ACA Employer Mandate hurts low wage workers
sonofghandi
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13 May 2014, 6:39 am
LoveNotHate wrote:
- Quoted: "I do think that it's likely premium rate shocks are coming [this year]. I think they begin to make themselves at least partially known in 2015 and fully known in 2016," said Chet Burrell, chief executive officer of CareFirst BlueCross BlueShield. "That will be different in different parts of the country. I don't think it will be uniformly the same."
My insurance is through Blue Cross Blue Shield, and my premiums went down on January first, after years of large increases. So it definitely depends on where you are.
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"The surest way to corrupt a youth is to instruct him to hold in higher esteem those who think alike than those who think differently" -Nietzsche
13 May 2014, 6:45 am
sonofghandi wrote:
LoveNotHate wrote:
- Quoted: "I do think that it's likely premium rate shocks are coming [this year]. I think they begin to make themselves at least partially known in 2015 and fully known in 2016," said Chet Burrell, chief executive officer of CareFirst BlueCross BlueShield. "That will be different in different parts of the country. I don't think it will be uniformly the same."
My insurance is through Blue Cross Blue Shield, and my premiums went down on January first, after years of large increases. So it definitely depends on where you are.
They still have start-up money that they were given when ACA started.
However, that money will be gone soon, and the rates will need to go higher, so these exchanges can survive without any further federal money.
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After a failure, the easiest thing to do is to blame someone else.
sonofghandi
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13 May 2014, 6:47 am
Raptor wrote:
The ACA:
The efficiency of the post office, the compassion of the IRS, all at pentagon prices.
The efficiency of the post office, the compassion of the IRS, all at pentagon prices.
The ACA doesn't run insurance companies, and only runs exchanges because some states refused to. The ACA does not set the prices for insurance premiums, the stakeholders of the insurance companies do (of which most have posted record profits on an almost annual basis). The ACA should not show compassion, as it is primarily a set of minimum standards for insurance companies.
This law is based on a Republican state plan from years before, based on a Conservative think tank's recommendations from years before, all to limit the government's involvement in health care.
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sonofghandi
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Joined: 17 Apr 2007
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13 May 2014, 7:09 am
LoveNotHate wrote:
sonofghandi wrote:
LoveNotHate wrote:
- Quoted: "I do think that it's likely premium rate shocks are coming [this year]. I think they begin to make themselves at least partially known in 2015 and fully known in 2016," said Chet Burrell, chief executive officer of CareFirst BlueCross BlueShield. "That will be different in different parts of the country. I don't think it will be uniformly the same."
My insurance is through Blue Cross Blue Shield, and my premiums went down on January first, after years of large increases. So it definitely depends on where you are.
They still have start-up money that they were given when ACA started.
However, that money will be gone soon, and the rates will need to go higher, so these exchanges can survive without any further federal money.
Insurance companies have not been given "start up" money. Those mostly web based stories were all bogus.
Check out this site, which breaks down the ACA and its likely effects on premiums (or just read the most relevant portions quoted here):
http://obamacarefacts.com/obamacare-health-insurance-premiums.php
Quote:
The Facts on ObamaCare Insurance Premiums and the Medical Loss Ratio (80/20 Rule)
The medical loss ratio, or 80/20 rule, helps to decrease the growth in premium rates. Since insurance companies have stricter regulations on what they can spend your premiums on there is less incentive for them to inflate rates.
The 80/20 Rule generally requires insurance companies to spend at least 80% of the money they take in on premiums on your health care and quality improvement activities instead of administrative, overhead, and marketing costs.
The 80/20 rule is sometimes known as Medical Loss Ratio, or MLR. If an insurance company uses 80 cents out of every premium dollar to pay for your medical claims and activities that improve the quality of care, the company has a Medical Loss Ratio of 80%.
Insurance companies selling to large groups (usually more than 50 employees) must spend at least 85% of premiums on care and quality improvement.
If your insurance company doesn?t meet these requirements, you?ll get a rebate from your premiums.
The medical loss ratio, or 80/20 rule, helps to decrease the growth in premium rates. Since insurance companies have stricter regulations on what they can spend your premiums on there is less incentive for them to inflate rates.
The 80/20 Rule generally requires insurance companies to spend at least 80% of the money they take in on premiums on your health care and quality improvement activities instead of administrative, overhead, and marketing costs.
The 80/20 rule is sometimes known as Medical Loss Ratio, or MLR. If an insurance company uses 80 cents out of every premium dollar to pay for your medical claims and activities that improve the quality of care, the company has a Medical Loss Ratio of 80%.
Insurance companies selling to large groups (usually more than 50 employees) must spend at least 85% of premiums on care and quality improvement.
If your insurance company doesn?t meet these requirements, you?ll get a rebate from your premiums.
Quote:
ObamaCare Rebates
An estimated 8.5 million Americans will receive rebates from their health insurers this summer thanks to the Affordable Care Act, which says companies that fail to spend at least 80 percent of premiums on health care must refund the difference to consumers.
An estimated 8.5 million Americans will receive rebates from their health insurers this summer thanks to the Affordable Care Act, which says companies that fail to spend at least 80 percent of premiums on health care must refund the difference to consumers.
Quote:
ObamaCare's rate review provision states that as of 2011, insurance companies are no longer be able to raise insurance premiums solely for the sake of profit. If health insurance companies do raise premiums, they will have to justify rate hikes of over 10% to the State they operate in and then disclose this information immediately on both their website and healthcare.gov.
If the State does not have an effective rate review program, the Federal Government will step in. This has already prevented many unjustified rate hikes.
If the State does not have an effective rate review program, the Federal Government will step in. This has already prevented many unjustified rate hikes.
Quote:
For instance, Connecticut reduced a proposed Anthem Blue Cross Blue Shield increase from 12.9 percent to 3.9 percent.
Quote:
As of Sept. 2012, the rate review provision has saved Americans $1 billion, in States that are enforcing the law.
Quote:
People with high-end plans may continue to see higher prices on their plans moving forward, while low to middle income Americans and employees will see an Average savings of 60% of their premiums due to subsidies, tax credits and up-front assistance. Customers in States utilizing rate review provisions who purchase marketplace insurance using premium tax credits will see the highest reduction in rates.
_________________
"The surest way to corrupt a youth is to instruct him to hold in higher esteem those who think alike than those who think differently" -Nietzsche
13 May 2014, 12:03 pm
The benefits will compensate for any hypothetical reduction in your example. Minimum wage workers gets incredibly cheap subsidized insurance when their employer offers none or when it's too expensive (over 8% of income). So for a low wage worker it's actually great news when their employer pays the penalty. It means they can go directly to the exchange, get a subsidy and get many thousands of dollars taken off their bill.
The worst case for a low wage worker is if their employer offers minimally acceptable and minimally affordable insurance, just within the limits, which could take up to 8% of their income before they could go to the exchange.
13 May 2014, 3:13 pm
sonofghandi wrote:
Insurance companies have not been given "start up" money. Those mostly web based stories were all bogus.
The co-op insurance providers got seed money.
"Q: What is a health insurance cooperative?
A: The Affordable Care Act passed into law March 2010 provided seed money to fund health insurance cooperatives in all 50 states. Section 1322 of the ACA requires that a health cooperative, known as a "Consumer Operated and Oriented Plan? (CO-OP) is formed as a nonprofit, controlled by and operated on behalf of its members/consumers".
These entities have to survive when the seed money is depleted.
Quote:
The Facts on ObamaCare Insurance Premiums and the Medical Loss Ratio (80/20 Rule)
The medical loss ratio, or 80/20 rule,.
The medical loss ratio, or 80/20 rule,.
Does this mean anything ? "Spending on healthcare" would appear to include a doctor's salary, an expansion to the hospital, a private helicopter for emergency care, new carpeting, extra staff ...
Thus making it meaningless ?
I am sure they will give back a token amount - in good years - to appease the government people. However I imagine generally it will be like ...
CEO: We are a little over the profit margin this year guys, so let's have a week long conference in Vegas!
Quote:
ObamaCare Rebates
An estimated 8.5 million Americans will receive rebates from their health insurers this summer thanks to the Affordable Care Act, which says companies that fail to spend at least 80 percent of premiums on health care must refund the difference to consumers.
An estimated 8.5 million Americans will receive rebates from their health insurers this summer thanks to the Affordable Care Act, which says companies that fail to spend at least 80 percent of premiums on health care must refund the difference to consumers.
It would seem likely that they will spend the money somehow (as noted above).
Quote:
People with high-end plans may continue to see higher prices on their plans moving forward, while low to middle income Americans and employees will see an Average savings of 60% of their premiums due to subsidies, tax credits and up-front assistance
The government is borrowing the money it sends to people. Borrowed money is not saved money.
If the government reimburses premiums, then that is a huge reason for insurance companies to raise up rates on people. Because they know they can get more money out of the government.
_________________
After a failure, the easiest thing to do is to blame someone else.
13 May 2014, 8:17 pm
simon_says wrote:
The benefits will compensate for any hypothetical reduction in your example. Minimum wage workers gets incredibly cheap subsidized insurance when their employer offers none or when it's too expensive (over 8% of income). So for a low wage worker it's actually great news when their employer pays the penalty. It means they can go directly to the exchange, get a subsidy and get many thousands of dollars taken off their bill.
The worst case for a low wage worker is if their employer offers minimally acceptable and minimally affordable insurance, just within the limits, which could take up to 8% of their income before they could go to the exchange.
The worst case for a low wage worker is if their employer offers minimally acceptable and minimally affordable insurance, just within the limits, which could take up to 8% of their income before they could go to the exchange.
This is an interesting point. However ...
"A single person who earns just $33,500 will be required to pay $258 a month in premiums". [ see source 1]
"In fact, people who earn more than two times the federal poverty level would be required to pay premiums from 6.3 percent to 9.5 percent of their incomes".
[see source 1]
"The federal poverty level for 2014 for a single person is $11,670".
[see source 2]
So, (2*11,670) is an income of ~$23,000 which will still cost an employee 6.3 to 9.5 percent of their income to pay the monthly premium. Plus, they have to pay co-pays and deductibles. And if that is all for a measly 'Bronze' plan with minimal coverage.
I think they would have to be very, very lowly paid workers for them to be better off.
sources:
1. http://www.huffingtonpost.com/richard-k ... 92729.html
2. http://aspe.hhs.gov/poverty/14poverty.cfm
_________________
After a failure, the easiest thing to do is to blame someone else.
sonofghandi
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Joined: 17 Apr 2007
Age: 45
Gender: Male
Posts: 3,540
Location: Cleveland, OH (and not the nice part)
14 May 2014, 9:21 am
LoveNotHate wrote:
sonofghandi wrote:
Insurance companies have not been given "start up" money. Those mostly web based stories were all bogus.
The co-op insurance providers got seed money.
"Q: What is a health insurance cooperative?
A: The Affordable Care Act passed into law March 2010 provided seed money to fund health insurance cooperatives in all 50 states. Section 1322 of the ACA requires that a health cooperative, known as a "Consumer Operated and Oriented Plan? (CO-OP) is formed as a nonprofit, controlled by and operated on behalf of its members/consumers".
These entities have to survive when the seed money is depleted.
Insurance COMPANIES got no seed money. These co-ops coordinate and facilitate; they are not insurance companies in any way, shape, or form.
LoveNotHate wrote:
Quote:
The Facts on ObamaCare Insurance Premiums and the Medical Loss Ratio (80/20 Rule)
The medical loss ratio, or 80/20 rule,.
The medical loss ratio, or 80/20 rule,.
Does this mean anything ? "Spending on healthcare" would appear to include a doctor's salary, an expansion to the hospital, a private helicopter for emergency care, new carpeting, extra staff ...
Thus making it meaningless ?
I am sure they will give back a token amount - in good years - to appease the government people. However I imagine generally it will be like ...
CEO: We are a little over the profit margin this year guys, so let's have a week long conference in Vegas!
Insurance companies do not pay for a doctor's salary, an expansion to the hospital, a private helicopter for emergency care, new carpeting, extra staff, so that argument holds zero water. Likewise, a week long conference in Vegas is not spending on healthcare. The 80% applies only to payments paid from the insurance company to the healthcare provider as covered by individual policy.
LoveNotHate wrote:
Quote:
ObamaCare Rebates
An estimated 8.5 million Americans will receive rebates from their health insurers this summer thanks to the Affordable Care Act, which says companies that fail to spend at least 80 percent of premiums on health care must refund the difference to consumers.
An estimated 8.5 million Americans will receive rebates from their health insurers this summer thanks to the Affordable Care Act, which says companies that fail to spend at least 80 percent of premiums on health care must refund the difference to consumers.
It would seem likely that they will spend the money somehow (as noted above).
See response above. The insurance company doesn't get to spend more money on anything except payments to healthcare providers; this provision specifically excludes salaries, bonuses, and all other expenses incurred by the insurance company.
LoveNotHate wrote:
If the government reimburses premiums, then that is a huge reason for insurance companies to raise up rates on people. Because they know they can get more money out of the government.
They cannot increase premiums just to get more money. See 80/20 rule.
_________________
"The surest way to corrupt a youth is to instruct him to hold in higher esteem those who think alike than those who think differently" -Nietzsche
sonofghandi
Veteran
Joined: 17 Apr 2007
Age: 45
Gender: Male
Posts: 3,540
Location: Cleveland, OH (and not the nice part)
14 May 2014, 9:31 am
LoveNotHate wrote:
"A single person who earns just $33,500 will be required to pay $258 a month in premiums". [ see source 1]
"In fact, people who earn more than two times the federal poverty level would be required to pay premiums from 6.3 percent to 9.5 percent of their incomes".
[see source 1]
"The federal poverty level for 2014 for a single person is $11,670".
[see source 2]
So, (2*11,670) is an income of ~$23,000 which will still cost an employee 6.3 to 9.5 percent of their income to pay the monthly premium. Plus, they have to pay co-pays and deductibles. And if that is all for a measly 'Bronze' plan with minimal coverage.
I think they would have to be very, very lowly paid workers for them to be better off.
sources:
1. http://www.huffingtonpost.com/richard-k ... 92729.html
2. http://aspe.hhs.gov/poverty/14poverty.cfm
"In fact, people who earn more than two times the federal poverty level would be required to pay premiums from 6.3 percent to 9.5 percent of their incomes".
[see source 1]
"The federal poverty level for 2014 for a single person is $11,670".
[see source 2]
So, (2*11,670) is an income of ~$23,000 which will still cost an employee 6.3 to 9.5 percent of their income to pay the monthly premium. Plus, they have to pay co-pays and deductibles. And if that is all for a measly 'Bronze' plan with minimal coverage.
I think they would have to be very, very lowly paid workers for them to be better off.
sources:
1. http://www.huffingtonpost.com/richard-k ... 92729.html
2. http://aspe.hhs.gov/poverty/14poverty.cfm
^This does not take into account subsidies for those <4X poverty levels or that the income levels for subsidies are based on MAGI, not gross income. It also does not take into account that the poverty level you listed is for a single person with no dependents. You may also want to consider that a 40 hour a week, minimum wage worker makes around $15,000 a year.
_________________
"The surest way to corrupt a youth is to instruct him to hold in higher esteem those who think alike than those who think differently" -Nietzsche
14 May 2014, 7:42 pm
sonofghandi wrote:
LoveNotHate wrote:
sonofghandi wrote:
Insurance companies have not been given "start up" money. Those mostly web based stories were all bogus.
The co-op insurance providers got seed money.
"Q: What is a health insurance cooperative?
A: The Affordable Care Act passed into law March 2010 provided seed money to fund health insurance cooperatives in all 50 states. Section 1322 of the ACA requires that a health cooperative, known as a "Consumer Operated and Oriented Plan? (CO-OP) is formed as a nonprofit, controlled by and operated on behalf of its members/consumers".
These entities have to survive when the seed money is depleted.
Insurance COMPANIES got no seed money. These co-ops coordinate and facilitate; they are not insurance companies in any way, shape, or form.
I will concede that these insurance entities are not companies, however, they still have to be profitable once the seed money is gone.
This is the big concern. If they have too many needy people, then they have to raise premiums.
Quoted: "... The story is the same in Michigan and Illinois, where the co-ops failed to offer low prices compared with other insurers and are struggling with low enrollment".
source, http://www.nytimes.com/2014/02/27/busin ... .html?_r=0
sonofghandi wrote:
LoveNotHate wrote:
"]If the government reimburses premiums, then that is a huge reason for insurance companies to raise up rates on people. Because they know they can get more money out of the government.
They cannot increase premiums just to get more money. See 80/20 rule.
I researched this, apparently, true. However, the insurance industry points out that the 80/20 does not hold premiums in check unless there are spending controls on healthcare costs.
_________________
After a failure, the easiest thing to do is to blame someone else.
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