Negative Consequences of Health Law Force Health Insurers to Withdraw from Markets Across the Country

But...unsubstantiated allegations are so much more fun...:)

Well chelli - there are still those insurance companies OWNED by the unions who write group coverage for teachers!

Yes, God forbid, working people have a stand in their health care coverage...even worse that teachers should be given anything other that a penance for their work. All public workers--service workers--should be happy that they get what they get. Sigh.

I have a story from my 15 years in the private sector. I was doing HR, CA, and bookkeeping. I went into the job because I was relocated for my hubby's job. I learned after 6 months that my pay was $2 below my subordinates'. I said, change it or I'm gone. They changed it to equal their pay. Then, I was recruited, within the same company with the promise of a $4 per hour raise, hired, and then it all went skeezy. I seriously had corporate execs coming in and threatening my job if I took the job at the other sight. I chose not to, but knew enough to move my family back to where we wanted to be. It was pretty amazing that people were fighting over me, and I got a crappier job out of it. But to this day, I bad mouth that company every chance I get. The thing is, that my insurance, now, is actually usable. Before that, it was only emergency situations that were covered. The point is--companies and people will take advantage of anyone they can--we need to be smart and force them to do the right thing. It's especially important if you are a service worker for the public at large. Everyone likes to blame them when something goes wrong, but they NEVER celebrate the victories.

Chelli, there are really viable options for health care reform that don't include destroying insurance companies, but the government didn't want to hear them. The biggest problem I see is that the Feds, in their infinite wisdom (/sarc) tried to make full 100% coverage "affordable" for everybody.

The path they SHOULD have taken was to make minimum coverage available for everybody at a truly affordable cost. For instance, Blue Cross offers some plans here in Western PA under $100 per month. Sure they include an 80/20 plan a deductible and a maximum, but the bottom line is that the net result is that people would be protected from those catastrophic events which put people into bankruptcy.

And while I am in favor of free enterprise, I think that a teachers union owning the insurance company which covers the teachers is not a positive thing unless the cost is competitive for the school districts (read tax-payers here) and the insurance company is not holding those school districts hostage from getting other bids. What we have found is that this is NOT the case.

Let me tell you a story here. My husband is a member of the Steel Workers of America. They do negotiate for their health insurance. We have an excellent plan with extremely low deductibles, full coverage in and out of network, etc. It is the ONLY plan the employer is permitted to offer and the union members do not pay a dime for the coverage. Sounds good, right? Well last year, my husband got laid off for 5 months. After the first month we had to pay for our own health insurance. BOY was I surprised to find out that the cost was $1400 per month. We had to pay 66% of that under COBRA. The bottom line is that our cost for the health insurance was equal to 3 weeks of unemployment for my husband. How did that "help" us in any way? The $4000 we paid for insurance oer those 5 months would have gone really FAR toward paying actual medical bills (of which there were none). It would have paid 5 months of my mortgage and 12 car payments. So YEAH, I'd love to have a "say" in my health insurance.

what will happen to these insurance companies if they withdraw from all 50 states?

They will not be covering any members. they will receive no premium payments. They will not be paying any claims. They will, after a short period of time, no longer exist.

kjm:

Sure they include an 80/20 plan a deductible and a maximum, but the bottom line is that the net result is that people would be protected from those catastrophic events which put people into bankruptcy.

Pardon me, but that's totally contradictory.

I'm just surprised that you completely and utterly contradicted yourself in directly adjacent sentences. It's smarter to insert a whole paragraph in between the mutually exclusive alternatives expressed as if they were reasonably congruent.

If there's a "maximum" the plan cannot possibly protect from "catastrophic events which put people into bankruptcy."

the "Maximum" is generally $1 MIL

kjm:

So what?

Does "maximum" = "maximum"?

Never mind the fact that the deductibles alone and 20 part of 80/20 might be more than enough to result in bankruptcy for a median family, which is why those rubbish $100 policies are worthless anyway, the fact is, if there's a maximum you cannot say that it protects against catastrophe.

Unless you think catastrophe means "only under $1 million." Do you?

jack you don't have a clue what you're talking about. The VAST majority of policies in America have annual claims well under $50,000. We are talking about the difference between a policy that is $100 a month and $800 a month. The savings on that, by the way is $700 PER MONTH or $9,400 per year so I'm PRETTY SURE that would cover the deductibles for MOST PEOPLE.

Before you take me to task on this why don't you do a little bit of research and find out how much MOST PEOPLE USE THEIR INSURANCE on an annual basis. It might be a bit of an eye-opener for you

kjm:

We're not talking about "most" people, we're talking about the most vulnerable people. Those who hit the maximum, who have no insurance, who can't afford the deductibles, etc.

The most vulnerable @!$%#ing people who won't pay ANYTHING for their insurance. BULL @!$%#! Let them get by with an 80/20 plan if I'm the one paying for it!~

kjm:

if I'm the one paying for it!~

Actually, I've been paying for yours all these years and didn't know it. And I even paid 34% of it when you were paying it "all" yourself.

I don't think so. Care to explain how?

kjm:

You're on your husband's plan, which is subsidized by the federal tax exclusion for employer provided health insurance, then you only had access to that group plan because of a federal law called COBRA (look up what the acronym stands for) rather than the even more expensive individual market, and then you only had to pay 66% of the COBRA payments. Who the hell do you think paid the rest? John Galt?

I'm stunned but not the slightest bit surprised whenever one of you righties starts blathering on about your own personal health insurance situation. That's because it never fails that it turns out you simply have yours and you want to keep yours even if you only have it because of government subsidy or progressive policy.

Sounds good, right? Well last year, my husband got laid off for 5 months. After the first month we had to pay for our own health insurance. BOY was I surprised to find out that the cost was $1400 per month. We had to pay 66% of that under COBRA. The bottom line is that our cost for the health insurance was equal to 3 weeks of unemployment for my husband. How did that "help" us in any way? The $4000 we paid for insurance oer those 5 months would have gone really FAR toward paying actual medical bills (of which there were none). It would have paid 5 months of my mortgage and 12 car payments. So YEAH, I'd love to have a "say" in my health insurance.

So who do you really have the problem with, unions, Cobra, or insurance companies? You liked the plan when you had it, but found out its worth when you didn't? I honestly have to say that my biggest beef is that the insurance companies are just sucking us all dry, and trying to deny many claims when they actually have to pay up. Nobody likes to pay for the "what if's" until they happen, but all are happy they have a back up when the "if" happens. Nobody wants to spend 5 mortgage payments and 12 car payments, but I will guarantee that if someone in your family has a catastrophic incident, you'd pay it 10 fold. BTW, that $1400 per month was part of your husbands pay package that he no longer recieves. Try this in the non-union sector, that package would have been gone on day 1. Cobra, not so great for covering big health problems...and just try finding private insurance if you have a pre-existing health problem. Not going to happen.

Jack I was on cobra for exactly 4 months. Not the YEARS you discussed, and I didn't PASS the law - government did. Should I have just walked away from a benefit my tax dollars are providing and let everyone else take advantage of it?.

Chelli: I NEVER found the plan "worth it". I always thought it was a big waste of money and YES, I blame the union. How in the hell can I blame the insurance company? do you blame GM that your Cadillac is $50000 when you only needed a $20000 Chevy? And you really need to do some investigation on insurance companies. They deny approx 5% of claims - usually for things like double filing of claims, claims filed with the wrong carrier or coverage was not included under the policy. The insurance companies are "sucking us dry" because they are REQUIRED to put money aside for FUTURE claims without even knowing how much those claims would be.

As far as "package gone on Day 1" No. You are wrong. A health insurance plan MUST stay in effect when you are fired in the private sector until the FIRST DAY OF THE NEXT MONTH. Additionally, COBRA does not apply only to UNIONS, it applies to EVERYBODY.

Really, chelli, you are an intelligent person. WHY are you, of all people, buying into the rhetoric about the "evil" health insurance companies? You wouldn't blame Allstate for denying an Auto claim for damage to your home from Fire would you? Please do some independent investigation. Americans expect health insurance to cover everything and want to pay for a stripped down policy. Remember what health insurance was prior to the 1970's when HMOs started? Usually a $100 deductible, then 20% paid by you and 80% paid by the insurance company. And there was a maximum amount of coverage - usually $1 Mil. And you know what? Insurance was AFFORDABLE and the companies were profitable at that premium. The entire basis of insurance is predictability. When you have absolutely NO IDEA how much you will have to pay in a given year, you MUST charge more. You do realize that insurance premiums are not just a number picked out of the sky, right? They are developed by actuarial studies based on paid claims and unpaid claims which require reserves. Rates are filed with the State Insurance Departments and THEY approve them or deny them. Saying that insurance companies are sucking us dry is uninformed at best and a socially acceptable talking point

kjm:

I was on cobra for exactly 4 months.

That's EXACTLY the freaking point. NOBODY is ever on COBRA for more than 18 months anyway. The "years" I discussed was all the years of tax subsidy, etc., and other kinds of gummint support for the insurance you have.

Should I have just walked away from a benefit my tax dollars are providing and let everyone else take advantage of it?.

And no, you shouldn't. You should shut up, though, with the whining about your taxes going to other people's benefits when it's clear that other people's taxes go to your benefits.

jack - just exactly WHEN do you think the government actually PASSED the COBRA law that said they would pick up 33% of the cost? Hmm?? The "Years" you discussed was bull@!$%#. This went into effect WHEN THE ECONOMY TANKED,

And I don't need to SHUT UP as long as I can fight against ANYBODY'S tax dollars being wasted. SO BITE ME! You really need to take it down a notch. You're moving from being my favorite pain in the ass to just being a pain in the ass

kjm:

The very fact of COBRA even without the subsidy is a federal benefit. That's why they passed a federal law imposing it.

It allows someone whose only "work" was to marry some guy who belongs to a Union that bargained excellent coverage to stay in the group even when the employer is no longer providing the coverage.

And I don't need to SHUT UP as long as I can fight against ANYBODY'S tax dollars being wasted.

Good. So we agree on eliminating the employer exclusion?

And I deserved that bite me. That came out harsher than I intended. First cuppa coffee.

Jack PLEASE have a second cup. Lets talk about COBRA for a minute. You seem to be under the impression that the government somehow subsidizes health insurance under COBRA and HIPAA.

The truth is that the government subsidies were available from 2009 until May 2010. That's all. THE END.

COBRA is not a "federal benefit" in any way. It is a federal mandate that insurance companies continue group coverage for an individual once they have been terminated from employment. The EMPLOYEE is required to pay for the coverage. It also mandates (this is for chelli here) that anyone with a pre-existing condition be permitted to purchase NEW health coverage without an exclusion for that pre-existing condition.

And I got a big laugh out of my only "work" being to marry someone with coverage - HA HA HA. I could sell it to myself and get paid the commission if I wanted to so that's a big fat joke, Jack.

And what are you talking about elminiating the employer exclusion? i don't understand what you mean.

kjm:

COBRA itself is a federally mandated benefit with or without subsidies.

It is a federal mandate that insurance companies continue group coverage for an individual once they have been terminated from employment.

THAT'S A @!$%#ING BENEFIT. Drag yourself into the individual market and try applying for insurance and see whether a) They even give it to you, or b) IF they give it to you at the group rates you previously paid.

I did not say that was your only work. I said you only got that coverage because you're married to a Union Steelworker.

Well, I happy for ya, but I don't have that option.

jack - you were talking about SUBSIDIES. Now suddenly you're saying "with or without subsidies". Duh...

kjm:

I was talking about numerous things, one of which was subsidies. Another of which was the employer exclusion. Have you wiki-ed that up yet?

Employers should NOT be subject to taxes on benefits. Oh, and group health insurance is generally MUCH more expensive than individual coverage - especially if you are in an occupation which includes manual labor, and it is based on medical underwriting of the ENTIRE GROUP as well as their ages.

If folks actually think insurance companies are to blame for the astronomical rise in the cost of delivery of health care services, they are uninformed or choosing to bark loudly up the wrong tree.

kjmgirl,

Chelli: I NEVER found the plan "worth it". I always thought it was a big waste of money and YES, I blame the union. How in the hell can I blame the insurance company? do you blame GM that your Cadillac is $50000 when you only needed a $20000 Chevy? And you really need to do some investigation on insurance companies. They deny approx 5% of claims - usually for things like double filing of claims, claims filed with the wrong carrier or coverage was not included under the policy. The insurance companies are "sucking us dry" because they are REQUIRED to put money aside for FUTURE claims without even knowing how much those claims would be

I understand what you are saying, and quite honestly I have a little personal experience with the insurance industry, as a whole. I may not be the sharpest crayon in the box on Newsvine, especially for linking sources that are supposed to be bookmarked on my computer, but I do have experience with union, non-union, COBRA, private, and public insurance. I appreciate what that union insurance can do for you over the others. Yes, I'm not 25 and bullet proof any more. I know people that have lost their homes over health issues of children or themselves. You will think I'm responding emotionally, and you may be right, but experience is usually the best teacher.

First, you may not have found the union plan to be worth it--however, enough members of the union did to vote it in and keep it. I guess, like anything, if you don't like it--work to change it, or find a non-union job with cheaper benefits. I'm sure you have probably done that. My only point is that it is the actual union members that choose these plans, do so, because the majority find them to be important. Sometimes people forget that "Unions" are actually comprised of individual workers. Most of the time, these great plans come in lieu of pay raises and other benefits.

As far as insurance companies being the great last hope that never deny coverage. I've had some experience with that, too. Always use approved doctors, locations--yet in 5 short years have found that they aren't really forthcoming with what,where, why and how things should be done. Have had 2 "pre-approved" things denied. The third time, I researched what loopholes could be possible. I called to get pre-approval for hubby's colonoscopy. They said you don't need it. I said, well, what if they find something..pause...well, the removal of a polyp or anything else would not be covered because it is surgical. Remember that--because the doctor will not consider it, unless you instruct them not to do anything other than the original procedure without insurance approval. Now, that will mean a second procedure which won't be approved and will cost you around $3500 because it will be within a few weeks or months of your last one. Now, I truly believe that doctors should be allowed to do their job appropriately without having to know every last insurance company's quirks, and patients should be allowed to take the advice of their doctors. Who is it that's getting in the middle, again? Oh wait, that would be the insurance companies.

Most of that last paragraph was more for Rob, but this one is essentially for Rob. I did payment reconciliations for Pharmaceuticals for 5 years. First, you are lucky if they pay within 3 months of the claim. Commonly, it is 6-9 months. It's easy to see where multiple claims had been made. What's not so easy, is that if, within that large span of time, the person loses coverage, the insurance companies refuse to pay. The pharmacies have little recourse as the insurance companies can yank all of their business from their particular company. This causes the prices to rise dramatically to cover the losses. In one instance, we had a $1300/month prescription that was won by lottery, and the patient died. The company refused to pay it after 6 months had passed, and if we didn't accept that, we would lose all business from participants in that plan...it happened to be largely used in that state, and throughout the company in 7 states. Sooo, the prices of your antibiotics and common prescriptions doubled to make up for the loss. I realize I am only speaking of pharma, but I cannot believe in my heart of hearts that it doesn't happen accross the realm of health care. This was in the 90's. I'm pretty sure it's much worse now. Those insurers are angels, their primary goal is to make a profit--that profit could be used to give more patients essential, basic care. This is not to mention, why can we afford to pay thousands of people to answer phones and deny or give authorization for medical care, and not to simply give it at a much lower price? These insurance jobs are nothing more than a leech on health care--with one exception--catastrophic care.

First, you are lucky if they pay within 3 months of the claim.

We pay claims within days of the services being rendered - not the claim being received, within days of the services being rendered. This has been very common of all of the payors I have worked with. It's an electronic world, and most claims flow through the company without human intervention. They basically auto-pay...the sheer volume of claims would overwhelm any payor in this day and age. My current customer is one of the largest commercial insurers in the country. I'd say your experiences are not the norm in the industry as a whole....and that's based on working around and in healthcare insurance companies since the late-1990s. If your payor paid that slow, you're simply working with the wrong organization (maybe they were the cheapest?). Period. End of Story.

And to the other paragraph - caveat emptor. If I bought a car that the brochure said would go 48mph in first gear, and it only went 42, something would be wrong. I'd fight for it to be made right.

I've had a payor deny my throat culture (because I didn't present with the right diagnosis), yet cover the meds for my strep throat (which I had). Turned out to be a coding error on the claim - damned humans involved in the process yet again...sigh...lol. If I wanted to view it as a conspiracy against me and play the victim, I probably could have, and could still be harboring resentment to this day. I just made a phone call and they made it right.

One of the things they have to be on guard for - is a tendency for physicians to acquire stuff...and then need/want to use it. That physician that just took out a second on his condo in Aspen so he could afford the down payment on the MRI machine they're putting in his newly expanded practice - well, he's gonna want to use it. That's one factor. The sheer volume of fraud being committed out there is another.

The cost of delivering health care services in this country is out of control. Picking one box on the big puzzle that buys and pays for those services - a box making 7.5%-10% profits when they are even for-profit companies - that's just not going to fix the problem.

We could legislate every health care insurance company out of business tomorrow - guess what? The cost of delivering health care services in this country would still be out of control.

Chelli - yes, the unions DID approve the plan. Why? Because most Americans ALWAYS think that more is better - as long as they dont' have to pay for it. And THAT is one of the major problems with the whole cost of health insurance AND health care today.

peace

kjm:

Grrrrrrrrrrrrrrrrr.

Why? Because most Americans ALWAYS think that more is better - as long as they dont' have to pay for it. And THAT is one of the major problems with the whole cost of health insurance AND health care today.

So why not make sure they pay for it and know it by taxing it?

If you don't like eliminating the employer exclusion (which is dumb because the exclusion incentivizes companies to provide compensation in the form of health insurance) by taxing it on the provider side, how about taxing it as compensation on the beneficiary's side?

come on jack, you know my stand. NO corporate income tax. And why should the middle class be taxed on their health insurance when the schmucks will be PAYING for free benefits for the "poor?"

kjm:

There ya go again.

All your "principle" is all just "I got mine" greed.

The system is @!$%#ed up. You admit it's @!$%#ed up and you even identified one of the key reasons it's @!$%#ed up, namely, the illusion that health care is "free" because there's no sense of the true cost because of the employer exclusion and the fact that coverage is tax free compensation.

But you don't want to do anything about it because you're one of the winners in a @!$%#ed up system.

The system IS @!$%#ed up. Is it @!$%#ed up because employers give their employees "benefits?" Hell No! It's "@!$%#ed up" because the GOVERNMENT wants to give EVERYBODY the benefits that most people WORK FOR

kjm:

It's @!$%#ed up because of this:

Because most Americans ALWAYS think that more is better - as long as they don't have to pay for it. And THAT is one of the major problems with the whole cost of health insurance AND health care today.

Now, if you don't want to do anything about that, fine. Just stick with the @!$%#ed up system we have and hope you reach your natural end before the system collapses.

the benefits that most people WORK FOR

And you said that about people who work, namely, the beneficiaries of United Steelworkers' plan that your husband's union negotiated. Do Steelworkers not work? Does your husband not work?

Last comment on this article...Rob, I suspected you worked for an insurance company. I have friends that do as well, and their stories don't bode so well for the companies as yours does. Personally, if you are auto paying and paying within days that says a lot--number one--good for paying quickly and efficiently, it's a rarity in the 3 states where I've dealt with it. Number two, as you spoke of, insurance fraud runs rampant, and if their is little to no audit process, well...that is honestly part of the problem. It's always a catch 22 on this topic. The people that have good health care plans want to keep it and denying it to others will help them do that. Those that don't have it are desperate. It is truly a human rights issue that supercedes economic status. Why do people in one of the richest nations in the world have to beg for basic health care? Why are they dying because of their socio-economic standing? It is F-ed up, because the people that have it want to keep it, and that's possibly because they are greedy...JMHO.

My main customers are insurance companies (and telco companies, who have similar very complicated invoicing procecces). I don't actually draw a paycheck from one, but I have worked in and around large payors since the late-1990s.

Why do people in one of the richest nations in the world have to beg for basic health care?

I'd like to understand this question a little more...what is basic, and who is begging for it? My definition of basic is routine, preventative care plus emergency care. We all know that every single person in this country (regardless of nationality) that presents themselves in an emergency room will receive emergency care. Does everyone have a right to a new kidney? To treatment for kidney stones? To an ill-advised ER trip to treat the common cold or influenza because someone didn't take advantage of a flu shot?

We have extensive audits and controls built in to prevent duplicate and/or fradulent claims paying, and also new providers that...cough...won't exist in 60 days from receiving payment for a bunch of claims for questionable services. Medicare unfortunately does not, or those controls that are in place are maturing, or self-defeated by legislated stuff like prompt-pay.

Like I said, my client is one of the biggest. I see their commercials on TV all the time, and I know the numbers are skewed by multiple products and what-not, but they have well over 50M covered lives. That's a pretty large chunk of the commercial insurance industry right there...I certainly can't speak for all segments of the organization, only those I have direct experience with, but experiences like yours I would have to think are the rarity. When any company's paying 50+M claims a month, though, there are certainly going to be a ton of odd anomalies.

Greed plays a part all over this sad story, yes. But again, if it's the greed of one small segment of the health care service delivery network people choose to focus on, they're barking loudly up the wrong tree. I know the CEO of my current client is one of the lowest compensated in the industry, and honestly, I wouldn't change jobs with him in a heartbeat. Overseeing a corporation with 50,000+ employees delivering services to that many covered lives...whew. I know there are problems within some other organizations, but again...this is an industry that has become dozens of times more efficient over the last decade with the advances in technology and legislation that has forced modernization on some segments of the industry. Sure, premiums have gone up at a frightening rate recently - but at the end of the day, these big payors are still sitting at 7-10% profit (when they are for-profit at all). If it's not going into the stockholder's pockets, it's gotta be going somewhere.

The largest single line item in the budget for every single payor out there is payments to providers. Guaranteed. Every time. It's always well over 50-70% (and in many cases - 80-90%) of the premium dollars received.

We can crucify the payors and legislate their 7-10% profit out of existence by bringing about single-payor - but guess what, we've still done nothing whatsoever about the majority of the expense.

The cost of delivering health care services in this country remains out of control.