STUMP » Articles » Obamacare Watch: 5 Feb 2014 — Are You Ready for Even More Expensive, Required Plans? » 5 February 2014, 14:52

Where Stu & MP spout off about everything.

Obamacare Watch: 5 Feb 2014 — Are You Ready for Even More Expensive, Required Plans?  


5 February 2014, 14:52

Lots of people find exchange plans too expensive to begin with. Let’s require them to be even more expensive!

(Bloomberg) — Insurers participating in Obamacare may have to expand their plans to include more federally funded health clinics, safety-net hospitals and other medical providers used by low-income people, under a U.S. proposal.

Health plans offered through government-run insurance exchanges may be required to cover 30 percent of “essential community providers” in each county in 2015, an increase from 20 percent this year, according to a document obtained by Bloomberg News. The proposal will be outlined today in a letter to insurers from the Health and Human Services Department. …..
More than two-thirds of health plans on exchanges have assembled provider networks considered “narrow” or “ultra- narrow,” in which as many as 70 percent of hospitals and other local health providers aren’t included, according to a December study by the consulting firm McKinsey & Co.

Narrow networks allow insurers to negotiate lower prices with hospitals and doctors, which can be passed on to consumers in the form of lower monthly premiums. The insurance industry argues the practice also allows them to more closely manage the care of their patients, benefiting their health.

Exchange plans with broad networks of hospitals carry premiums 26 percent higher, on average, than similar plans from the same carriers with narrow networks, according to the McKinsey study.

Of course, some insurers, if required to boost the networks, will want to boost the premiums.

And some of those increases will be disallowed. Here is an example from last year:

Aetna has withdrawn its proposal to participate in Connecticut’s health insurance exchange, becoming the second carrier in recent weeks to exit the new marketplace.

The Hartford-based insurer indicated it did not believe the price modifications requested by state regulators would allow it to bring in enough money in premiums.

“We have spent considerable time identifying those states in which we can be competitive and add the most value to the market,” Aetna spokeswoman Susan Millerick said in a statement Monday. “As a result of our analysis, we have reluctantly concluded that we will withdraw our Individual Exchange filings in Connecticut for 2014.”

“Unfortunately, we believe the modifications to the rates filed by Aetna will not allow us to collect enough premiums to cover the cost of the plans and meet the service expectations of our customers,” Millerick said. …..

Aetna assumed that the health of the people covered by its plans through the exchange would be dramatically worse than what the other companies projected. Aetna’s calculation of how the health of the new customers would affect costs was 10 times greater than what Anthem projected, according to Wakely.

The company also included an 8.1 percent “durational adjustment” in its rate proposal, which Wakely’s analysis said was described as intended to affect the percentage of premium costs spent on medical care. Lombardo, the insurance department’s actuary, asked Aetna to remove it, saying the department wasn’t permitting that sort of adjustment in the first year of pricing for the exchange plans.

Unlike the other carriers, Aetna also included in its rate proposals an assumption that the newly insured would use more medical services to make up for years of going without care.

In addition, Aetna’s rate projections assumed that health care spending would rise by 10 percent, which the Wakely report said was at the top of the range used in rate filings for the individual market. And Wakely noted that it was higher than national projections about health care spending increases, which range from 2.8 percent to 7.9 percent. That projection in Aetna’s filing was one of the ones that Lombardo asked the company to reduce.


Under the exchange’s rules, Aetna would have to wait until 2016 to sell plans through Access Health.

By increasing the requirements to be an exchange insurer, I am very willing to predict more and more insurers will withdraw from Obamacare.

That’s a really easy prediction.


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