Insurance companies losing money on ACA

[eridani]

Now that they have to cover actual sick people.

http://www.forbes.com/sites/theapothecary/2016/01/30/obamacare-pummels-blue-cross-blue-shield-of-nc-what-can-we-learn-from-this/#6ead235634f6

Blue Cross and Blue Shield of NC is expecting to lose more than $400 million on its first two years of Obamacare business. In response to its bleak experience with the Obamacare exchange, the company has decided to eliminate sales commissions for agents, terminate advertising of Obamacare policies, and stop accepting applications on-line through a web link that provides insurance price quotes–all moves calculated to limited Obamacare enrollment.

http://abcnews.go.com/Business/wireStory/insurer-aetna-lays-concerns-aca-exchange-business-36647397

Aetna has joined other major health insurers in sounding a warning about the Affordable Care Act's public insurance exchanges.

The nation's third-largest insurer said Monday that it has been struggling with customers who sign up for coverage outside the ACA's annual enrollment window and then use a lot of care. This dumps claims on the insurer without providing enough premium revenue to counter those costs.

Comment by Don McCanne of PNHP: The losses experienced by Blue Cross and Blue Shield of North Carolina represent a problem prevalent throughout the nation wherein patients, when they become ill, enter the system during special enrollment periods and then exit once their health care needs are met. The insurers along with CMS have diagnosed the problem. There is nothing wrong with our system of private insurers. It is the patients who are to blame because they are gaming the system.

The solution? Reduce special enrollment periods that were designed to assist patients who fell through the cracks. Instead, protect the insurers by preventing these people from getting coverage for the care that they need. Bankrupt them. That’ll show them.

Reducing special enrollment periods is being touted as one of the improvements that we need in the Affordable Care Act - the type of incrementalism that we should pursue as we reject overtures to establish a single payer national health program. We should pay no regard to the fact that this incremental tweak is designed to assist the private insurers and enhance their profits, at a cost of impairing access and affordability for far too many patients.

Wasn’t the Affordable Care Act designed to provide everyone with affordable access to health care? No. Single payer has such a design, but that was rejected to the benefit of the private insurers.

So now we are supposed to tweak the system to make it work better for patients? No. We are tweaking it to make it work better for private insurers. Damn those patients who try to cheat the insurers by gaming the system.

Oh wait. Under single payer the goal is to deliberately include absolutely everyone. The idea that someone is cheating by trying to sneak into the system is totally foreign to the stewards of egalitarian universal systems. How could anyone even think about devising methods of keeping people out? Perhaps it’s American Exceptionalism at work.

[Recursion]

1. Yep. Because providers aren't losing money.

Because we picked the wrong villain in 2010...

[eridani]

2. Under single payer, providers will have to negotiate

Pharma too. Not just hospitals.

[Recursion]

3. So you say. Hasn't worked for either with Medicare yet.

It's possible, I grant that. I just don't buy that it's necessary.

[eridani]

5. Then why are doctors always grousing about Medicare payment rates? n/t

[Recursion]

10. Good question. They're being overpayed by 20% by the law

And that will just get worse.

[eridani]

11. IOW, government sets the rates

That would continue under single payer.

[Recursion]

14. Government sets the rate and then is *TERRIFIED* to stick to it

The result is the Doctor Fix.

And, under single payer, every single attempt to reduce providers' outrageous charges is vulnerable to attack as "cutting Medicare"

[eridani]

17. That is no reason not to fight for health care as a human right. n/t

[Recursion]

18. I agree. It's a reason to fight against single payer as the mechanism to achieve it (nt)

[eridani]

32. Singel payer is the best way to achieve universal health care

Which you would know if you were old enough to be on Medicare.

[Recursion]

33. Asserting that over and over doesn't make it true

If it were true, you'd expect most of the industrialized world to use it, whereas in fact it's quite rare. The consistently top-rated health systems use a multi-player global budget system, and I think we probably should too.

[eridani]

34. They do nothing of the sort. Wherever private insurance is involved--

--it is under parameters strictly dictated by governments. Private insurers elsewhere are not allowed to profit from health insurance, which they use mainly as a loss leader for other insurance products.

In France, government determines what is covered and how much it will cost. They are a good bit stricter in this regard than our own Medicare. These standards are nationwide. Private insurance exists so that the non-poor can cover their 30% copays.

[Recursion]

35. Right, which is a "multi-payer global budget system", rather than single payer

Which is what I think we should use.

In France, government determines what is covered and how much it will cost. They are a good bit stricter in this regard than our own Medicare. These standards are nationwide. Private insurance exists so that the non-poor can cover their 30% copays.

Yup. It's a great system, which is why i think we should do it. France is pretty much my model for reforming our healthcare system. It is not single payer and stomping your feet won't change what "single payer" means.

[eridani]

36. Government dictating the parameters of health care financing is single payer

I personally think the system would be far easier to administer without a bunch of copays, as we are a much larger country than France. Canada also has provinces which have much independent power, just like our states.

[Recursion]

37. You can't just make up what words mean! "Single payer" says it all right there: one entity pays.

In a given Canadian province, if a treatment is covered by Medicare (I think most of the provinces call it that), then the province is the only entity that is legally allowed to pay for that treatment. That is what single payer is. If other entities can pay (ie there's more than a single payer for a treatment), it's not single payer. I don't know how the name "single payer" could possibly be clearer.

Government dictating the parameters of health care financing is single payer

Where on earth did you get that definition? Because that definition is what no economist or health care analyst has meant by it, ever.

I personally think the system would be far easier to administer without a bunch of copays

The copays are there to limit usage; France decided that was the right call for them. Pretty much every country except Canada and the UK have some form of payment at delivery for that very reason; we're just about the only industrialized country where we have payment at delivery as a serious revenue stream for providers.

If we could get doctor and hospital fees down to what they are in France, I frankly wouldn't care how we financed it. Which is why I'm much more interested in limiting those fees than in single payer.

[eridani]

38. IMO the way to get any kind of oversight is to start out insisting on single payer

If that gets bargained down to a public option, we can move from there.

[Hoppy]

19. That's because Congress (Repubs to be specific) made it illegal for Medicare to negotiate block

prices.

[Recursion]

23. And you don't think that would continue with single payer? (nt)

[Hoppy]

24. Depends --- If Hillary is Pres, forget about it.

If Bernie pulls Dems into Congress,, Maybe.

[Recursion]

25. Fair point

Granted

[ProfessorGAC]

4. Sorry. Don't Believe It

I would guess it's more how they silo different sums of money. I'd bet that, at worst, profits are lower, but no real losses are being incurred.

[eridani]

7. That may be true, but the bottom line is still that they really hate--

--having to cover qctual sick people.

[ProfessorGAC]

8. No Debate On That Point

It's not you i don't believe. It's them. That's not really how they make money anyway. The lines of credit they provide other businesses with the overage in day to day cash is the investment path that generates huge insurance company profits.

So, if they just look at input and output from the premiums and payments, they could show a loss, but what it really means is that the investment side had less free cash to lend and invest. Hence, that side made less money, but they haven't actually lost any money or value.

They're not adjusting well to the notion that they can't just say "tough luck" to those most in need.

[PoliticAverse]

6. Mandated systems only work if the mandate has teeth. The problem with the ACA was the penalty...

for not having insurance was set too low and many healthy people opted not to buy insurance and
just pay the penalty. This leads to what is knows as the "adverse selection death spiral"
(See: https://en.wikipedia.org/wiki/Death_spiral_%28insurance%29 ). Note that the penalty
for not having insurance has been increasing each year but is still significantly less than the cost
of insurance for many people.

Additionally the ACA didn't really do much to control costs.

[B Calm]

9. Losing more money or making less of a profit, but still making 20% profits

instead of 30/40% profits?

[closeupready]

12. +1000.

[eridani]

13. As I understood the OP, it was only ACA plans cutting into the bottom line

--which I'm sure remains substantial.

[WillowTree]

27. Where do you get "20% profits"?

The insurers are required to pay out in claim payments at least 80% of all premium dollars taken in. That means that salaries and operating expenses come out of the remaining 20% and anything left over after that is profit.

Big difference.

[B Calm]

29. So those high CEO salaries are the reason they want to change it to 60/40 instead of 80/20, got it!

[WillowTree]

31. The point was that your reference to "20% profits" was inaccurate as things now stand.

[Drahthaardogs]

40. Is that true?

That was what I was wondering as I read this. Obviously, if it makes the insurance companies unprofitable, it is bad. They cannot exist without some profit. If it is just that they do not get to make as much profit as they like...well tough titty little kitty.

[B Calm]

42. ACA requires heath insurers to spend 80% on health care.

The ACA requires health insurers in the individual and small group market to spend 80 percent of their premiums (after subtracting taxes and regulatory fees) on medical costs.

[Vinca]

15. Translation: the CEO could only get a $5 million bonus, not a $10 million bonus.

[WhaTHellsgoingonhere]

16. Are they begging for a Public Option?

[Hoppy]

20. What's going wrong is that moochers are getting sick.

Yes, Bertha, its sarcasm.

[WillowTree]

30. No, what's wrong is.......

.......that some people are waiting until they get sick to enroll and then stop paying premiums as soon as they get well. That's exactly the same as if someone waited until their house was on fire and then bought homeowners insurance expecting it to pay to rebuild and then cancelling the policy as soon as the new house is up. That's not how insurance works and, like it or not, until and unless Congress actually comes up with a single payer plan, insurance is what we're stuck with. It's in no one's best interest to put the insurance companies out of business before there's something to replace that system in place.

[Adrahil]

21. Establish a public option....

Anyone who does not register for a private plan is automatically covered by the public option. Premiums deducted from wages, if necessary.

[mercuryblues]

22. or perhaps

BCBS is looking for sympathy because of a few major fuckups recently.

http://www.newsobserver.com/news/business/article54011040.html

Blue Cross CEO Brad Wilson has been personally apologizing to customers during the week and promising the company will refund money wrongly drafted from customers’ bank accounts, along with any overdraft penalty fees customers incurred.

North Carolina’s largest health insurer has been dealing with the problem since last Monday, shortly after individual policies under the Affordable Care Act went into effect Jan. 1 and Blue Cross customers began panicking when they couldn’t confirm whether they were insured.

Wilson said Saturday that about 25,000 customers across the state were accidentally put into the wrong health plans, representing about 7 percent of all individual insurance customers.

And this one.

The Chapel Hill-based insurer is dealing with the fallout from a troubled health insurance enrollment for state residents on individual policies, most of them through the Affordable Care Act. Customers have been unable to verify coverage or unable to submit payment for coverage. Some say they have been assigned to the wrong policies or even signed up for multiple policies.


Many of the company’s individual policy members did not receive their insurance ID cards on time, and some are still waiting for their cards to arrive in the mail. A number of complaints involve ID cards with numbers that are not valid, rendering the cards useless.

Blue Cross had expected enrollment problems, according to internal corporate communications obtained by The (Raleigh) News & Observer, and the company had prepared to conduct a mop-up operation in the first week of January to retroactively activate customers who had been accidentally dropped from the system.

But the scale of the malfunctions exceeded anything Blue Cross officials had expected, and customers worry the insurance giant’s miscues could leave them uninsured for weeks until the situation is resolved.

Read more here: http://www.charlotteobserver.com/news/business/article54901695.html#storylink=cpy

The 2 combined had BCBS on edge. They hired police to guard the building and told employees not to tell people where they worked. Their insured were denied life saving treatments. The 2nd story was much worse than what the press revealed.

[Agnosticsherbet]

26. Elect Democrats to the House and Senate and give them the Legislative Agenda.

Health Insurance companies do not like the ACA. Those who want to get rid of it are t heir natural allies.

[B Calm]

28. More like they are whining that they can't make more than 20% profit as ACA dictates and

want more of our money.

[smirkymonkey]

39. Fucking leeches!

All they care about is making money off of people's tragedies. It makes me sick.

[Lee-Lee]

41. This has been all over the news here in NC. The mandate must have real teeth for the idea to work

Right now many people have crunched the numbers and realized they are better off buying coverage where and where they want it and dropping it after they get their surgery or treatment.

It goes against every notion of how it was supposed to work with everyone paying into the pool all the time.

Unfortunately there is a whole of of "told you so, freeloaders and scammers will ruin insurnace if you force or existing coverage" and "we told you so" coming from the right and this news probably sealed the deal of Medicaid expansion never happening here.

The mandate needs real, real teeth. Not just fines either, but fines backed by jail time. People otherwise won't care.

[Ligyron]

44. Yeah, in jail they'll get health care anyway and it won't cost them a dime

[madokie]

43. fuck them

insurance companies should not be in the mix of healthcare to begin with

cry you mo'fo's but it will fall on a deaf ear here as I don't care one wit about your financial health.