freeman3 wrote:Why does the 80/20 rule lead to higher costs? Health insurance companies are not allowed to pass costs on to the consumer in the form of higher premiums. This encourages them to be more efficient. And if we are reaching a consensus in this country that the uninsured should be covered, then the ACA has had a salutary effect. We can work on the best way to do that.

Doctor Fate wrote:Clearly, the $3.4B figure is questionable.

The 80/20 rule leads, inevitably, to higher costs.

danivon wrote:

Doctor Fate wrote:Clearly, the $3.4B figure is questionable.

It is a good estimate for the observed effect. Whether the 80/20 rule and other ACA measures account for all of it is questionable. Maybe it was the economy (although it would seem odd to have a 3-year old recession to suddenly kick in to the insurance market ).

The 80/20 rule leads, inevitably, to higher costs.

Does it? It sets a limit on Overhead + Profit, and so gives greater incentive to reduce overheads. As companies will still have to compete on premium levels as well as everything else, I'm not sure how the rule 'inevitably' leads to higher costs.

Perhaps you can explain why this is the case - and explain why the evidence suggests that premiums are lower than they would have been based on prevailing trend.

Doctor Fate wrote:Yes, but the bigger the company can make the pie, the better for them. 20% of a huge number is better than 20% of a lower number.

Perhaps you can explain why this is the case - and explain why the evidence suggests that premiums are lower than they would have been based on prevailing trend.

I don't think that is the trend. New York is an outlier--as it is already highly regulated. The trend has been premiums going up substantially. The vast majority of "decreases" I have seen are "projected."

If you want to go on the record now and predict costs will go down, profits will go down, and the economy will boom as a result of Obamacare, please do.

danivon wrote:

Doctor Fate wrote:Yes, but the bigger the company can make the pie, the better for them. 20% of a huge number is better than 20% of a lower number.

True, but they still have to compete with each other on price, and they were able to take more than 20% before (of whatever number). And the 20% includes overheads, and is not pure profit. Of course, they could reduce overheads - but is that a bad thing?

A second health insurer notified state regulators Tuesday that it will stop selling individual policies in California.

UnitedHealthcare announced it will no longer offer individual insurance plans after the end of the year. It will focus instead on its core business of group plans for large and small employers.

"Our individual business in California has always been relatively small and we currently serve less than 8,000 individual customers across the state," the company said in a statement. "Over the years, it has become more difficult to administer these plans in a cost-effective way for our members in California."

The announcement comes two weeks after Aetna Inc. said it also plans to exit California's individual insurance market. Both insurers avoided participating in the state exchange that is being established as part of the Affordable Care Act.

State Insurance Commissioner Dave Jones says the departure of UnitedHealthcare and Aetna is bad news for consumers.

You are the one who made a claim of inevitability. When I ask how you back that up, you come back with that. Which suggest to me that you can't. Perhaps I am wrong - so let's see if you got more than supposition and snark.

IRS employees have a prominent role in Obamacare, but their union wants no part of the law.

National Treasury Employees Union officials are urging members to write their congressional representatives in opposition to receiving coverage through President Obama’s health care law.

The union leaders are providing members with a form letter to send to the congressmen that says “I am very concerned about legislation that has been introduced by Congressman Dave Camp to push federal employees out of the Federal Employees Health Benefits Program and into the insurance exchanges established under the Affordable Care Act.”

The NTEU represents 150,000 federal employees overall, including most of the nearly 100,000 IRS workers.

WASHINGTON (AP) — You may have heard that shopping for health insurance under President Barack Obama's health care overhaul will be like using Travelocity or Amazon.

But many people will end up with something more mundane than online shopping, like a call to the help desk.

Struggling with a deadline crunch, some states are delaying online tools that could make it easier for consumers to find the right plan when the markets go live on Oct. 1.

Ahead of open enrollment for millions of uninsured Americans, the feds and the states are investing in massive call centers.

"The description that this was going to be like Travelocity was a very simplistic way of looking at it," said Christine Ferguson, director of the Rhode Island Health Benefits Exchange. "I never bought into it."

"The bottom line is that with tight timelines ... states have had to scale back their initial ambitions for Day 1," said Paul Hencoski, leader of KPMG's government health practice, which is advising nearly 20 states. "A lot of the more sophisticated functionalities that might have been offered through the Web are being deferred to later phases."

When the markets first open, Hencoski said, "there will be a significant amount of manual processing of things that will later be automated." Translation: emails, phone calls, faxes.

The Obama administration, which will be running the markets or taking the lead in 35 states, has yet to demonstrate the technology platform that will help consumers get financial help with their premiums and pick a plan.

Officials say they always envisioned people would be able to apply in a variety of ways, from online to the mail. About 7 million are expected to enroll in the marketplaces by next year, and the administration says consumers will be pleased with the experience.

The Affordable Care Act expands a program called 340B, which siphons money from drug makers and insurers to subsidize certain hospitals. The program has been expanded as a way to offset some of the cuts that the law imposes on hospitals. One significant side effect: 340B is increasing the cost of cancer care—and harming its quality....

Now ObamaCare is encouraging even wider 340B abuses. The new health-care law expands 340B to cover cancer centers, new categories of hospitals and rural health centers. Since one of the ways that hospitals qualify for 340B turns on how many Medicaid patients they serve, ObamaCare's Medicaid expansion will also increase the number of 340B-eligible entities. ...

Because the overhead for a hospital is higher than for a doctor's office, a patient treated in a hospital clinic incurs $6,500 more in costs than the same person treated in a private medical office, according to data from the Community Oncology Alliance. Patients who get chemotherapy at a hospital also face an additional $650 in co-pays and other out-of-pocket expenses. The price for infusing the drugs alone rises by 55%, according to an analysis of Medicare data. These inflated prices for cancer treatment inevitably drive up the cost of health insurance....

The Obama team has used informal "subregulatory guidance" to expand the 340B program still further. One big change came in March 2010 "guidance" that allows hospitals to contract with an unlimited number of neighborhood pharmacies to dispense drugs through them. There is no requirement that these "satellite" pharmacies have any geographic tie to the hospital.

This has created an industry of middlemen who build vast networks of pharmacies, all to expand the number of 340B prescriptions that a hospital can capture. There are now more than 25,000 arrangements between such satellite pharmacies and 340B-qualified treatment sites, according to the Health Resources and Services Administration.

Ray Jay wrote:Here's a good example of how ACA made a bad situation worse.

http://online.wsj.com/article/SB1000142 ... 13676.html

The Affordable Care Act expands a program called 340B, which siphons money from drug makers and insurers to subsidize certain hospitals. The program has been expanded as a way to offset some of the cuts that the law imposes on hospitals. One significant side effect: 340B is increasing the cost of cancer care—and harming its quality....

Now ObamaCare is encouraging even wider 340B abuses. The new health-care law expands 340B to cover cancer centers, new categories of hospitals and rural health centers. Since one of the ways that hospitals qualify for 340B turns on how many Medicaid patients they serve, ObamaCare's Medicaid expansion will also increase the number of 340B-eligible entities. ...

Because the overhead for a hospital is higher than for a doctor's office, a patient treated in a hospital clinic incurs $6,500 more in costs than the same person treated in a private medical office, according to data from the Community Oncology Alliance. Patients who get chemotherapy at a hospital also face an additional $650 in co-pays and other out-of-pocket expenses. The price for infusing the drugs alone rises by 55%, according to an analysis of Medicare data. These inflated prices for cancer treatment inevitably drive up the cost of health insurance....

The Obama team has used informal "subregulatory guidance" to expand the 340B program still further. One big change came in March 2010 "guidance" that allows hospitals to contract with an unlimited number of neighborhood pharmacies to dispense drugs through them. There is no requirement that these "satellite" pharmacies have any geographic tie to the hospital.

This has created an industry of middlemen who build vast networks of pharmacies, all to expand the number of 340B prescriptions that a hospital can capture. There are now more than 25,000 arrangements between such satellite pharmacies and 340B-qualified treatment sites, according to the Health Resources and Services Administration.

Setting the Record Straight on 340B: A Response to Critics, was released on July 9, 2013 by Safety Net Hospitals for Pharmaceutical Access (SNHPA).[53] The report, which includes documented independent research, describes the congressional intent of the program and provides evidence of how providers are using their savings. It also shows the program is saving money for federal, state, and local governments and taxpayers and refutes many of the misleading and inaccurate statements made by critics of the program.[54] The report calls for a number of reforms to modernize the program, including more pricing transparency to ensure that health care providers are not being overcharged, audits of drug manufacturers, as well as a look at the use of contract pharmacies to determine whether the program is helping vulnerable patients better access prescription medications and pharmacy care.

The report calls for a number of reforms to modernize the program, including more pricing transparency to ensure that health care providers are not being overcharged, audits of drug manufacturers, as well as a look at the use of contract pharmacies to determine whether the program is helping vulnerable patients better access prescription medications and pharmacy care.

danivon wrote:

Doctor Fate wrote:Yes, but the bigger the company can make the pie, the better for them. 20% of a huge number is better than 20% of a lower number.

True, but they still have to compete with each other on price, and they were able to take more than 20% before (of whatever number). And the 20% includes overheads, and is not pure profit. Of course, they could reduce overheads - but is that a bad thing?

One way to increase the size of the pie would be to increase prices. Another would be to increase total income - and a good way to do that would be to get a greater market share (which would also reduce the effect of fixed cost overheads). How would you do that? Well, one way is to compete on price.

If lots of companies try the first option, it only takes one to explore the second and they will lose share (and so their profits would be hit).

This is simple business analysis stuff.

geojanes wrote:The only issue with your business analysis is that the market for insurance is so opaque that people can't shop on price. If the exchanges are well done and eliminate that opaqueness, then fine, I agree with you. But I'm not holding my breath. There are a lot of people being paid off the fat of the medical system, I'm not confident that the gov't is going to be able to overcome the squealing that would happen if people could actually start shopping for insurance on price.

The question is of course ridiculous: no one has proposed “legislation that proposes to shut down the government if Congress does not defund” Obamacare. Some Republicans have proposed passing a spending resolution that funds everything except Obamacare, but the government would only shut down if the Democrats decide that is to their political advantage to refuse to pass any spending bill. The Republican proposal is to shut down only Obamacare, not the government.

Yet, despite that biased presentation of the question, the results are almost even: 48% approve of the alleged proposal to shut down the government, while 53% disapprove. Among the coveted Hispanic demographic, the breakdown is 55/45. It would seem, therefore, that if the Republicans play their cards right, they can box the Democrats into a position where the Dems’ decision to shut down the government would do them little or no good politically, and meanwhile, Obamacare might actually be defunded.