Health Insurance That Doesn’t Cover the Bills Has Flooded the Market Under Trump

[TU Curmudgeon]

This is an unsupported conspiracy theory.

No it isn't.

You asked

"Why doesn’t market competition rein more of this in? And on ACA-compliant coverage, why aren’t these loss ratios used to deny premium increase requests?"
​

and I responded

"Because the people requesting the increases [a] make bigger campaign contribtions than the people opposing them, and because the people requesting the increases have total control over the data used to support their request and can use (or not use) whichever portions of it they think will best suit their requirements (for increased profits)?
(emphasis added)
​

did you miss what my response actually was?

Divisions of insurance and related regulators are not a bunch of elected politicians accepting campaign donations.

True, they only work for "a bunch of elected politicians accepting campaign donations".

Further, if we should blindly assume government is so hopelessly corrupt, then it reflects very badly on any notions to look to government to address this problem or any other one.

One doesn't have to "blindly assume" anything, one has only to look at voting records and sources of campaign funds.

When a politician campaigns as being adamantly opposed to "X", but then votes in favour of "X" as soon as a sufficiently (personally?) lucrative "rider" has been attached to the bill that would allow "X", you can draw your own conclusions as to whether the politician is "corrupt" or not.

When the voters repeatedly re-elect politicians who campaign as being adamantly opposed to "X", but then vote in favour of "X" as soon as sufficiently (personally?) lucrative "riders" havebeen attached to the bill that would allow "X", you can draw your own conclusions about the overall health of the political system.

"Unless the citizenry is actively (and intelligently) involved in finding out what their government is doing and unless they are successfully ensuring that their government is doing only what it is supposed to be doing, 'universal suffrage' and 'regularly scheduled elections' are no more 'Democracy' than boiling an egg is hatching a chicken."
- 'Agent X89A' (ca. 2001)
​

Think about it.

 

[Neomalthusian]

No it isn't.

You asked

"Why doesn’t market competition rein more of this in? And on ACA-compliant coverage, why aren’t these loss ratios used to deny premium increase requests?"
​

and I responded

"Because the people requesting the increases [a] make bigger campaign contribtions than the people opposing them, and because the people requesting the increases have total control over the data used to support their request and can use (or not use) whichever portions of it they think will best suit their requirements (for increased profits)?
(emphasis added)
​

did you miss what my response actually was?

True, they only work for "a bunch of elected politicians accepting campaign donations".

One doesn't have to "blindly assume" anything, one has only to look at voting records and sources of campaign funds.

When a politician campaigns as being adamantly opposed to "X", but then votes in favour of "X" as soon as a sufficiently (personally?) lucrative "rider" has been attached to the bill that would allow "X", you can draw your own conclusions as to whether the politician is "corrupt" or not.

When the voters repeatedly re-elect politicians who campaign as being adamantly opposed to "X", but then vote in favour of "X" as soon as sufficiently (personally?) lucrative "riders" havebeen attached to the bill that would allow "X", you can draw your own conclusions about the overall health of the political system.

"Unless the citizenry is actively (and intelligently) involved in finding out what their government is doing and unless they are successfully ensuring that their government is doing only what it is supposed to be doing, 'universal suffrage' and 'regularly scheduled elections' are no more 'Democracy' than boiling an egg is hatching a chicken."
- 'Agent X89A' (ca. 2001)​

Think about it.

It is far too easy and simplistic to throw our hands in the air and conclude that government is corrupt because rich people lobby elected leaders, but that leaves no plausible solution or way forward. It's futile and nihilistic to cynically declare government too corrupt to effectively regulate, unless your philosophy is anarcho-capitalism.

I'm not going to blindly assume, as you are, that because insurance companies can lobby, that state actuaries and divisions of insurance who work for department directors who work for deputy commissioners who work for a commissioner that was appointed by a governor therefore are all acting in such a way as to repay the insurance companies for donating to that governor's campaign by freely approving premium increases even when medical loss ratios are well under what they could be. If government is that hopelessly corrupt, what's the point of contemplating any policy solutions to our health care situation?

 

[TU Curmudgeon]

It is far too easy and simplistic to throw our hands in the air and conclude that government is corrupt because rich people lobby elected leaders, but that leaves no plausible solution or way forward.

If that's your take on my position, then you don't understand it.

Government is "corrupt" simply because the VOTERS allow it to be "corrupt".

It's futile and nihilistic to cynically declare government too corrupt to effectively regulate, unless your philosophy is anarcho-capitalism.

Agreed and my solution is promoting a citizenry that is actively (and intelligently) involved in finding out what their government is doing and taking every effort possible towards successfully ensuring that their government is doing only what it is supposed to be doing.

I'm not going to blindly assume, as you are, that because insurance companies can lobby, that state actuaries and divisions of insurance who work for department directors who work for deputy commissioners who work for a commissioner that was appointed by a governor therefore are all acting in such a way as to repay the insurance companies for donating to that governor's campaign by freely approving premium increases even when medical loss ratios are well under what they could be.

If that also means that you are going to blithely assume that it is NOT the case, then you are going to end up with a very dirty short end of a stick.

If government is that hopelessly corrupt, what's the point of contemplating any policy solutions to our health care situation?

You do know that "The Mice" have more options than "White Cats" or "Black Cats" or "Spotted Cats" or "Stripped Cats" from which to chose the people who represent them in government, don't you?

 

[Greenbeard]

Why doesn’t market competition rein more of this in? And on ACA-compliant coverage, why aren’t these loss ratios used to deny premium increase requests?

For ACA-compliant health plans, if they don't meet the MLR requirements they have to rebate the difference back to the consumer. Those rebates came out to about $1.4B in 2018. But yes, the more competitive we can make the marketplaces, the better.

 

[TU Curmudgeon]

For ACA-compliant health plans, if they don't meet the MLR requirements they have to rebate the difference back to the consumer. Those rebates came out to about $1.4B in 2018. But yes, the more competitive we can make the marketplaces, the better.

Since all of the healthcare insurance companies are buying healthcare services for $X.xx and selling them for "$X.xx" + $X.xx * (1+z), the more that you can reduce the "z" the less expensive the healthcare services are going to be for the people who end up buying them. This does increase competition as the healthcare insurance companies can only compete by reducing the "z". Ultimately the "most competitive" price for healthcare services is going to be where the "z" is equal to zero. The number of "for profit healthcare insurance companies" that are going to remain interested in selling healthcare insurance when the "z" reaches zero is going to closely approximately that value of "z".

I say "closely approximate" because some of them will still want to offer it as a "loss leader" the same way that your local supermarkets price bread and milk to entice you into their store so that you will buy the products that they are still making a profit on.

 

[Greenbeard]

Since all of the healthcare insurance companies are buying healthcare services for $X.xx and selling them for "$X.xx" + $X.xx * (1+z), the more that you can reduce the "z" the less expensive the healthcare services are going to be for the people who end up buying them. This does increase competition as the healthcare insurance companies can only compete by reducing the "z".

No. Finding administrative efficiencies is one way insurers can compete on premium. But the point of using marketplaces is to push them to work on the others as well.

Namely:

1) Smarter benefit design

E.g., Fast-Tracking Value-Based Insurance Design on Exchange Marketplaces

“By eliminating or reducing cost-sharing for high-value services, VBID [value-based insurance design] holds promise in reducing financial barriers to needed medical care, improving adherence to prescribed treatments, and achieving better health outcomes,” AHIP explained in their recent post about the study...

The goal of the study was to keep deductibles and premiums the same while encouraging use of cost-effective treatments over wasteful ones. In doing so, the plan not only incentivizes effective healthcare spending but also makes treatments with stronger results more financially accessible.

2) Population health management

E.g., Insurers deploy data to advance population health management

The managed-care organization achieved that by not only providing behavioral health screenings and faster referrals to mental health services, but by addressing some nonclinical factors like poverty, food and housing insecurity, and environmental exposures such as homes with lead paint...

“We actually did things like buying air conditioners and delivering meals,” said Dr. Seth Feuerstein...

For-profit Magellan isn't alone in addressing problems that previously were not tasked to healthcare organizations. In an effort to lower spending and improve patients' lives, payers and providers are becoming increasingly responsible for a community's overall health...

And now, more insurers are leveraging that information to help their bottom lines. According to a recent Change Healthcare survey, 42% of payers are adding community programs and resources to their population health efforts. Another 34% of payers said they use census and socio-economic data along with clinical data to create new programs.

3) Aggressive provider contracting/network design to get price concessions from providers or offer access to lower-cost provider networks

E.g., Hospital prices drop for the first time

“This appears to be a combination of the public sector pressure, but an even more fierce change on behalf of the private payers,” said Paul Hughes-Cromwick, a senior health economist at the Altarum Institute's Center for Sustainable Health Spending.

“Insurers are more aggressively bargaining with hospitals and more aggressively investing in programs that lower hospital utilization rates,” said Neraj Sood, an associate professor in health economics and policy at the University of Southern California. . .But the pressure on insurers to compete on price in the Affordable Care Act-created insurance exchanges may have better positioned them to wring price concessions from hospitals, Hughes-Cromwick said.

4) Smarter contracting to encourage providers to re-design care delivery

E.g., Changing The Way Doctors Are Paid Made Patients Healthier And Saved Money, Study Finds

The program, called the Alternative Quality Contract, works in two key ways. . .

The second part of the program changed how doctors, hospitals and other providers are paid. In a typical health payment system, providers receive payments for each service they perform, but Blue Cross Blue Shield’s new program uses a different system, known as a global payment model.

In this system, primary care providers receive a spending target from Blue Cross Blue Shield for their members’ care. If they spend less than the target amount by the end of the year, the providers and the health insurance company split the cash. If the doctors overspend, they and insurer split the extra cost. The theory is that this will encourage physicians to take extra steps to avoid expensive care like emergency room visits and hospital stays.

 

[noonereal]

It should come as no surprise that the Trump administration has made enabling predatory actions by bad actors and promoting junk insurance the centerpiece of its health care agenda, such as it is. Junk plans--"short term" health plans, despite the fact that they're now available for the entire year--are on the verge of becoming a bonanza for hucksters no longer bound by consumer protection rules.

Think of these plans as the Trump University of health insurance. Beyond failing to offer the basic protections and coverage people have come to expect in the age of the ACA (pre-existing condition protections, no caps or limits, etc), short term plans on average spend an absurdly low 39 cents of every premium dollar they collect on actual medical care. By contrast, ACA-compliant plans are legally required to dedicate at least 80-85% of premiums on actual care.

Health Insurance That Doesn’t Cover the Bills Has Flooded the Market Under Trump




"Grifters gonna grift" remains the guiding philosophy of policy coming out of this administration.

Do you really think there is a Trumpet anywhere who is cerebral enough to understand this and accept the facts?

 

[TU Curmudgeon]

No. Finding administrative efficiencies is one way insurers can compete on premium. But the point of using marketplaces is to push them to work on the others as well.

Actually the answer is "Yes.". "Finding administrative efficiencies is ANOTHER way insurers can compete on premium, as is reduction in advertising.

Both of those produce greater results the FEWER insurers there are.

Namely:

1) Smarter benefit design

Agreed, having an insurance policy that covers less would enable premiums to be reduced.

2) Population health management

Agreed, treating medical conditions BEFORE they cost a lot of money to treat would enable a reduction in premiums. Of course that would also mean a vastly expanded network of healthcare service providers and vastly increased advertising in order to ensure that the insured people actually went and received the prophylactic treatments that they were supposed to receive AND followed the life-style regime they were supposed to follow AND (naturally) if the insured people did NOT do what they were supposed to do, that would mean that their healthcare coverage would be voided for a contractual breach on their part, AND that would mean that the insurance companies simply wouldn't have to base their premiums on calculations that included the costs which were (naturally) no longer covered or on the services which were not being used.

3) Aggressive provider contracting/network design to get price concessions from providers or offer access to lower-cost provider networks

Indeed, if someone has 10 cars to sell and there are 20 people bidding on those cars, the only logical conclusion is that the vendor will sell the cars to the 10 LOWEST bidders. Unless, of course, you are talking about a consortium of healthcare insurance providers negotiating as a monolithic bloc and telling the health care providers things like "Unless you reduce your charges for CCU stays to $50.00 per day we simply are no longer going to be providing insurance for stays in CCUs and then you won't have any patients in your CCUs.".

4) Smarter contracting to encourage providers to re-design care delivery

What you are actually talking about is "intelligent design" and that means that the healthcare providers actually have to know what it is costing to provide each and every service.

ALL of your suggested improvements can be met by using rational planning and reducing the number of competing insurance providers to the minimum. That minimum is - 1.

 

[Greenbeard]

Actually the answer is "Yes.". "Finding administrative efficiencies is ANOTHER way insurers can compete on premium, as is reduction in advertising.

Sounds like we agree, "insurance companies can only compete by reducing the 'z'" is false. There's lots they can and are doing beyond htat.

Agreed, having an insurance policy that covers less would enable premiums to be reduced.

That's not what "benefit design" means.

Agreed, treating medical conditions BEFORE they cost a lot of money to treat would enable a reduction in premiums. Of course that would also mean a vastly expanded network of healthcare service providers and vastly increased advertising in order to ensure that the insured people actually went and received the prophylactic treatments that they were supposed to receive AND followed the life-style regime they were supposed to follow AND (naturally) if the insured people did NOT do what they were supposed to do, that would mean that their healthcare coverage would be voided for a contractual breach on their part, AND that would mean that the insurance companies simply wouldn't have to base their premiums on calculations that included the costs which were (naturally) no longer covered or on the services which were not being used.

Maybe I wasn't clear. The reason I included links is because everything I'm talking about is already starting to happen, this isn't theoretical stuff. We're in Year Six of the ACA's new incentives. And one of the ways to win under the ACA is for payers and providers to get serious about helping people get and stay healthy.

Indeed, if someone has 10 cars to sell and there are 20 people bidding on those cars, the only logical conclusion is that the vendor will sell the cars to the 10 LOWEST bidders. Unless, of course, you are talking about a consortium of healthcare insurance providers negotiating as a monolithic bloc and telling the health care providers things like "Unless you reduce your charges for CCU stays to $50.00 per day we simply are no longer going to be providing insurance for stays in CCUs and then you won't have any patients in your CCUs.".

Sellers in the marketplaces have put out products with a range of network breadth: you can buy broader network offerings that include higher priced providers, or you can buy generally cheaper narrower network products that cut out high-priced providers. The latter have proven to be popular, which has led to price concession from providers in some markets.

What you are actually talking about is "intelligent design" and that means that the healthcare providers actually have to know what it is costing to provide each and every service.

Yes, it holds providers accountable for their costs. This has been going on for several years now, it's one of the most important changes to the health care system ushered in by the ACA.

ALL of your suggested improvements can be met by using rational planning and reducing the number of competing insurance providers to the minimum. That minimum is - 1.

Perhaps, but the current proposals for single-payer feature no benefit design at all, dismantle most of the payment reforms re-shaping the delivery system and encouraging population health management, and to date don't contain workable mechanisms to determine pricing. Which is to say, they're missing all of the most important ingredients.

 

[TU Curmudgeon]

Sounds like we agree, "insurance companies can only compete by reducing the 'z'" is false. There's lots they can and are doing beyond htat.

I agree, there ARE other ways, such as "monopoly/cartel formation" and "acting in concert" that the insurance companies can "compete".

That's not what "benefit design" means.

The insurance companies will tell you that it isn't what it MEANS, but that is - effectively - what it DOES.

Maybe I wasn't clear. The reason I included links is because everything I'm talking about is already starting to happen, this isn't theoretical stuff. We're in Year Six of the ACA's new incentives. And one of the ways to win under the ACA is for payers and providers to get serious about helping people get and stay healthy.

Yes, reducing claims costs without reducing premiums does do rather healthy things for your balance sheet.

Sellers in the marketplaces have put out products with a range of network breadth: you can buy broader network offerings that include higher priced providers, or you can buy generally cheaper narrower network products that cut out high-priced providers. The latter have proven to be popular, which has led to price concession from providers in some markets.

Indeed, and you can buy insurance that doesn't actually do very much at all at quite a reasonable price as well.

Yes, it holds providers accountable for their costs. This has been going on for several years now, it's one of the most important changes to the health care system ushered in by the ACA.

My father installed one of the very first computer billing systems in the US, that was back in the early 1960s. That system enabled the hospital to bill for every band-aid and box of tissues that the patient used. I don't believe that the ACA was in effect then.

Perhaps, but the current proposals for single-payer feature no benefit design at all, dismantle most of the payment reforms re-shaping the delivery system and encouraging population health management, and to date don't contain workable mechanisms to determine pricing. Which is to say, they're missing all of the most important ingredients.

Then might I be so rude as to suggest that the US start looking OUTSIDE of the US to see how other countries manage to make it work (rather than attempting to [a] make it work, and make sure that the private insurance companies don't suffer any diminution in profits?