New Study Shows Obamacare is Stabilizing, Not Imploding

Khayembii Communique said:

Here's the summary.

MLR's (Medical Loss Ratios) have stabilized at a healthy rate. MLR's are what percentage of premiums insurers pay out in claims. The remainder is what the insurance company has on which to operate the business. MLR's over 100% are obviously losing money even before admin costs are taken into account. MLR's have come down to about 75%, from a high of 88%. 75% is a very healthy MLR. While this could creep up by year end, it still indicates a marked decline in MLR's, a hugely positive sign for individual insurers.

So it sounds like 2017 premium increases were so large because the market was normalizing and that premiums had historically been too low for insurers to be able to absorb the base claims burden. This was due to a riskier population on average entering the market than expected, and is likely tied to the challenge in getting healthy young people to sign up for insurance or the failure to expand Medicaid.

This, however, doesn't take into account the issues surrounding regulatory uncertainty or unreliable government payouts which will have an overall negative impact on premiums pricing for 2018, but with AHCA looking to fail, it appears that the individual markets could finally be normalizing and, assuming regulatory risk decreases, I would expect large insurers to quietly reenter markets they left as they let smaller competitors stabilize the market so they can enter with lower risk.

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Khayembii Communique said:

Here's the summary.

MLR's (Medical Loss Ratios) have stabilized at a healthy rate. MLR's are what percentage of premiums insurers pay out in claims. The remainder is what the insurance company has on which to operate the business. MLR's over 100% are obviously losing money even before admin costs are taken into account. MLR's have come down to about 75%, from a high of 88%. 75% is a very healthy MLR. While this could creep up by year end, it still indicates a marked decline in MLR's, a hugely positive sign for individual insurers.

So it sounds like 2017 premium increases were so large because the market was normalizing and that premiums had historically been too low for insurers to be able to absorb the base claims burden. This was due to a riskier population on average entering the market than expected, and is likely tied to the challenge in getting healthy young people to sign up for insurance or the failure to expand Medicaid.

This, however, doesn't take into account the issues surrounding regulatory uncertainty or unreliable government payouts which will have an overall negative impact on premiums pricing for 2018, but with AHCA looking to fail, it appears that the individual markets could finally be normalizing and, assuming regulatory risk decreases, I would expect large insurers to quietly reenter markets they left as they let smaller competitors stabilize the market so they can enter with lower risk.

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cuban smokes said:

what is the REAL difference between people being able to buy health insurance (pay premiums) but not being able to afford to use said health insurance?

why pay for something one cannot afford to use?

that would be like someone purchasing a car but not being able to afford the gas to throw in the tank


America needs to face it; neither the Dems nor the Reps have answers to this cluster**** ............

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tomkat364 said:

Nor does it take into account that "stability" does not equate to "affordable", "cost-effective", "fair", "necessary", or any other descriptor.

It doesn't matter how stable a price is, if it's too expensive, people can't afford it. What is a good sign for "individual insurers" is definitely not the same as what is a good sign for "individual consumers."

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tomkat364 said:

There is a very simple answer to it, but it is unpopular. Insurance has never been the solution, and the problem is that we have allowed ourselves to become dependent on the concept of getting healthcare for free. There is a mental disconnect between paying a premium and simply paying for the office visit directly.

This has led to people saying they "cannot afford healthcare," when they actually mean they cannot afford health insurance. In addition, we have come to the point where people use healthcare resources willy-nilly because a.) they don't have to pay for it directly, b.) they are paranoid by all the media hype of worst-case-scenario health stories (like zika, like "flesh-eating bacteria", like the flu), and c.) because we have so few actual worries in our day-to-day lives that minor issues like colds, bumps, and bruises (not to mention the vast array of subjective psychiatric complaints) become "severe" conditions that require doctor's visits if not more expensive urgent care/ER visits.

Unfortunately, like so many other things in America, the true problem is with the entitlement of the populace, and the cost of health-care largely reflects its uninformed, uninhibited, unbridled use.

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Khayembii Communique said:

Here's the summary.

MLR's (Medical Loss Ratios) have stabilized at a healthy rate. MLR's are what percentage of premiums insurers pay out in claims. The remainder is what the insurance company has on which to operate the business. MLR's over 100% are obviously losing money even before admin costs are taken into account. MLR's have come down to about 75%, from a high of 88%. 75% is a very healthy MLR. While this could creep up by year end, it still indicates a marked decline in MLR's, a hugely positive sign for individual insurers.

So it sounds like 2017 premium increases were so large because the market was normalizing and that premiums had historically been too low for insurers to be able to absorb the base claims burden. This was due to a riskier population on average entering the market than expected, and is likely tied to the challenge in getting healthy young people to sign up for insurance or the failure to expand Medicaid.

This, however, doesn't take into account the issues surrounding regulatory uncertainty or unreliable government payouts which will have an overall negative impact on premiums pricing for 2018, but with AHCA looking to fail, it appears that the individual markets could finally be normalizing and, assuming regulatory risk decreases, I would expect large insurers to quietly reenter markets they left as they let smaller competitors stabilize the market so they can enter with lower risk.

Click to expand...

tomkat364 said:

Nor does it take into account that "stability" does not equate to "affordable", "cost-effective", "fair", "necessary", or any other descriptor.

It doesn't matter how stable a price is, if it's too expensive, people can't afford it. What is a good sign for "individual insurers" is definitely not the same as what is a good sign for "individual consumers."

Click to expand...

Khayembii Communique said:

Here's the summary.

MLR's (Medical Loss Ratios) have stabilized at a healthy rate. MLR's are what percentage of premiums insurers pay out in claims. The remainder is what the insurance company has on which to operate the business. MLR's over 100% are obviously losing money even before admin costs are taken into account. MLR's have come down to about 75%, from a high of 88%. 75% is a very healthy MLR. While this could creep up by year end, it still indicates a marked decline in MLR's, a hugely positive sign for individual insurers.

So it sounds like 2017 premium increases were so large because the market was normalizing and that premiums had historically been too low for insurers to be able to absorb the base claims burden. This was due to a riskier population on average entering the market than expected, and is likely tied to the challenge in getting healthy young people to sign up for insurance or the failure to expand Medicaid.

This, however, doesn't take into account the issues surrounding regulatory uncertainty or unreliable government payouts which will have an overall negative impact on premiums pricing for 2018, but with AHCA looking to fail, it appears that the individual markets could finally be normalizing and, assuming regulatory risk decreases, I would expect large insurers to quietly reenter markets they left as they let smaller competitors stabilize the market so they can enter with lower risk.

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Chomsky said:

That's your take on it.

Much of the rest of the world feels differently, and virtually all of our peer nations do much better at it and provide universal care.

Amongst our peers America is the biggest failure at healthcare, and I don't buy what your selling.

Edit: I do agree with your criticism of the high costs associated with healthcare.

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Khayembii Communique said:

Here's the summary.

MLR's (Medical Loss Ratios) have stabilized at a healthy rate. MLR's are what percentage of premiums insurers pay out in claims. The remainder is what the insurance company has on which to operate the business. MLR's over 100% are obviously losing money even before admin costs are taken into account. MLR's have come down to about 75%, from a high of 88%. 75% is a very healthy MLR. While this could creep up by year end, it still indicates a marked decline in MLR's, a hugely positive sign for individual insurers.

So it sounds like 2017 premium increases were so large because the market was normalizing and that premiums had historically been too low for insurers to be able to absorb the base claims burden. This was due to a riskier population on average entering the market than expected, and is likely tied to the challenge in getting healthy young people to sign up for insurance or the failure to expand Medicaid.

This, however, doesn't take into account the issues surrounding regulatory uncertainty or unreliable government payouts which will have an overall negative impact on premiums pricing for 2018, but with AHCA looking to fail, it appears that the individual markets could finally be normalizing and, assuming regulatory risk decreases, I would expect large insurers to quietly reenter markets they left as they let smaller competitors stabilize the market so they can enter with lower risk.

Click to expand...

tomkat364 said:

There is a very simple answer to it, but it is unpopular. Insurance has never been the solution, and the problem is that we have allowed ourselves to become dependent on the concept of getting healthcare for free. There is a mental disconnect between paying a premium and simply paying for the office visit directly.

This has led to people saying they "cannot afford healthcare," when they actually mean they cannot afford health insurance. In addition, we have come to the point where people use healthcare resources willy-nilly because a.) they don't have to pay for it directly, b.) they are paranoid by all the media hype of worst-case-scenario health stories (like zika, like "flesh-eating bacteria", like the flu), and c.) because we have so few actual worries in our day-to-day lives that minor issues like colds, bumps, and bruises (not to mention the vast array of subjective psychiatric complaints) become "severe" conditions that require doctor's visits if not more expensive urgent care/ER visits.

Unfortunately, like so many other things in America, the true problem is with the entitlement of the populace, and the cost of health-care largely reflects its uninformed, uninhibited, unbridled use.

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jaeger19 said:

honestly..thats largely bunk.. except the the part about "cannot afford healthcare" really meaning cannot afford health insurance.

Like so many things in America... the go to flawed logic is that we are "an entitlement society".. when we are getting further and further from an entitled society especially for younger people.

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tomkat364 said:

Nor does it take into account that "stability" does not equate to "affordable", "cost-effective", "fair", "necessary", or any other descriptor.

It doesn't matter how stable a price is, if it's too expensive, people can't afford it. What is a good sign for "individual insurers" is definitely not the same as what is a good sign for "individual consumers."

Click to expand...

cuban smokes said:

what is the REAL difference between people being able to buy health insurance (pay premiums) but not being able to afford to use said health insurance?

why pay for something one cannot afford to use?

that would be like someone purchasing a car but not being able to afford the gas to throw in the tank


America needs to face it; neither the Dems nor the Reps have answers to this cluster**** ............

Click to expand...

tomkat364 said:

There is a very simple answer to it, but it is unpopular. Insurance has never been the solution, and the problem is that we have allowed ourselves to become dependent on the concept of getting healthcare for free. There is a mental disconnect between paying a premium and simply paying for the office visit directly.

This has led to people saying they "cannot afford healthcare," when they actually mean they cannot afford health insurance. In addition, we have come to the point where people use healthcare resources willy-nilly because a.) they don't have to pay for it directly, b.) they are paranoid by all the media hype of worst-case-scenario health stories (like zika, like "flesh-eating bacteria", like the flu), and c.) because we have so few actual worries in our day-to-day lives that minor issues like colds, bumps, and bruises (not to mention the vast array of subjective psychiatric complaints) become "severe" conditions that require doctor's visits if not more expensive urgent care/ER visits.

Unfortunately, like so many other things in America, the true problem is with the entitlement of the populace, and the cost of health-care largely reflects its uninformed, uninhibited, unbridled use.

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chuckiechan said:

Obamacare was first and foremost an income redistribution scheme couched in medical language. It never had sound, legal funding and that was known and covered up by the media from the start.

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joG said:

The premium increases are not really the problem. They just reflect the cost of healthcare in the market. What is a problem is that the per beneficiary public cost is so much higher than that of our competitors. The public costs were flat for a while in absolute terms but rose at the same time relative to our international competitors, who cut back services after 2008. There after public per capita spending started rising quickly.

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Lutherf said:

When so many states and counties only have one choice for Obamacare insurance things are bound to stabilize. That, however, isn't a sign of success. It's a sign that the plan already blew up and this is the fallout.

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Khayembii Communique said:

Only five states have one choice, and many of these were due to lack of financing for ACA and issues associated with regulatory risk.

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Khayembii Communique said:

Insurance isn't a solution to healthcare costs in general, you're right. But the ACA has had some mitigating effect on costs.

Regarding the latter part of your post, I don't really think there's a lot of evidence to support it. Quite the contrary, after ACA population healthcare spending actually rose as people went to the doctor to get checkups or address health issues they were deferring because they didn't have insurance.

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tomkat364 said:

You are interpreting the data to support your own conclusions. Let's examine this statement again...
Healthcare spending went up after the enactment of ACA, you say. That has no bearing on whether those visits were for legitimate, necessary complaints or if they were for colds and drug-seeking. More people had insurance, and so more access to care. This is again conflating healthcare with health insurance. You don't NEED insurance to get healthcare. All your statement shows is that if you mandate stuff and give stuff away for free, more people will use it.

And yet, our life expectancy doesn't increase due to all this healthcare. We don't have any more doctors than before, and are actually losing physicians: https://www.aamc.org/newsroom/newsreleases/458074/2016_workforce_projections_04052016.html
We need to face the fact that much of our healthcare used is unnecessary and does not add to quality/duration of life. When people don't need to pay for a resource, they are much more likely to use it (thereby increasing cost).

All insurance does is this:
1.) insulate the consumer from direct costs, removing disincentive to utilize the resource and preventing competition on a healthcare provider basis
2.) Redistribute resources from those who can afford healthcare to those who cannot, penalizing the healthy and supporting many with unhealthy behaviors
3.) Drive up overall spending, as you pointed out.

The problem IS insurance, and if you eliminate that problem, costs will fall.

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Lutherf said:

That's more than a little misleading. The 5 state figure only counts entire states where a single provider is available. It doesn't count the myriad counties where only 1 provider is available.

This article shows a map as of the middle of last year. Things have become worse since then.

https://www.nytimes.com/2016/08/20/upshot/obamacare-options-in-many-parts-of-country-only-one-insurer-will-remain.html

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Khayembii Communique said:

You're right, but these are largely due to the United Health exit as they covered so many rural counties. UH had significant problems with profitability and plan structuring on the new exchanges, as did everyone else, so they pulled out. As MLR's stabilize, and as the risk profile of the exchange insuree base becomes better known, it becomes easier to structure and price plans and therefore become profitable on the exchanges. I won't be surprised when UH returns in a year or two.

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Lutherf said:

Sure. When you don't have any competition left and your product is a mandated purchase, under penalty of law, by the federal government it's easy to come up with a price that works.

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Khayembii Communique said:

If that was the case, though, then they wouldn't have left. And this also isn't how it works. UH has contracts with provider networks in the area. The counties that they sell their products to are tied to their provider network contracts. While a county might have one insurance offering, it's tied to a multi-county plan negotiated with providers in the area, so it's not accurate to portray it in this manner. Further, MLR's are regulated.

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Khayembii Communique said:

Do you have data as to the averred frivolous healthcare utilization? I've worked in health insurance before and didn't personally see this happen to any large extent, though that's anecdotal. We always strove to minimize claims burden through medical management and so looked at this data very closely, as the better we managed our claims utilization the lower we could price our products, attracting a healthier insuree base.

I agree in that there are a lot of procedures that are likely done that are unnecessary but would argue that it isn't due to entitlement or an overutilization of healthcare, but rather a difference in care regimens in different systems. For example, there have been studies done that show that back surgery incidences are much higher in certain provider networks than others, who use physical therapy to treat certain forms of back pain/injury, and that data shows this is due to a variety of factors that largely influence the culture of provider networks.

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Lutherf said:

What happened is that the ACA raised eligibility for Medicaid to the point that 10s of millions became eligible and didn't need to buy insurance through the marketplace. People who made more money didn't qualify for assistance and didn't buy insurance through the marketplace. That left a relatively small number that had to use the marketplace and most of those did so only because they had a preexisting condition, the most expensive people to insure. Basically, the ACA created a small pool of high risk consumers. Add on all the extra stuff insurance had to cover and it became totally impractical to offer a plan in the marketplace.

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tomkat364 said:

I have no statistics of my own at hand to make my statement more than anecdotal.
But here is a single resource that supports my claim.
https://www.cdc.gov/media/releases/2016/p0503-unnecessary-prescriptions.html
I also have significant experience working with healthcare providers, and so I can attest to an attitude that predisposes to apathy and defensive medicine. If someone comes in complaining of chronic headaches and they don't improve with conservative therapy, it isn't long before an MRI is ordered. Partly to placate the patient and get them out of the office, and partly to CYA in case there is some incredibly rare thing going on that will get you sued.
Another example is pulmonary embolism. There was a time when the "rule-in rate" for a CT done for PE was about 5-10%. It is now closer to 1-2%, even though the technology has much better sensitivity and specificity now than it did previously. The only explanation is that we are doing more CT's to rule out PE, and including more healthy people in that population that receives the test. Thus, more unnecessary tests. Go to the ER for pleuritic pain, and you will get a CT ordered more likely than not. Emergency medicine has moved now to doing order sets based on chief complaint from triage in order to reduce wait times and make the department look better, so you can't tell me that this practice does not increase unnecessary testing.

Of course, this is assuming that we both are using the term unnecessary to mean treatments which do not result in improved objective outcomes, rather than including treatments which only reassure the patient/provider that everything is hunky-dory. And from an insurance perspective, which is your experience, the documentation is written to justify the test rather than doing the tests that are strictly justified. Thus the numbers continue to look okay from your standpoint, even though it is a coding game on the part of the physicians.

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Khayembii Communique said:

MLR's (Medical Loss Ratios) have stabilized at a healthy rate. MLR's are what percentage of premiums insurers pay out in claims. The remainder is what the insurance company has on which to operate the business. MLR's over 100% are obviously losing money even before admin costs are taken into account. MLR's have come down to about 75%, from a high of 88%. 75% is a very healthy MLR. While this could creep up by year end, it still indicates a marked decline in MLR's, a hugely positive sign for individual insurers.

Click to expand...

tomkat364 said:

Nor does it take into account that "stability" does not equate to "affordable", "cost-effective", "fair", "necessary", or any other descriptor.

It doesn't matter how stable a price is, if it's too expensive, people can't afford it. What is a good sign for "individual insurers" is definitely not the same as what is a good sign for "individual consumers."

Click to expand...

Lutherf said:

When so many states and counties only have one choice for Obamacare insurance things are bound to stabilize. That, however, isn't a sign of success. It's a sign that the plan already blew up and this is the fallout.

Click to expand...