Over time, conforming and non-conforming insurance policies sold entirely outside the exchanges could look increasingly attractive to consumers; even accounting for the subsidies many people would get for staying inside the exchanges. Health plans would be encouraged to drop out of the exchanges, or in the case of national insurers like Aetna [NYSE:AET] and United Healthcare [NYSE:UNH] and Cigna [NYSE:CI] (who have largely stayed out of these schemes) decide not to get in. For these insurers, their decision to stay out of the exchanges is looking smart. The risk adjustment only reduces, but doesn’t eliminate the loss that insurers would take if the exchanges attract older, sicker consumers this year. The potential woes stem from an oversight made by the architects of Obamacare. Under the law, insurers who offer policies inside the Obamacare exchanges are required to treat their enrollees inside and outside the exchange as a single risk pool. Among other things, this provision was meant to reduce the chance that insurers would steer healthier patients into plans sold outside the exchanges. But the law doesn’t prevent insurers from offering plans exclusively outside the exchange. If they are entirely outside the exchange, they get to create their own risk pool, and aren’t subject to the same pricing that burdens plans inside the exchange. (See this Commonwealth Fund Brief for a fuller explanation) { commonwealthfund.org/Publications/Issue-Briefs/2011/May/Risk-Adjustment-Under-the-ACA.aspx } As the pool inside the exchange becomes older, sicker, and costlier, more plans will have an economic incentive to get out of the Obamacare market altogether. Once outside, they are free to price their products to match a better risk pool. Other provisions will further encourage plans to drop out. While an insurer inside the exchange is required to offer (at least) one silver plan and one gold plan, outside the exchange there’s no such requirement. So an insurer could offer only the lowest cost “bronze” options outside the exchange, to attract healthier members. Since they are outside the exchange risk pool, they could price these low cost plans to their healthier pool, rather than being required to price the plans to match the less healthy risk pool inside the exchanges. Moreover, inside the exchanges, cost-sharing subsidies that reduce co-payments for lower-income beneficiaries, only attach to “silver” plans. This is another way in which the “bronze” plans sold entirely outside these exchanges could look attractive (even for low income individuals) to comparable plans sold in the exchanges. While consumers wouldn’t have the benefit of subsidies outside the exchange, it’s possible that for younger individuals, the plans sold entirely outside the costlier exchange-based risk pools could be more attractive than plans sold inside these markets. Even for those who make less than 400% of the federal poverty level (about $40,000 for a single person) and benefit from the subsidies, the risk pools completely outside the exchange could offer comparable, if not cheaper options. In other words if youre not 50+ or dying you need not to enroll in health insurance... no younger crowds=no Obamacare PLEASE pass this on EVERYONE needs to know how to stop this nonsense
Posted on: Thu, 31 Oct 2013 02:26:56 +0000
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