That one would be Humana, but Cigna, et. al, will be screaming too. There will be some blood shed on many sides but my hope is that before my death, the insurance companies will die.

[pacalo]

101. Good read!

[IronLionZion]

104. "four of the biggest for-profits, are not planning to participate in many of the marketplaces"

"If you're wondering why Aetna, Cigna, Humana and UnitedHealth Group, four of the biggest for-profits, are not planning to participate in many of the marketplaces, it's because they know they cannot be competitive and still satisfy the profit expectations of their shareholders."

This is important and has been spun by the other side as a bad thing when we might actually be better off without these assholes.

These corporate tools can't compete on a level playing field. There are many non-profit insurance companies who are doing very well within the law and enrolling lots of new members. The ACA is changing the game in a way that benefits a hell of a lot more people than before.

[zipplewrath]

105. Don't confuse change with progress

There is no doubt the health insurance industry is going to change in this country. That doesn't necessarily mean the end of for profit health care, much less insurance. The biggest may not be participating in the public exchanges, but that's a small slice of the overall health insurance industry. The place to watch is where the employers end up going for their insurance plans, or for the administrators of their plans (for the large companies that are self insured).

[leftstreet]

107. The biggest impact is yet to come

By 2018 employers will have no incentive to contribute to decent insurance plans

9: What is a “Cadillac Health Plan”?

The PPACA imposes a 40 percent excise tax on “Cadillac” health insurance plans. This new tax will apply to health plans valued in excess of $10,200 for individuals and $27,500 for families. Those thresholds will grow annually by inflation plus 1 percent. The tax takes effect in 2018.
http://www.cpehr.com/affordable-care-act-obamacare-for-business

Obamacare attempts to change this dynamic. Under the law, health plans that cost over $10,200 for an individual or $27,500 for a family will have to pay an excise tax of 40 percent on every dollar that they exceed that cutoff beginning in 2018. As Jonathan Gruber, an MIT economics professor who helped design the law, explained to the New York Times, the tax is meant to reorient the way that employers approach their workers’ health problems and their associated costs. “It’s focusing employers on cost control, not slashing,” said Gruber.
http://thinkprogress.org/health/2013/05/28/2064441/employers-obamacare-cut-wasteful-spending/

How Obamacare Is Encouraging Employers To Cut Wasteful Spending And Promote Workers’ Health

By Sy Mukherjee on May 28, 2013 at 4:05 pm

In an effort to cut wasteful U.S. medical spending, certain employers will be scaling back expensive health plans available to their employees and encouraging workers to pursue more preventative and ongoing primary care. The move is being prompted by Obamacare provisions that encourage a more cost-sensitive and efficient approach to Americans’ health care than the status quo.

Recently-released government data shows that Americans’ medical bills are completely random, with some hospitals charging as much as $100,000 more for the same services performed at other facilities. In turn, that drives up the costs of many private health plans, and increases companies’ spending on employer-sponsored insurance.

Obamacare attempts to change this dynamic. Under the law, health plans that cost over $10,200 for an individual or $27,500 for a family will have to pay an excise tax of 40 percent on every dollar that they exceed that cutoff beginning in 2018. As Jonathan Gruber, an MIT economics professor who helped design the law, explained to the New York Times, the tax is meant to reorient the way that employers approach their workers’ health problems and their associated costs. “It’s focusing employers on cost control, not slashing,” said Gruber.

Companies aren’t waiting until 2018 to shift their health care models. Some are increasing their use of high-deductible health plans (HDHPs) — which charge workers low monthly premiums but high annual deductibles — in an effort to raise employees’ awareness of how much their health care consumption costs.

http://thinkprogress.org/health/2013/05/28/2064441/employers-obamacare-cut-wasteful-spending/

[zipplewrath]

110. Restructuring

I suspect that you'll see major for profit health care companies begin to merge/buy health insurance arms. They'll form large coordinated groups of providers (from doctors to labs and hospitals). The providers have no limits on their costs or profit margins. They'll operate the health insurance as a subsidiary with the associated limits on costs and margins, and shift the rest over to the health care portion of the company. They could even start to try to create "exclusive" arrangements where you'll have to use their providers if you have their health insurance.

[leftstreet]

111. Too big to fail !!1111

I think you're absolutely right

[zipplewrath]

114. Worse

"You can see any doctor you want. We own them all."

[lynne]

106. Too early to tell, IMO. Health Ins. companies could actually benefit -

- from the ACA requirement that all persons carry insurance. In some cases the deciding factor is going to be premium.

Some individuals will get credits to apply towards ACA premiums, making that premium more desirable. However, there's a sector that makes too much to get significant credits to be applied to their ACA premium. This is where the premiums will make a difference. It's possible that coverage outside of ACA will be the better option for them.

[cbdo2007]

109. The major insurers will just become overpaid contractors for the govt....

as part of their Universal Health Care/Single Payer system. There is no way in a million years they will "go away".

[2banon]

115. One can hope this is the ultimate outcome..

xing fingers!