Healthcare Reform, Premiums, and Affordability Credits

[WhiskeyGirl]

How are premiums going to be determined?   I didn't see anything clear on this.

I did see a few things relating to the 'affordability' credits for lower wage earners.  I would imagine the affordability credits would related 'apples to apples' to the premium structure.   That is just common sense.

Here are the problems from my perspective.

Who determines the premium structure?

As an example, in the private world of insurance, individual policies, they may charge by adult and children.  Premiums are related to family structure.  If there are more people in the family they need to charge more - nothing is free.  If a family has one child and one adult, they pay less than a family with two adults and ten children.

In group insurance, I've see a few different rate structures, sometimes companies subsidize the family rate a little more than the single rate.  Other times, here are rates for adult, adult plus one, and family. 

Why are the affordability credits for a single person and a family?  If you choose to have a spouse and/or one or many children, should you pay more?

What is a family under Obamacare? 

Would a married or unmarried couple pay two single rates?   Or, would they qualify as a 'family'?

If the affordability credit for a single is $8,000, and for families $12,000, are singles paying the lions share of costs/premiums?

If the affordability credit is $8,000, what is the expected premium for a single?  $10,000 per year?

What if that single could get high quality coverage for say $150 a month today?  $1,800 per year?  New government RIP-OFF?

What if the COBRA for one older person is just $350 per month today?  New government RIP-OFF?

Are singles bearing the burden of premiums? 

Many unknowns...

[WhiskeyGirl]

As a comparison, the Wisconsin insurance pool for HIGH risk individuals comes to mind.

website here - www.hirsp.org

In order to qualify for this pool, one has to be rejected by two insurance companies, or meet a few other guidelines.  Most folks don't think this is cheap insurance.

From the 2008 Annual Report - http://www.hirsp.org/pdfs/annual_2008.pdf 

Avg. cost per HIRSP policy in 2008  $9,880 (the cost in 2007 $10,006)
Total avg. annual premium per HIRSP policyholder  $5,593

Avg. policyholder premium as percent of avg. policyholder costs  56.6%

The report also has a section on rejection letters, necessary to qualify.

D. Letter of Medical Eligibility 1,393

1. Letter of Rejection By:

Alliance 9
American Community Mutual Insurance 74
American Heritage 19
American Family 263
American Medical Security Group 18
American National Life Insurance Company of Texas 8
American Republic 20
Assurant Health 281
Atrium Health 3
Blue Cross & Blue Shield United of Wisconsin 717
Celtic Life Insurance Company 24
Central Reserve Life 1
Consumer Life Insurance 22
Continental General Insurance Company 2
Dean Health Plan 90
Golden Rule Insurance Company 236
Great West Healthcare 3
Group Health Cooperative 10
Humana Insurance Company 378
Insurers Administrative Corporation 1
John Alden Life Insurance 8
Mega Life And Health Insurance 64
Mid-West National Life Insurance Company of 4
Pekin Life Insurance 31
Physicians Mutual Insurance Company 5
Physicians Plus Insurance 3
Security Health Plan 95
Sisco 1
Trustmark 7
United HealthCare Insurance 3
Unity Health Plan 19
Valley Health Plan 5
Wisconsin Physicians Service Insurance 283
World Insurance 7

2. Notice of Benefit Reduction or premium increase 13

I would imagine that if there are more than 30 companies on the list sending rejection letters, Wisconsin must have a 'robust' private health insurance market. 

In some states, I've read they have just one or no companies that offer private policies.  Why is that?  From what I've read, it may be due to state regulations, community rating, unisex rates, all of which make insurance for EVERYONE unaffordable.

Just 13 letter due to benefit reduction or premium increase.

"The average age of HIRSP policyholders has increased slightly in 2008 from just under
51 to just under 52 years of age."

There are lots of goodies in this report and at the site.

These are high risk folks, people with lots of pre-existing conditions and claims.

How is it that HIRSP costs an average of $9,880 in 2008 for a sick/unhealthy/risky person and Obama care will cost say at least $8,000 for the general risk person?  

Where are the large nunber savings?  Where is the competition?

Something skewed here?  Numbers make sense to anyone?

If the 'affordability credit' is $8,000, how much is the premium?

There are premium and deductible discounts based on income, and drug out of pocket maximums.  Everyone has to contribute something for their care.

Also, the "Financial and Policyholder Activity Report" for August 2009 is online for public inspection.  Wow...

Nobody seems to know where the Federal tax dollar is spent, no transparency at the Federal Reserve...   

jmho