Sunday, October 27, 2013

Didn't they promise lower costs?

Ross Douthat writes in the New York Times that Americans will soon be able to get "a real look at what Obamacare is selling them."

What will they find? One way to understand what is being offered is to think in terms of three “mores.” Insurance à la Obamacare will be more expensive, more subsidized and more comprehensive than what was previously available on the individual market.

Well, proof of the first aspect has landed at my home here in Massachusetts.  Here's a chart comparing the Blue Cross plan I have been able to purchase under the rules of the Massachusetts Connector to the one I will be able to be able to purchase under the rules of the Affordable Care Act.

To summarize, for $600 more per month, my co-pay for almost everything goes up. My share of an inpatient admission or outpatient surgery goes up 233%; a CT or MRI goes up 500%; and ED visits are double the cost.

Now, I do get the benefit of an out-of-pocket maximum of $3000.  But I will pay $7200 extra for that protection. To break even, I would have had to spend $10,200 in out-of-pocket items under the Massachusetts plan.

I know I could downgrade to a lower level of insurance and reduce my monthly premiums, but then other items would also change in price and availability.  This is the plan that best meets our needs.

Douthat noticed the same pattern in his home state of Connecticut. "There the 'more expensive' part of the new regime is readily apparent."  He believes that the higher rates are "because insurance companies now have to take customers with pre-existing conditions, which drives everyone’s rates up. But they also bite because buyers are getting more insurance than the older system’s cheapest plans offered."

Not so here in Massachusetts, where pre-exisiting condition exclusions have been outlawed for years and where--as you see--we are not getting more insurance than the older system.

I think the explanation for this uptick in cost in Massachusetts has to do with the group and individual definitions and rating factors that BCBS has to use under the ACA, so I'm not blaming them.  And actually, their premium plan is less expensive than those offered by other insurers in Massachusetts, so some competition seems to exist.

I'm also happy to pay my fair share.  In particular, I have no problem at all with having my tax money used to help subsidize those who can not afford insurance.

But, jeez, couldn't you have kept my monthly premium rate increase to something less than 40%?


Medical Quack said...

This is very sad and actually I began talking about the possibility of Sebelius resigning with dignity about a year ago while dignity was still there and back in 2009 I also said Health IT would eat her up and please put "smart" people in to head these IT Intense agencies and not personal as SEC and DOJ have the same problem.. Figure heads don't work anymore and are no match for the extreme math models and subsequent executing algorithms built by insurers. It's very difficult today to work with and make sense out of the complex models of insurers and they are in this game as well.

This is really coming to a head and there's also plenty of room on the other side for lawmakers to get educated and we need to restore the non partisan Office of Technology Assessment that used to be there and in times of record data complexities it is needed now more than ever and if we educate the Congress they might even get along again I don't see substantial modeling used here either, enough digital illiteracy for all with not understanding how all laws and rules have IT infrastructures attached. Let's watch some more algorithms play out, ok?

There's plenty of "laughing stock" to go around for everyone so get the popcorn out and see what Thursday brings and I feel sorry for Tavenner too at CMS as she's a victim of all of this as she too does not have the IT tech background needed to be the head integrator or contractor if you will for the exchange website. She will probably try to answer questions and on Thursday I am guessing we might see a continuation of the "canned" "throw numbers at them" responses from Sebelius..this is really sad.

One thing for sure is that both government and consumers are learning one hard cold reality about how complex IT Infrastructures really work...all in the math models that run on servers 24/7 making life impacting decisions about all of us and insurers like complexity as it rolls out to be profits for them. Again I don't see a "modeled" plan here from the GOP either.

A couple years ago I said having the use of IBMWatson or something equivalent would really help Congress models their laws as both the House and Senate could query and get all the information they need, and all have the same numbers from the start. With speech recognition, even the lowest common denominator with tech skills that we would elect could participate. You will never find all the "unintentional consequences" ahead of time but this would find quite of them before they act and we suffer the consequences of "bad models"..math or otherwise. Have you noticed that Citibank is using Watson to turn profits and also the cancer research this is coming to the surface in a good way with queries on what's out there? Why not use it for lawmaking?

Massachusetts probably does a better job than most with numbers but again how the algorithmic formulas play out, we really don't know all of it, and thus the importance of modeling comes in. You have to admit we have a lot of data coming together here and if you look at the classified, insurers have tons of ads to hire more Quants and data miners, so they are working extreme models and have been for years, so yes a lot of this is hard to make sense out of for sure.

Barry Carol said...

Paul --

I thought Massachusetts only has 2%-3% of its population still uninsured following the implementation of Romneycare. Who are they and how many are young and healthy? Can Obamacare work under these circumstances? Also, can you keep your existing health plan with no out-of-pocket maximum or would it be considered unqualified under the ACA’s coverage rules?

Paul Levy said...

I don't know the first answer, Barry.

I thought the annual maximum was a requirement for all ACA plans. Perhaps others can answer.

Anonymous said...

@Barry: All current plans being offered under the MA health exchange will end on March 2014. Health connector subscribers will need to purchase a new plan before the end of that month.

T said...

Very frightening. Unaffordable Health Care.

Jon said...

I am curious what factors drive your premium up. What requirements does the aca add that Massachusetts did not have? Is it just the I the insurer charging more in its offer letter hoping you accept?