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GOP Deductibles Too High to Legally Exist

Greenbeard

Greenbeard

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Good lord. The clown show continues.

But first some background. Under the ACA, plans sold in the marketplaces are grouped into metal tiers based on their generosity, or actuarial value--the portion of the costs for a consistent set of covered benefits (the essential health benefits) that the insurer is expected to cover out of premiums collected from enrollees, vs. the portion enrollees are expected to pay out-of-pocket through deductibles, copays, and cost-sharing. (This is all on the population-level, not the relative spending proportion any particular enrollee can expect to experience.)

Bronze plans have actuarial values of 60%, meaning the insurer will pay for 60% of costs incurred on the essential health benefits, while enrollees will pay for the remaining 40% themselves out-of-pocket. That's why bronze plans have the highest deductibles. Silver plans are more generous, with 70% actuarial values. Gold and platinum plans are at 80% and 90%, respectively.

Grouping into these metal tiers allows for meaningful apples-to-apples comparisons of competing plan options. To understand how various kinds of coverage and plans stack up by actuarial value:

C11vAMuWIAAYH5_.jpg:large


The ACA makes a silver plan the benchmark, meaning the value of premium tax credits is set such that the premiums of a silver-level plan are affordable for shoppers. This is part of the reason silver plans are in some sense the default (and most popular) metal tier for shoppers buying in the marketplaces today.

The Senate GOP in its bill changes the benchmark to a plan slightly less generous than a bronze plan: a 58% actuarial value plan becomes the benchmark. That's not a very generous plan. A plan with an actuarial value that low will naturally have a pretty high deductible and high out-of-pocket spending.

But that leads to a problem. The ACA puts legal limits on how much any consumer can be asked to spend out-of-pocket on the essential health benefits in any given year. In other words, it establishes a legal ceiling on out-of-pocket maximums.

As the CBO revealed in its updated score of the Senate GOP's bill today, the deductible for the GOP's benchmark plan ($13,000 for a single person--so $26,000 for a family) is higher than the entire out-of-pocket spending limit. In other words, the plans that the GOP proposes to make the default option--and thus the plans most people will end up in--for shoppers have an existential crisis: the very high deductibles they must have to get the actuarial value down to 58% are too high for them to legally exist.

Under this legislation, for a single policyholder purchasing an illustrative benchmark plan (with an actuarial value of 58 percent) in 2026, the deductible for medical and drug expenses combined would be roughly $13,000, the agencies estimate.
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The limit on out-of-pocket spending in 2026 is projected to be $10,900. (Under current regulations, the limit on out-of-pocket spending is defined by a formula based on projections of national health expenditures.) Therefore, plans with an actuarial value of 58 percent and a deductible of $13,000 would exceed that limit and would not comply with the law unless the formula used to calculate the limit was adjusted.
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Yikes.
 
Greenbeard said:
The ACA makes a silver plan the benchmark, meaning the value of premium tax credits is set such that the premiums of a silver-level plan are affordable for shoppers.
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Simply not true in practice.
 
I have said for years that the critics of the ACA often bitch about the high deductibles all the while not realizing that for 2 decades now the cornerstone of every single conservative healthcare reform plan has been the promotion of catastrophic only, high deductible "consumer driven plans".
 
katzgar said:
77% have a premium of less than $100 so yeah it is
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That is abject and complete bull****. Substantiate this with bona fide, referenced information.
 
Harshaw said:
That is abject and complete bull****. Substantiate this with bona fide, referenced information.
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You want me to prove that my post is b******* you're going to have to prove that yourself
 
katzgar said:
You want me to prove that my post is b******* you're going to have to prove that yourself
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No, actually, I want you to prove your post ISN'T bull****, which you're required to do, but obviously there's not even an outside chance of that.
 
Nothing in the ACA makes anything illegal once the ACA is repealed.
 
Harshaw said:
No, actually, I want you to prove your post ISN'T bull****, which you're required to do, but obviously there's not even an outside chance of that.
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I'm kind of surprised that you're so willing to parade your ignorance around
 
Greenbeard said:
Good lord. The clown show continues.

But first some background. Under the ACA, plans sold in the marketplaces are grouped into metal tiers based on their generosity, or actuarial value--the portion of the costs for a consistent set of covered benefits (the essential health benefits) that the insurer is expected to cover out of premiums collected from enrollees, vs. the portion enrollees are expected to pay out-of-pocket through deductibles, copays, and cost-sharing. (This is all on the population-level, not the relative spending proportion any particular enrollee can expect to experience.)

Bronze plans have actuarial values of 60%, meaning the insurer will pay for 60% of costs incurred on the essential health benefits, while enrollees will pay for the remaining 40% themselves out-of-pocket. That's why bronze plans have the highest deductibles. Silver plans are more generous, with 70% actuarial values. Gold and platinum plans are at 80% and 90%, respectively.

Grouping into these metal tiers allows for meaningful apples-to-apples comparisons of competing plan options. To understand how various kinds of coverage and plans stack up by actuarial value:

C11vAMuWIAAYH5_.jpg:large


The ACA makes a silver plan the benchmark, meaning the value of premium tax credits is set such that the premiums of a silver-level plan are affordable for shoppers. This is part of the reason silver plans are in some sense the default (and most popular) metal tier for shoppers buying in the marketplaces today.

The Senate GOP in its bill changes the benchmark to a plan slightly less generous than a bronze plan: a 58% actuarial value plan becomes the benchmark. That's not a very generous plan. A plan with an actuarial value that low will naturally have a pretty high deductible and high out-of-pocket spending.

But that leads to a problem. The ACA puts legal limits on how much any consumer can be asked to spend out-of-pocket on the essential health benefits in any given year. In other words, it establishes a legal ceiling on out-of-pocket maximums.

As the CBO revealed in its updated score of the Senate GOP's bill today, the deductible for the GOP's benchmark plan ($13,000 for a single person--so $26,000 for a family) is higher than the entire out-of-pocket spending limit. In other words, the plans that the GOP proposes to make the default option--and thus the plans most people will end up in--for shoppers have an existential crisis: the very high deductibles they must have to get the actuarial value down to 58% are too high for them to legally exist.




Yikes.
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Where did you pull your text from. I'd like to go to the source for better background. There are some parts not adequately explained.
 
katzgar said:
I'm kind of surprised that you're so willing to parade your ignorance around
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Point proven. You never can back up anything you say.
 
SouthernDemocrat said:
I have said for years that the critics of the ACA often bitch about the high deductibles all the while not realizing that for 2 decades now the cornerstone of every single conservative healthcare reform plan has been the promotion of catastrophic only, high deductible "consumer driven plans".
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Catastrohpic-only, sure. That's what "insurance" is supposed to be.

"High deductible" is something you're making up.
 
Harshaw said:
Catastrohpic-only, sure. That's what "insurance" is supposed to be.

"High deductible" is something you're making up.
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You are arguing semantics. A catastrophic only policy by definition is a high deductible policy. The Republicans, in an excellent example of intellectual dishonesty, have for years been criticizing the ACA by saying that with many plans the deductible is so high that you pay premiums all year but pay for all your care that year out of pocket. That is exactly what they propose with "consumer driven plans". In fact, their proposal includes plans with much higher deductibles than even bronze level plans under the ACA have.

Personally, I think that high deductible catastrophic plans coupled with a HSA can make a lot of sense for many people, particularly younger people, but that doesn't change the fact the Republicans have been extremely dishonest about their intentions and their criticisms of the ACA.
 
SouthernDemocrat said:
You are arguing semantics. A catastrophic only policy by definition is a high deductible policy. The Republicans, in an excellent example of intellectual dishonesty, have for years been criticizing the ACA by saying that with many plans the deductible is so high that you pay premiums all year but pay for all your care that year out of pocket. That is exactly what they propose with "consumer driven plans". In fact, their proposal includes plans with much higher deductibles than even bronze level plans under the ACA have.

Personally, I think that high deductible catastrophic plans coupled with a HSA can make a lot of sense for many people, particularly younger people, but that doesn't change the fact the Republicans have been extremely dishonest about their intentions and their criticisms of the ACA.
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No, it isn't. It's perfectly possible to have a NO-deductible catastrophic policy.

What you are apparently considering "high deductible" is paying routine costs out of pocket.

That's not a "deductible." To say so isn't "semantics," it's factual.

According to your dishonest thinking here, having to pay for new tires is a "deductible" from your car insurance, or having to replace a toilet is a "deductible" from your homeowners insurance, which, of course, is patently absurd.

You are confusing "insurance" with some kind of subscription service.
 
katzgar said:
see its posts like this that make debate with trump types so pointless. have someone show you how to use a link
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So basically your argument is that as long as the government keeps shoving more money into the system it's all good. Fact is thst OCare premiums rose 22% per your article.
 
jimbo said:
So basically your argument is that as long as the government keeps shoving more money into the system it's all good. Fact is thst OCare premiums rose 22% per your article.
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I didn't make any argument you're making crap up yet again. The point is for the vast majority of people in this country Obamacare premiums are affordable. Premiums went up but subsidies went up also.
 
katzgar said:
I didn't make any argument you're making crap up yet again. The point is for the vast majority of people in this country Obamacare premiums are affordable. Premiums went up but subsidies went up also.
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Ya gotta love that free money.
 
Harshaw said:
That is abject and complete bull****. Substantiate this with bona fide, referenced information.
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HEALTH PLAN CHOICE AND PREMIUMS IN THE 2017 HEALTH INSURANCE MARKETPLACE

ftj7sw.png



chuckiechan said:
Where did you pull your text from. I'd like to go to the source for better background. There are some parts not adequately explained.
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Bolded underlined text is a hyperlink. The link to the CBO score is right above that text.

TobyOne said:
Nothing in the ACA makes anything illegal once the ACA is repealed.
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BCRA doesn't repeal the ACA. The ACA's out-of-pocket maximums still apply, which means the plans into which the GOP wants to shuffle the marketplace population will have deductibles too high to exist.

I suppose the next logical step is to get rid of OOP maximums, even though that's the exact opposite of the rhetoric the GOP has been pitching. They've been promising deductibles will go down, not up.

Harshaw said:
No, it isn't. It's perfectly possible to have a NO-deductible catastrophic policy.

What you are apparently considering "high deductible" is paying routine costs out of pocket.

That's not a "deductible." To say so isn't "semantics," it's factual.
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Setting a threshold for personal spending, below which the insurer won't kick in dollars and above which it will, is the literal definition of a deductible. In practice the way to distinguish between "routine" spending the individual should pay and "catastrophic" spending the insurer should pay a threshold need to be identified: the deductible.

"Catastrophic" coverage has always meant high deductible plans--usually coupled with an HSA so people can squirrel away tax-privileged dollars to pay their high out-of-pocket expenses.
 
Greenbeard said:
HEALTH PLAN CHOICE AND PREMIUMS IN THE 2017 HEALTH INSURANCE MARKETPLACE

ftj7sw.png
Click to expand...

You didn't say "for people currently enrolled through Obamacare." You said "for shoppers," which to my mind means the average American "shopper." The number of people eligible to receive premium subsidies to bring silver plan costs down below $100 is small.

Otherwise:

rpem.webp


https://www.healthpocket.com/health...7-obamacare-premiums-deductibles#.WXIOoYQrJhE

Setting a threshold for personal spending, below which the insurer won't kick in dollars and above which it will, is the literal definition of a deductible. In practice the way to distinguish between "routine" spending the individual should pay and "catastrophic" spending the insurer should pay a threshold need to be identified: the deductible.
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Paying out-of-pocket for things which aren't actually covered by plan is not a "deductible."

usually coupled with an HSA so people can squirrel away tax-privileged dollars to pay their high out-of-pocket expenses.
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So? You say that like it's a bad thing.
 
Harshaw said:
No, it isn't. It's perfectly possible to have a NO-deductible catastrophic policy.

What you are apparently considering "high deductible" is paying routine costs out of pocket.

That's not a "deductible." To say so isn't "semantics," it's factual.

According to your dishonest thinking here, having to pay for new tires is a "deductible" from your car insurance, or having to replace a toilet is a "deductible" from your homeowners insurance, which, of course, is patently absurd.

You are confusing "insurance" with some kind of subscription service.
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You are still arguing semantics.

What the industry calls "Consumer Driven Plans" all are high deductible HSA compatible plans. You pay for your own routine care because the deductible is high enough that the policy only covers you for catastrophic events like major surgery, cancer, severe trauma requiring multiple days in the hospital and so on. You pay the rest out of pocket, preferably out of an HSA plan that you build up over time. Because you are paying for routine care and ancillary care out of pocket, you have a personal financial incentive to shop for the most cost effective care and treatments for your routine and ancillary care.

See: https://www.westernhealth.com/mywha/hsa-compatible-high-deductible-health-plan/
See: HSA Eligibility ? Health Exchanges - HSA Bank

That said, as I said earlier an HSA qualified plan makes a lot of sense for many people, particularly younger healthier people. Moreover, it certainly would lead health consumers to be more cost conscious in regards to their routine care. So I am in no way against them, I am just pointing out the intellectual dishonestly on the right when they on one hand criticize the high deductible catastrophic plans (bronze level plans) under the ACA, while not pointing out that they think we should all have them.

Finally, while I do think HSA qualified plans do give health consumers an incentive to be more price conscious and shop for better prices in regards to their routine care, that will do very little to reduce overall health spending because the costs in our over all health spending is not routine, elective, and ancillary healthcare, its severe trauma, catastrophic care, chronic disease management and so on, and all of those are covered under a catastrophic plan. A couple of days in ICU will cost you more than several lifetimes worth of routine care. One major surgery will cost you much more than a lifetime of routine care. A month's worth of cancer treatment will cost you more than a lifetime of routine care. A joint replacement, diabetes diagnosis, heart disease and so on will all cost you much more than a lifetime of routine care. The problem in terms of healthcare costs are not your routine healthcare, its the big stuff, and neither party is talking about addressing those costs.

To repeat what I argued in a different thread on this subject, the solution is actually really complicated:

1. We should mandate clear and transparent pricing from providers. My wife works in insurance defense and sees medical records and billing all the time. A hospital bill is unreadable by anyone that doesn't work in the industry. Your insurance policy might be 100 pages long or so. A bill for a 3 day stay in the hospital will be hundreds of pages long, all in obscure codes.

2. We should require providers to give a good faith cost estimate at the time of consent.

3. We should figure out how to give insurers better leverage in negotiating more reasonable prices.

4. We need to look at breaking up provider monopolies. In about half of all markets, one hospital network has a monopoly owning all the hospitals, all the specialists, all the labs, and even most of the GPs.

5. We should require providers to disclose any financial interest they have in any other providers they refer you to. For example, if a specialist has a financial interest in a medical imaging company that they refer you to, they should be required to disclose that when they refer you to it.

6. We need to help out insurers with implementing more reference pricing programs within their networks.

None of these things are happening because providers are by far the biggest spenders in terms of lobbying in Washington.
 
Harshaw said:
You didn't say "for people currently enrolled through Obamacare." You said "for shoppers," which to my mind means the average American "shopper." The number of people eligible to receive premium subsidies to bring silver plan costs down below $100 is small.
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I said: "The ACA makes a silver plan the benchmark, meaning the value of premium tax credits is set such that the premiums of a silver-level plan are affordable for shoppers. "

Premium tax credits only apply to plans bought in an ACA marketplace. The entire point is that the GOP proposes to change the marketplace benchmark from a 70% actuarial value plan to a 58% actuarial value plan.

Paying out-of-pocket for things which aren't actually covered by plan is not a "deductible."
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1) I doubt the public cares much about the distinction you're attempting to draw between paying out-of-pocket for care because it isn't covered vs. paying out-of-pocket because it's covered but beneath the deductible. The GOP has promised them they'll pay less, not more. Which isn't even close to true.

2) I'd be interested in how you would propose to limit a benefit package to just "catastrophic" services (however that's defined), when a catastrophic situation may likely be experienced by someone needing a number of services that by themselves are not "catastrophic"--i.e., a situation may well be "catastrophic" because of the aggregate expense, not because of the inherent nature of a given service. Which is why catastrophic insurance is generally characterized by a high-deductible, so "routine" care falls underneath it and high-cost situations trigger the insurer to start paying.

So? You say that like it's a bad thing.
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So an HSA can only be used in conjunction with a high-deductible plan. You wouldn't need an HSA if you were in a zero deductible plan.
 
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