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So many lies and distortions have been spread about the health insurance policies and premiums after the exchanges become effective come next january. Here are some facts and a reality check for those still in the dark or confused.
- Those who will be required to get health insurance through the exchanges are only a small segment of the population. Currently less than 10% of Americans under age 65 are insured through an individually underwritten health insurance policy. The precentage of Americans under age 65 who are uninsured is about 20%. Most of those uninsued will be covered through the Medicaid expansion so the percentage of all Americans who will get their health insurance through the exchanges is projected to be no more than 15% of the population
- Most Americans under age 65 will still get their health insurance through their employer. Currently the number of Americans under age 65 who are covered on employer based health insurance is about 55%. But that percentage is shrinking.
- Costs for employer health insurance will be based on the same factors that are presently being used; the overall experience of the group. This is known in insurance circles as experience rating. Therefore if health insurance premiums increase for employer plans; it is not due to Obamacare but to unfavorable claims costs. The major driver in premiums is utilization which is why many employer plans are converting to high deductible plans to control utilization.
- Premiums for health insurance policies purchased through the exchanges will be community rated, not experience rated. This is an old fashioned rating system that was commonly used by Blue Cross plans until the late 1980s. It is based on the overall cost of health care in a particular community or geographic region (a set of zip codes, counties, regions or an entire state). This is a much more stable rating system than experience rating which all private health insurance companies have been using since the mid 1980s.
- Health insurance policies that will be offered through the exchanges will be based on the basic level plan known as the "bronze" plan. Other plans will be available with additional benefits (like dental and vision) as well as some other extras and will be known as "silver", "gold" and "platinum" level plans.
- It is expected that most people who will be purchasing their health insurance through the exchanges will be eligible for a premium subsidy. The premium subsidy will be available to individuals and families whose income is between 138% and 400% of the federal poverty level. The premium subsidy is set so that the base cost of a "bronze level" policy through the exchanges will cost no more than 8% of that individual's or family's adjusted gross income.
- It is expected that most of the people whose incomes exceed the limit for a premium subsidy will utilize high deductible plans with an accompanying health savings account (which might reduce income enough to qualify for a subsidy) which would lower health insurance premiums.
- Health insurance premiums under the exchanges can only have a three to one spread between the oldest age group (age 60 to 64) and the youngest age group. This will keep premiums lower for older people, but increase premiums for the younger people who get their health insurance through the exchanges. But younger adults who use the exchanges are more likely to be eligible for a premium subsidy keeping their health insurance costs no more than 8% of their AGI.
Will there be problems when the exchanges come on line this October? Of course there will be as many people may find navigating the exchanges confusing. There are people being trained as "navigators" to assist those who will be using the exchanges as well as applying for the premium subsidies for policies purchased through the exchanges. However once the bugs are worked out, the exchanges are expected to be operating smoothly by mid year.
The major problem with the exchanges and health insurance under the ACA is the large amount of misinformation, outright lies and bovine feces that has been spread by the right wing in a desperate attempt to confuse and mislead the public. How smooth those exchanges actually operate will depend on how well they are communicated to the people. In some states where they are establishing their own exchanges, the states are gearing up a massive communication program to make those exchanges work.
But in many other states (usually controlled by Republicans), there is no attempt to communicate the exchanges to the residents of those states or any cooperation with the exchanges. States like Ohio which has chosen to defer to the federal government to operate their exchange are only minimally communicating the exchanges while allowing the federal goevrnment do most of the communications about the exchanges. Other states like Texas, where governor Rick Perry has said that he will not cooperate with the communicaiton about the exchanges one bit will just leave all communication up to the federal government.
Therefore compliance with the mandate to become insured and the number and precentage of uninsured will vary considerably among the different states. In states that establish their own exchanges and go along with the Medicaid expansion; it is expected that the number of uninsured will drop considerably and most people will be insured. In those states that are refusing to go along with the Medicaid expansion and refusing to cooperate with communicating the echanges, their number and percentage of uninsured residents will increase.
The large unknown in health insurance premiums under the exchanges is "adverse selection". That is insurance speak for more sick people taking advantage of the exchanges than healthy people. In order for the exchanges to work under community rating, everyone must be covered with no company getting a disproportionate share of the sicker or older population. My belief is that in those states that refuse to go along with the Medicaid expansion and refuse to communicate the exchanges or cooperate with the exchanges will see a much higher degree of adverse selection than those states that go along with the Medicaid expansion and do a better job of connumicating the exchanges to their residents.
Therefore I expect that in those non cooperating states (like Texas and Mississippi); health insurance premiums will increase dramatically over those cooperating states. For the exchanges to work and premiums to be kept stable and affordable, there has to be enough of the young and healthy getting insured to balance out the unhealthy risks. As we all should know, one's health can change in an instant.
Posted by golfinsailor
I am trying to find out more about the navigators, That is a job that I could do and excel, being bi lingual should help also. any ideas.?