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ObamaCare Clusterfuck: Will there be double-digit price increases in 2015, or will there be even crappier plans?

Insurance industry insider Bob Laszewski writes:

To properly price the exchange health insurance business going forward the carriers have to sharply increase the rates. A senior executive for Wellpoint, which sells plans in 14 Obamacare exchanges, is quoted in a Reuters article telling Wall Street analysts there will be big rate increases in 2015, "Looking at the rate increases on a year-over-year basis on our exchanges, and it will vary by carrier, but all of them will probably be double digits."

If the health plans do issue double digit rate increases for 2015, Obamacare is finished.

There are a ton of things that need to be fixed in Obamacare. But, I will suggest there is one thing that could save it.

Crapify the plans!

For insurers to have faith Obamacare is worth the continued investment and the risk the administration needs to quickly demonstrate they understand this program is in big trouble and they are willing to make big changes to save it.

And, whatever insurance executives think, do Democrats want to go into the November elections offering the same unattractive health plan offerings at even higher prices? Open enrollment doesn't begin until November 15 but the plans will be out and will be well publicized before Election Day.

The administration can go a long way toward fixing this and do it within the scope of the statute and their regulatory authority.

Here's what I would suggest.

Give carriers the ability to offer plans outside the Bronze, Silver, Gold, and Platinum structure.

Let them offer people plans they will find attractive––premium, deductibles, and benefits.

But, require any new plans to:

  1. Satisfy the 60% actuarial minimum in the statute––no "junk" plans.
  2. Give consumers the detail to compare the standard Silver Plan to any new offerings––full transparency.

Give carriers the ability to swap current benefit mandates (that were set by regulation not statute) for lower premiums and deductibles and be completely transparent in what those trade-offs are while still complying with the underlying statutory requirement that the plans must be worth at least 60% of total health care costs. The administration has the power to do this within the scope of the law.

Would such a range of choices lead to anti-selection within Obamacare?

Yes. But it would be manageable just as broad choices are manageable within the Medicare Part D program and the Medicare Advantage program where consumers are very happy with the choices they are offered and the plans have succeeded in getting an excellent spread of risk.

So, in essence, make ObamaCare like Medicare Part D! We know where that goes.

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mellon's picture
Submitted by mellon on

My guess is that we'll see both. I don't see the rises as being small, they will be a lot more than merely double digits, I think they may weil exceed 100% if you look only at the ( artificially low ) premiums as "the price".. Because OC is an insurance of last resort which means the sickest, its beginning to hit the adverse selection death spiral stage already, that means price increases will drive away the healthy causing prices to rise still more.

There will be a lot of anger and frustration at the way that so many people wont be able to afford to go to the doctor because of the high deductibles, so premiums will have to rise instead "to make it more honest" There will be pressure to change the balance of deductibles so that they are not so onerous, which means that the practice of setting the "premium" artificially low to trap people into a system they cannot afford will be forced to end, which means that the "premiums" will probably, my guess, double, especially in the easier to hide rural areas. However the OOP max costs will stay the same or maybe only go up a little bit (20% is my guess) so they can say OOP costs didn't rise much. They will try to filter the input side by having a one issue per visit rule and making people wait months for those visits, which will last no more than eight minutes.

Or maybe something else. This is an area I am not an expert in.

mellon's picture
Submitted by mellon on

Alexa, since you asked where that came from, actually I wrote a very long piece about it that needs some cleaning up, perhaps it can be entitled "Why they lie" but the gist of it is that they have staked out some ideological positions which they cant really be honest about and at its core is this very unwholesome conflict of interest. They really are trying to increase healthcare prices, on the free trade agreement front, and I am sure that to them that is the more important issue, because they see the developing world whose iddle class is many times larger than the US and some kind of megalomania makes them blind to the real situation here. If you read the Skala paper you'll get a far better idea than you had before of this weird and quite amoral backwards ideology of the "trade liberalization" folks.

And its one that sees this home situation as being one where they absolutely have to give us the worst deal because its the principle of the thing. If they were to make exceptions for the USA their entire framing that public healthcare and public services are bad and represent the past and that privatization of everything is the future, and that compassion is bad its a theft of a market, and devalues markets and on and on and on.

Its the most monumentally ugly conflict of interest imaginable. Please read Nicks paper and you'll see that going into 2008 they had to deal with the fact that the Democrats were certainly going to win and the people expected REAL change but they had crafted the whole strategy to make themselves more money which sacrificed Americans interests in the process but they could never admit this and still cannot admit it now.

So they really could not leave it up to chance. They had to get together and figure out a script. There was too much risk that their eception for so long would be found out and that would cause a rapid and catastrophic callapse of their reality distortion field with totally unpredictable consequences. Real things and real people might happen and gain the upper hand. .

But returning to the huge limitations and conflicts of interest, realize the compelling fact that the things that they had to take off the table were all the things that could save money for us and also could save money for other countries and they DO NOT want that, you see?

In trade negotiations where they are trying to prevent some country from trying to get discounts on Rx drugs for their seniors, then people would then point to the US and say "your own people didn't allow you to do this" and they would have to completely rethink how they spin their arguments and gain access to markets.

It seems to me that rTHIS is the reason, right now that a great amount of this trade agreements are secret because they are coercive and against the interests of the people in the concerned countries, these negotiations are secret because they are literally ignoring our needs in order so that these corporations which many not even pay that much in US taxes or hire so many Americans any more - but contribute generously to politicians, the fact is to all these politicians it seems clear to me that to both parties, their main goal is to cover up their duplicity - and their second goal is to promote the corporate interests with everything else being basically a nothing but they have to appear to have been trying to do something - So its all been a drama - that was the only conclusion which I could come to.

The higher drug prices and the maintainace of a stance that privatization is the only future and that the civic and compassionate and progressive past is a anachronism is what the message f these trade agreements seems to be.

They and that free trade GATS ideological purity argument they want to project, are more important than the lives of millions of Americans. We are not even on their radar screens except as a meal to be carved up. Of course we could not sit at that table, since we were literally the meal.

Its the sad and ugly truth.

Submitted by lambert on

I think it's what Bobbit calls a change in the Constitutional order, of the same order of magnitude as the creation of the nation-state. That's basically why oligarchs are trolls and griefers with respect to all state structures. This new form of trans- or post-national "market state" is what they are seeking to create through "trade deals."