Did you catch Dennis speaking with health insurance expert Denny Weinberg? Heres what he has to say about Obamacare. Mr. Weinberg read the entire bill. Jennifer DP FB Team Conversations on Health Insurance Denny Weinberg 11/5, 5:11pm I ran the largest Individual health Insurance plan for 20 years. I presided over the sale of over 5 Mill policies during that time which we recognized as the great renaissance of the Individual Marketplace. I retired when I saw what was brewing in DC and the States bobbing and weaving to best position themselves for the political implications. That best political position has no bearding on what makes a real market work in either the short or long term. Sure, we understood that the realities for stable insurance market did not make us the most popular industry for Americans. On the other hand, politicians trying to get re-elected over the overhaul of a business as complex as the Individual Insurance market with no experience was destined to blow up badly. I have read the entire 2,000 pages of minutia that is ObamaCare. Bottom Line: The Media/Public have no idea how bad ACA will be we fully digested (or regurgitated) by America . We are only seeing the tip of the iceberg thus far. Here is what is coming: 1) Web problems will probably get fixed pretty quickly. Just a current view of how badly even simple things can be done by a massive federal government bureaucracy with no real world skills. 2) Unfortunately, all who experienced the private Individual Insurance Market dynamics over the years know that the first year Individual purchasers will be vastly more health-care-needy than expected (not so much young or old, but sick vs healthy) 3) Young people likely will NOT buy in this new market because prices of policies for their ages have been radically increased due to the 3:1 rating-by-age limitation. The young were very difficult to motivate when the private market targeted them with very low cost policies designed specifically for their purchase dynamics. Forget that now; this program assumes them to be a perfect fit for a one size-fits all plan regardless of age or life cycle dynamics at a price vastly higher than the targeted pricing previously with well studied purchase dynamic understanding. On the other hand, people over age 50 will see this as a bargain, since they get a huge rate reduction with enhanced coverages, as though that were somehow viable. Longer term, this set of dynamics is a road-map to disaster. 4) Most who enroll in the exchange marketplace will be lower income, either gobbling up subsidies in the limited individual market or opting into the radically expanded Medicaid program where there are no premiums and practically no out of pocket costs. 5) The overall ACA financial model will be proven wrong and the long term outcome financially - a mess and will require out year changes or new sources of subsidies 6) Small employers that have lower-income-employees will drop previous group coverages in huge numbers and send their employees to individual exchanges to get their share of subsidies. No Mandate in those sized employers, The disastrous implications, the Fed will take over what was previously Employer subsidies, willingly paid by those employers all these years. This will contributed to the adverse financial outcome for taxpayers. 7) Many of those employers who choose to keep group coverage will renew for 2014 by December (rather than January), a trick to maintain their Pre-ACA structures for another year. Will contribute to the adverse financial outcome for taxpayers. Many brokers and agents will suffer overwhelming business losses and many some will loose their careers over the shift to inexperienced Navigators. Navigators will be at the center of controversy, errors, omissions, and abuses. 9) The over-$10 Bil reserved for risk adjustment provisions (to help subsidize insurers losses due to adverse selection) will be controversial and highly debated and become the center of accusations, and industry bashing in light of the other failures of the program 10) There will be little real progress on restructuring of the Hospital/Physician structures (ACOs - Medical Homes) or movement from Fee for Service to Paying for outcomes. Changes in the structure are required to bend the cost curve, a promised value of the ACA. 11) As we move into the second half of the year, Insurers will start to get a glimps of who they are covering and in what part of the structure. They will all be disappointed and will radically change their strategies for how to participate (or not) in 2015. This is all just year one - but Jan 15th will prove to be an even more messy open enrollment than year one, with vastly higher prices and fewer participants. What a mess! Denny Weinberg Co-Founder of WellPoint Retired 20 year CEO of The Consumer Marketplace
Posted on: Thu, 07 Nov 2013 03:54:25 +0000
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