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View Diary: Insurers not looking to delay Obamacare, mostly (50 comments)

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  •  Man, what about the states that don't have the (7+ / 0-)

    power to reject increases?  Their rates will go through the roof.  

    "If the misery of the poor be caused not by the laws of nature, but by our institutions, great is our sin." Charles Darwin

    by Rockydog on Fri Feb 08, 2013 at 11:48:46 AM PST

    •  There is still the federal backstop (1+ / 0-)
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      Insurers have to pay out 80% of what they collect in premiums for health care.

      The effect of increasing the cost for young people is an inevitable side effect of only allowing age to increase premiums 300%. Those last few years of life cost a lot more than 3 times the cost for all those young years where most people's only health care cost is an annual check-up.

      A conservative is a man with two perfectly good legs who, however, has never learned how to walk forward. Franklin D. Roosevelt

      by notrouble on Sat Feb 09, 2013 at 08:16:51 PM PST

      [ Parent ]

      •  of course (2+ / 0-)
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        Sherri in TX, tb mare

        Those last few years of life people should be on Medicare so it is not as if young people will be charged 1/3 of the most unhealthiest years.

        •  That's true (2+ / 0-)
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          nextstep, antirove

          But even a 55 year old is likely to have higher ongoing health care costs compared to a 25 year old. Heart problems, cancer treatments, diabetes, and a host of things are pretty uncommon in 25 year olds, but much more common in 55 year olds.

          The point of the 3x cost difference was to keep insurance affordable for those not quite old enough for Medicare. In other words, require insurance companies to shift costs to younger people.

          The 80% payout requirement still provides limits on total premiums collected.

          A conservative is a man with two perfectly good legs who, however, has never learned how to walk forward. Franklin D. Roosevelt

          by notrouble on Sat Feb 09, 2013 at 09:08:41 PM PST

          [ Parent ]

          •  The issue is getting young people to start paying (3+ / 0-)
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            tb mare, notrouble, antirove

            The legitimate insurance co argument here is that if rates for young people are too high they will avoid purchasing recognizing that they are getting a bad deal for their premium dollar- paying lots but using little.

            Young people have very low medical utilization, and at 1 to 3 this demographic, still struggling to find work in a disastorous economy, is being asked to subsidize oldsters like me (age 53.)   Even at 1 to 5, they'd probably be getting a raw deal as their average medical costs are really, really low.  

            Personally I'd love to have my insurance premiums subsidized by unemployed 23 year olds... but I'd feel pretty guilty about it.   There is a "right" number and it can be discovered... but it's probably even lower than 1 to 5.

            How much the youth should be required to subsidize people in their 50s and early 60s is an interesting philosophical and actuaral question, and somewhere there are real numbers that would inform the debate.

            •  I wasn't suggesting it was right (4+ / 0-)
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              antirove, Miles, jim bow, GayHillbilly

              only that a 3x age premium limit was inherently going to shift costs to the young. It was built in by congress when they established that limit.

              The flip side is how can people in their 50's afford to pay 5x the cost of 25 year olds? $1500 per month per person doesn't work either.

              A conservative is a man with two perfectly good legs who, however, has never learned how to walk forward. Franklin D. Roosevelt

              by notrouble on Sun Feb 10, 2013 at 08:54:42 AM PST

              [ Parent ]

              •  What kind of intergenerational compact? (1+ / 0-)
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                Social security is built on the young paying for the old.  So is Medicare.

                Medicaid is built on a progressive taxation of income (to the extent that it is funded by the federal government), with the wealthier paying disproportionately for the poor.

                The ACA is a new "young pay for the old" plan, but it feels different from social security... the insurance you are buying is sold to you as YOURS, but in fact a young person is being asked to pay for older users.  (Of course current insurance has all sorts of cross subsidies too... for the uninsured for example)

                We accept that in insurance the HEALTHY pay for the SICK because we know that we are healthy today, but might be sick at any moment.    But when people realize that young is correlated with healthy, it quickly dawns on them that what they really are is YOUNG (and therefore HEALTHY), and it's going to be a long time before they are OLD (and SICK).   All of that is a long way of saying that the intergenerational subsidy isn't something that people tend to think about when they purchase insurance against medical costs, but the ACA is built around some level of intergenerational subsidy.

                If you think about WHY that was done politically, we might consider the higher voting rates of 50 to 65 year olds, or other explanations.

                SHOULD it be done?   Is it a good idea to pay for the health care costs of the old with the wages of the young?    That's an interesting policy and political question.   It probably comes down to voice - who will scream louder, youth or older middle aged folks?   The 1 to 3 ratio calculates that youth won't know what hit them.  The insurers may be saying, you know what, we can tap into that uninsured youth market with lower prices, while older folks who know the value of insurance will put up with rates that are closer to their real costs and utilization.    

                •  you missed the most important part (1+ / 0-)
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                  of why this is different than Social Security:

                  with Social Security, I am paying into the common good.  I'm paying to the government to have it redistributed.

                  With the ACA, I'm forced by law to pay for some health insurance company's CEO's fifth vacation mansion.

                  One is moral, one is not.

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