Huge health insurance rate increases in store for 2016

[untermensche]

In 2014, the division found claims costs exceeded premium revenue by $127 million for carriers, or an average of $624 per person.

I'm not an insurance company expert, but I imagine it's hard to cover your overhead let alone make profit if your claims costs alone significantly exceed your revenue.

You do know what a "division of a company" is?

In this case it is a fiction used to lower taxes on the corporation overall.

 

[Alcoholic Actuary]

Do we get this a lot?

Oregon Insurance Division poised to approve 2016 rate hikes

Preliminary decisions even increase rates for six carriers

The dramatic, double-digit rate increases Oregon’s health insurers proposed for 2016 are very likely to become reality, according to preliminary decisions released Thursday by the Oregon Insurance Division.

The division, which assesses carriers’ rate proposals and moves them up or down in accordance with a number of factors, says it not only agrees with most of the rate increases insurers want to see on the individual market — it believes many don’t go far enough.

For six carriers, the division wants to bump rates even higher than what was originally proposed at the end of April.

Customers buying policies on the individual market in 2016 can expect to pay an average of 38.5 percent more for a LifeWise policy, 37.8 percent more for a Health Republic policy, 37.1 percent more for a PacificSource Health Plans policy and 25.6 percent more for a Moda policy.

Laura Cali, Oregon’s insurance commissioner, said the increases are necessary to ensure carriers make enough money from premiums to pay claims. In 2014, the division found claims costs exceeded premium revenue by $127 million for carriers, or an average of $624 per person.

Judging by first-quarter data from this year, Cali said, the division believes costs will again exceed premium revenue.

“Our rate review is not always about bringing rates down; it’s about making sure that they’re adequate,” she said, “and so sometimes it does result in us proposing increased rates.”

Some of the greedy and evil insurance companies forgot to ask for enough money so the steadfast and noble insurance commissioner forced them to go with higher rates.

http://www.bendbulletin.com/home/3263747-151/oregon-insurance-division-poised-to-approve-2016-rate#

That applies to roughly 4m Oregonians. What about the other 317m of us?

Here is some evidence that suggests rate increases will probably be under 4% on average nationwide:

http://www.pwc.com/us/en/health-industries/health-research-institute/aca-state-exchanges.jhtml

aa

 

[Jimmy Higgins]

I am 18 months a way from getting Medicare.Hope the Repugs don't fuck that up!

Any major modification will be designed to screw the fuck over my generation, not yours.

A preemptive FUCK YOU! to the Republicans for that.

 

[Jimmy Higgins]

The US is regularly described over here as having two parties, a right wing party and a very right wing party.

Based on what criteria?

Probably decent acceptance of what is conservative and what is liberal. The Democrats are relatively fiscally conservative these days (discretionary spending under Obama has come to a relative halt) and very liberal. The Republicans are just a partisan Wagstaff party that really don't even have a political platform anymore.

 

[dismal]

In 2014, the division found claims costs exceeded premium revenue by $127 million for carriers, or an average of $624 per person.

I'm not an insurance company expert, but I imagine it's hard to cover your overhead let alone make profit if your claims costs alone significantly exceed your revenue.

You do know what a "division of a company" is?

Yes, but that's not important now.

In this case it's rather clear from the article what is being referred to is the Oregon Insurance Division.

Which I believe is one of the more competitive divisions in Oregon slow pitch softball.

- - - Updated - - -

That applies to roughly 4m Oregonians. What about the other 317m of us?

They get sent the bill?

 

[Alcoholic Actuary]

That applies to roughly 4m Oregonians. What about the other 317m of us?

They get sent the bill?

Well since Oregon is getting approved for rate increases over and above what companies are asking for, I would say the rest of us have been getting part of the bill for Oregon for quite some time. Hopefully this rate action by the Oregon Insurance Commissioner helps rectify that.

aa

 

[jonatha]

I have a sufficiently high regard for dismal that I expect he will realize arguing with aa about the way insurance plumbing works is unwise.

 

[dismal]

I have a sufficiently high regard for dismal that I expect he will realize arguing with aa about the way insurance plumbing works is unwise.

Actually what he said makes no sense at all. I just didn't feel like bothering with it in light of the goal posts moving so quickly.

The move by the Oregon Insurance commissioner will increase prices more, meaning in the future insurance company stock holders will absorb less of this cost and insurance customers and the taxpayers who subsidize them will get handed a bigger share of the medical bills. I am ignoring for the moment that the taxpayers may also be on the hook to bail out insurance company losses.

 

[KeepTalking]

I have a sufficiently high regard for dismal that I expect he will realize arguing with aa about the way insurance plumbing works is unwise.

Actually what he said makes no sense at all. I just didn't feel like bothering with it in light of the goal posts moving so quickly.

The move by the Oregon Insurance commissioner will increase prices more, meaning in the future insurance company stock holders will absorb less of this cost and insurance customers and the taxpayers who subsidize them will get handed a bigger share of the medical bills. I am ignoring for the moment that the taxpayers may also be on the hook to bail out insurance company losses.

I agree with dismal, we need true universal health care ASAP.

 

[Alcoholic Actuary]

I have a sufficiently high regard for dismal that I expect he will realize arguing with aa about the way insurance plumbing works is unwise.

Actually what he said makes no sense at all. I just didn't feel like bothering with it in light of the goal posts moving so quickly.

The move by the Oregon Insurance commissioner will increase prices more, meaning in the future insurance company stock holders will absorb less of this cost and insurance customers and the taxpayers who subsidize them will get handed a bigger share of the medical bills.

No.

Actually what you are saying makes no sense. If a company cannot get rate in a particular state, they will try to get it wherever else they can. This rate pressure continues everywhere until companies start pulling out of the affected state (which also requires commissioner approval but is usually easier than achieving rate increases). Sooner or later a state commissioner will be compelled to act to approve rate increases to an appropriate level or risk having the entire insurance market in their state collapse.

Why would any stock holder give more than zero fucks how 1 single state is performing wrt the entire portfolio?

aa

 

[dismal]

Actually what he said makes no sense at all. I just didn't feel like bothering with it in light of the goal posts moving so quickly.

The move by the Oregon Insurance commissioner will increase prices more, meaning in the future insurance company stock holders will absorb less of this cost and insurance customers and the taxpayers who subsidize them will get handed a bigger share of the medical bills.

No.

Actually what you are saying makes no sense. If a company cannot get rate in a particular state, they will try to get it wherever else they can. This rate pressure continues everywhere until companies start pulling out of the affected state (which also requires commissioner approval but is usually easier than achieving rate increases). Sooner or later a state commissioner will be compelled to act to approve rate increases to an appropriate level or risk having the entire insurance market in their state collapse.

Why would any stock holder give more than zero fucks how 1 single state is performing wrt the entire portfolio?

aa

The article says insurers in Oregon paid $600+ more in claims than they collected in premiums per insured customer in 2014. Whose pocket does that $600 come from?

After seeing this insurance commissioner approves rate increase of $600+profit +overhead. Whose pocket does that $600+profit+overhead come from?

 

[Alcoholic Actuary]

No.

Actually what you are saying makes no sense. If a company cannot get rate in a particular state, they will try to get it wherever else they can. This rate pressure continues everywhere until companies start pulling out of the affected state (which also requires commissioner approval but is usually easier than achieving rate increases). Sooner or later a state commissioner will be compelled to act to approve rate increases to an appropriate level or risk having the entire insurance market in their state collapse.

Why would any stock holder give more than zero fucks how 1 single state is performing wrt the entire portfolio?

aa

The article says insurers in Oregon paid $600+ more in claims than they collected in premiums per insured customer in 2014. Whose pocket does that $600 come from?

After seeing this insurance commissioner approves rate increase of $600+profit +overhead. Whose pocket does that $600+profit+overhead come from?

Yes, previously this was coming from everyone else in the country.

My point is that going forward this cost will be borne by the Oregon policy holders through the increased rates.

aa

 

[dismal]

My point is that going forward this cost will be borne by the Oregon policy holders through the increased rates.

aa

True to the extent Oregon policy holders pay the for the cost of their own policies, which under Obamacare I think averages out at about 20% true.

I do not recall if the subsidy is fixed or if it gets bigger as the cost of policy increases. If it's fixed then policyholders would bear the cost. If it's variable taxpayers would probably bear most of it.

 

[Alcoholic Actuary]

My point is that going forward this cost will be borne by the Oregon policy holders through the increased rates.

aa

True to the extent Oregon policy holders pay the for the cost of their own policies, which under Obamacare I think averages out at about 20% true.

I do not recall if the subsidy is fixed or if it gets bigger as the cost of policy increases. If it's fixed then policyholders would bear the cost. If it's variable taxpayers would probably bear most of it.

Are you talking about the exchanges? bc your entire post and that of the OP is referring to the individual and small group market - in the solitary state of Oregon. The subsidy on the exchange varies based on how much you make, disappearing as you reach 400% of the poverty level. The taxes collected for these subsidies comes primarily from new taxes on Cadillac Plans and Drug and Medical Device manufacturers.

Are you saying that it is better to disallow insurers to collect an adequate rate when facing a $600/person shortfall in a particular territory? If so, where do you think the shortfall gets made up?

aa

 

[fromderinside]

True to the extent Oregon policy holders pay the for the cost of their own policies, which under Obamacare I think averages out at about 20% true.

I do not recall if the subsidy is fixed or if it gets bigger as the cost of policy increases. If it's fixed then policyholders would bear the cost. If it's variable taxpayers would probably bear most of it.

Are you talking about the exchanges? bc your entire post and that of the OP is referring to the individual and small group market - in the solitary state of Oregon. The subsidy on the exchange varies based on how much you make, disappearing as you reach 400% of the poverty level. The taxes collected for these subsidies comes primarily from new taxes on Cadillac Plans and Drug and Medical Device manufacturers.

Are you saying that it is better to disallow insurers to collect an adequate rate when facing a $600/person shortfall in a particular territory? If so, where do you think the shortfall gets made up?

aa

So with the silver Oregon plan formula if you make up to 400% of poverty level you get subsidies and your policy costs are limited to less than 9.5% of taxable income. If insurers are losing $600/person annually in this category they need to negotiate better deals with hospitals, doctors, pharmacies and other entities in the for profit medical system don't you think. And ACA should have provisions that ensure rates charged from these sources permit insurers to profit within these bounds or there is something rotten in the American medical system. I mean, on average, EU nation annual medical costs are about 50% of American costs. So it should be possible, even mandatory, for such rate achieving.

 

[dismal]

True to the extent Oregon policy holders pay the for the cost of their own policies, which under Obamacare I think averages out at about 20% true.

I do not recall if the subsidy is fixed or if it gets bigger as the cost of policy increases. If it's fixed then policyholders would bear the cost. If it's variable taxpayers would probably bear most of it.

Are you talking about the exchanges? bc your entire post and that of the OP is referring to the individual and small group market - in the solitary state of Oregon. The subsidy on the exchange varies based on how much you make, disappearing as you reach 400% of the poverty level. The taxes collected for these subsidies comes primarily from new taxes on Cadillac Plans and Drug and Medical Device manufacturers.

Are you saying that it is better to disallow insurers to collect an adequate rate when facing a $600/person shortfall in a particular territory? If so, where do you think the shortfall gets made up?

aa

I'm saying what I said. I don't recall saying what you asked if I said.

Earlier in the thread there was much smugness and pooh poohing about insurance commissions disallowing proposed rate increases. It is perhaps interesting to people who assumed this would happen that one of the first insurance commissions to act thought the insurance companys' proposed increases were not high enough.

 

[Alcoholic Actuary]

Are you talking about the exchanges? bc your entire post and that of the OP is referring to the individual and small group market - in the solitary state of Oregon. The subsidy on the exchange varies based on how much you make, disappearing as you reach 400% of the poverty level. The taxes collected for these subsidies comes primarily from new taxes on Cadillac Plans and Drug and Medical Device manufacturers.

Are you saying that it is better to disallow insurers to collect an adequate rate when facing a $600/person shortfall in a particular territory? If so, where do you think the shortfall gets made up?

aa

So with the silver Oregon plan formula if you make up to 400% of poverty level you get subsidies and your policy costs are limited to less than 9.5% of taxable income. If insurers are losing $600/person annually in this category they need to negotiate better deals with hospitals, doctors, pharmacies and other entities in the for profit medical system don't you think.

Yes.

And ACA should have provisions that ensure rates charged from these sources permit insurers to profit within these bounds or there is something rotten in the American medical system. I mean, on average, EU nation annual medical costs are about 50% of American costs. So it should be possible, even mandatory, for such rate achieving.

I agree. In many of the EU countries, the government or single payer provider more or less tells the healthcare professional what she will be paid. It's not really a negotiation. A few years ago I saw a documentary on France and I believe doctors there earned around $90k.

I'm not suggesting our doctors are overpaid, and there certainly is room for cuts in the insurance executive salary department. Truthfully, I think that negotiated rates are the problem. There is no reason for the same procedure to cost as much as 400% more from one location to another. Wouldn't it be easier (more predictable) if someone (medicare) said "this is what a pacemaker implant costs $X - it can be adjusted for general cost of living difference and maybe another 20% for specific patient condition"? No in or out of network, no inflated prices on the bill, could work with single payer or in a traditional insurance market - in fact it would probably closely resemble our automobile market.

But I digress, the ACA does have the 80% min loss ratio provision which allows for 15-17% expenses and a 3-5% profit margin. The problem is that in some states, these insurers are reporting a 110% loss ratio.

aa

 

[Alcoholic Actuary]

Are you talking about the exchanges? bc your entire post and that of the OP is referring to the individual and small group market - in the solitary state of Oregon. The subsidy on the exchange varies based on how much you make, disappearing as you reach 400% of the poverty level. The taxes collected for these subsidies comes primarily from new taxes on Cadillac Plans and Drug and Medical Device manufacturers.

Are you saying that it is better to disallow insurers to collect an adequate rate when facing a $600/person shortfall in a particular territory? If so, where do you think the shortfall gets made up?

aa

I'm saying what I said. I don't recall saying what you asked if I said.

Earlier in the thread there was much smugness and pooh poohing about insurance commissions disallowing proposed rate increases. It is perhaps interesting to people who assumed this would happen that one of the first insurance commissions to act thought the insurance companys' proposed increases were not high enough.

I don't think Oregon is some kind of bellweather for the rest of the country. They've had below average rates for several years. And if we all lost our collective shit every time an insurer asked for a rate increase we'd never leave the bathroom. Saying "insurers are asking for rate increases in my state therefore the ACA is a failure" is analogous to "It's below freezing in the winter in my state therefore global warming is a hoax".

aa

 

[fromderinside]

But I digress, the ACA does have the 80% min loss ratio provision which allows for 15-17% expenses and a 3-5% profit margin. The problem is that in some states, these insurers are reporting a 110% loss ratio.

aa

...suggesting to me gross negligence, even incompetence, on the part of the insurance companies in their marketing and customer recruitment, or, in their evaluation methodology, or, more likely, both. Of course what some are saying might be right. This is a starting, marketing, claim that will be adjusted to more realistic numbers by the time new rates are actually fixed.

 

[dismal]

I'm saying what I said. I don't recall saying what you asked if I said.

Earlier in the thread there was much smugness and pooh poohing about insurance commissions disallowing proposed rate increases. It is perhaps interesting to people who assumed this would happen that one of the first insurance commissions to act thought the insurance companys' proposed increases were not high enough.

I don't think Oregon is some kind of bellweather for the rest of the country. They've had below average rates for several years. And if we all lost our collective shit every time an insurer asked for a rate increase we'd never leave the bathroom. Saying "insurers are asking for rate increases in my state therefore the ACA is a failure" is analogous to "It's below freezing in the winter in my state therefore global warming is a hoax".

aa

You should take this up with the people who were so hasty to downplay the insurance companies asking for big rate increases.

The issue here, in my opinion, is not so much the insurance companies asking for rate big rate increase so much as the costs per insured appear to be wildly higher than anyone projected because the pool of insured is older and sicker than expected.

How could anyone predict have predicted that would have happened? Except for the fact it was somewhat obvious it would given the incentives Obamacare created, and many people did predict it.