Gyroscopic Investing

Here are the important provisions of the House health insurance reform bill as far as the future (or lack thereof) of Obamacare. If you add these all together, it looks as though the insurance companies will stop writing policies in states that don't go for the waivers. When that happens, there will be people with pitchforks at the state capitols demanding that they take the waivers so that they can get health insurance. Of course the waivers, taken together, allow a market for health insurance.

(From http://money.cnn.com/2017/03/24/news/ec ... care-bill/)

"1. Repeal the individual and employer mandates. The GOP's bill would get rid of the Obamacare requirement that people must have health coverage or face a tax penalty. It would also eliminate the requirement that employers with at least 50 employees provide health insurance to their workers.

Under Obamacare, these companies were required to provide affordable insurance to staffers who work more than 30 hours a week. They would face a penalty if they did not meet this criteria and their employee sought subsidies on the exchanges. These provisions take effect retroactively to 2016.

2. Put in place a continuous coverage requirement instead. The original Republican plan seeks to allow insurers to impose a 30% surcharge on the
premiums of those who let their coverage lapse for at least 63 days. The plan would enable insurers to levy this surcharge for one year, but it would
only apply to policies bought in the individual or small group markets.

Under the latest amendment, states that seek waivers could replace this provision with one that allows insurers to charge consumers who've had a gap in coverage based on their health status.

3. Allow states to obtain waivers to let insurers charge consumers more if they have pre-existing conditions. States could get waivers that would
allow carriers to set premiums based on enrollees' medical backgrounds under several circumstances. Those enrollees would have to have let their
coverage lapse, and the state would have to set up a risk program -- such as a high-risk pool -- that, in some cases, could provide help to those
being charged higher premiums.

4. Allow states to seek waivers of the federal requirement that insurers cover 10 essential health benefits. States could seek waivers that would
allow insurers to sell plans that don't include all the services mandated by the Affordable Care Act.

Under Obamacare, carriers must provide outpatient care, emergency services, hospitalization, maternity, mental health and substance abuse,
prescription drugs, rehabilitation services, lab work, preventative care and pediatric services.

This could lower premiums somewhat and give consumers a wider choice of plans. But it would also make it harder for people to buy comprehensive
coverage and weaken the protections for those with pre-existing conditions. "

Libertarian666 wrote:2. Put in place a continuous coverage requirement instead. The original Republican plan seeks to allow insurers to impose a 30% surcharge on the
premiums of those who let their coverage lapse for at least 63 days. The plan would enable insurers to levy this surcharge for one year, but it would
only apply to policies bought in the individual or small group markets.

Under the latest amendment, states that seek waivers could replace this provision with one that allows insurers to charge consumers who've had a gap in coverage based on their health status.

Thanks for the comprehensive summary, tech!

I don't think anyone wants to see a return to the bad old days of "pre-existing conditions", but I'm afraid that's what would happen under this policy. The continuous coverage requirement is a great idea, but a 30% surcharge for one year isn't going to be enough to encourage people to get insurance before they get sick. It also won't be enough to protect insurers. I'd make the surcharge active for at least 10 years, and set the amount to a sliding scale based on the duration of the lapse in coverage, range from 10 to 100%. And the surcharges should be additive (but capped at 100%), if there are subsequent coverage lapses - and not eligible for any subsidies.

What are they going to do about the people who don't have coverage currently? Presumably they'd all start out paying surcharges, except for the ones smart enough to sign up for coverage before the new law takes effect.

My understanding is that if the state gets a waiver, then insurers will be able to charge more than the 30% surcharge for pre-existing conditions.

My pre-ACA grandfathered plan is finally being killed in July, and I'm seriously considering just going with a healthcare sharing ministry instead of insurance. If the non-continuous-coverage charge were just 30% for a year, it'd be almost a no-brainer.

Xan, think about getting group health coverage through a professional organization. For example, I belong to SEG.ORG in my profession, they offer group health. That's my backup plan in case I get unemployed again. Actually, you could join SEG, or AAPG.org, or SPE.org as an Associate (same health plan) and still get group health access, and you'd get these funny journals you can't understand.

Xan wrote:My understanding is that if the state gets a waiver, then insurers will be able to charge more than the 30% surcharge for pre-existing conditions.

My pre-ACA grandfathered plan is finally being killed in July, and I'm seriously considering just going with a healthcare sharing ministry instead of insurance. If the non-continuous-coverage charge were just 30% for a year, it'd be almost a no-brainer.

What's the drawback? I'm really impressed with these, from what I've seen. Are they expensive?

Xan, I've been a member of a health care sharing ministry for a number of years now. I absolutely love it, except for the evangelical overlay which I've simply resolved to ignore. Among the advantages that I've experienced:

1) It's way, way less expensive. I pay only $280 a month, and I'm going on 60. The only "deductible" is $300 per condition per year. That amount is waived if the provider gives you a cash discount.

2) Coverage is far superior to any insurance you could possibly get. Needs are generally met at 100%, the only exception being those rare months when needs substantially exceed shares, in which case needs are met at 80%. I can think of only two months when that's occurred.

3) I regard the financial stability of the organization to be superior to that of any insurance company. Because needs are met by individual members sending checks to designated other members, the organization itself is merely administrative, and its solvency is never an issue.

4) When a condition is not covered under the guidelines (i.e., a preexisting condition), it can still be submitted as a "special prayer need" to which members may, but are not required, to contribute.

5) They're not looking for ways to deny coverage. There are very well-defined coverage guidelines, but within those limits their philosophy is that YOU are in the position to best determine what you need. They actually encourage reasonable alternative treatments.

6) They're constantly expanding their resources for accessing low-cost medical services. One of the things I need to look into is a new partnership with a service that allows you to consult with a doctor over the phone and to obtain simple prescriptions for something like $25 a pop.

7) The organization to which I belong has an established track record going back several decades. It's extremely well-managed. Communication is great. You actually talk to human beings.

If you have specific questions you'd like to ask, feel free to PM me.

Pointedstick wrote: What's the drawback? I'm really impressed with these, from what I've seen. Are they expensive?

Some minor annoyances:

(1) You have to have a pastor or church leader sign off on every need form; also every yearly renewal form. This has a very paternalistic feel about it and can lead to invasions of privacy; but on the other hand I understand the need for accountability and the prevention of fraud--and the alternatives aren't a whole lot better.

(2) Some people might have difficulty with the fact that members are required to sign a statement agreeing to refrain from certain unhealthy lifestyle choices--namely, smoking of cigarettes, use of illegal drugs, drinking to excess, and sex outside of biblical marriage. (To me, most of these requirements are pretty reasonable ones that have a direct relationship to health, and, consequently, the financial burden to be placed on other members.) Members are required to attend church regularly, which sort of presupposes involvement with a mainstream religious institution and which can be a challenge if your locale doesn't afford a lot of choices.

(3) There is a statement of faith to which members must attest. This could be a problem for some people.

(4) The strong evangelical culture is hard to miss. For example, if you're a woman, you can forget about being on the Board of Directors. It ain't gonna happen.

Thanks Maddy. I wish there were a non-religious version of these, though I understand why it hasn't happened.

They're not expensive. It's really cheap, especially for a family. CHM is the one we've used for my wife (since our regular insurance doesn't cover pregnancy, and this does), and they count all kids as a single unit. A gold plan is $150/month/unit, so it's $450/month for a family with however many kids.

You need to add the optional "Brother's Keeper" program if you want to remove the "per-illness" payout limit. But that doesn't cost much more. It varies, but it's along the lines of $60 a quarter for the whole family, I believe. Then there's no max. The "deductible" (they have different terminology) is $500 per illness.

Maybe we should have pulled the trigger already, but so far we've kept our regular (grandfathered) insurance.

Advantages:
* Cost: premium and deductible are much lower.
* It's a much more pleasant experience to work with your doctor and doctor's office without insurance being in the way. Just make sure that everybody knows the no-insurance story up front, and that they have reasonable prices.

Disadvantages:
* Is it as solid as a "real" insurance company? I don't know. Also, if a big insurer were to fail, I'm sure (wrong as I would believe it to be) that the government would step in and make sure the customers were whole. Not so here.
* It can take them a while to pay. Being able to pay the providers up front out of my own pocket and then be reimbursed by CHM several weeks later has worked out fine. Not sure how it would work if something were to come up that I couldn't pony up for.
* No negotiated insurance prices for treatments/labs/medicines, so you could end up paying retail for things. In reality, you negotiate and I think you'll end up paying about as much as you would pay under insurance.
* Insurance pays for a number of things 100%, regardless of deductible. Vaccinations. Well-visits (particularly important for very young ones, where those are frequent). None of that would be covered by CHM. I've found out that the state will cover the cost of vaccinations for people without insurance, so that may be moot.
* As Maddy pointed out [I had to leave this post and come back, and she wrote in the meantime], you need a pastor to sign off. At CHM it's only when you initially sign up and never again.

Pointedstick wrote:Thanks Maddy. I wish there were a non-religious version of these, though I understand why it hasn't happened.

P.S., there is one called "Liberty" which is run by the Mennonites. What's different about it is that it explicitly seeks to be inclusive of people of all faiths. You might check it out.

It's boggling my mind a bit seeing this discussed here. When my dad got cancer I found out my parents were in such a share and it kind of scared me and annoyed me at first. But everything Maddy and Xan say is true and it has worked out great for my parents.

From watching my parents handle this, I would add that I personally would use it as a low cost temporary replacement but stay on insurance if I can. Don't underestimate the practical difficulty of negotiating every bill yourself and managing a clipboard of individual checks in the mail when you're going through the the time commitent and stress of being sick.

Shawn, I'd be very interested in hear more about your experience. Did you have to negotiate every single bill, or negotiate once with each provider? Or did that vary from provider to provider?

Were you able to, ahead of time, tell everybody that there was no insurance, and then they gave you something approaching the real price rather than the fake price? Or did they stick with the fake price and you had to fight and argue with the billing department?

Were you able to pay the bill immediately and then get reimbursed, or did you have to wait for the money to come from the ministry and then pay the providers? (Or some mix?) Was it harder to get a good deal when you weren't paying immediately?

Did you ever mention the ministry to providers, or did you present yourself (er, your parents) simply as uninsured?

Re negotiation of prices: The sharing ministry of which I am a member is associated with an organization that will negotiate bills on members' behalf, free of charge. They are professional negotiators, and, from what I've heard, are generally successful in whittling things down to rock-bottom.

For minor stuff, it's generally enough to ask the receptionist if the office offers a discount for cash on the barrelhead. I've usually gotten a substantial discount (up to 40%) without any further effort. On occasion, I've gone further and asked the doctor straight-out whether he'll give me the same price as the insurance companies get. They're usually a little startled that a patient would be aware of the sweetheart deals they have with insurance companies, but they almost always crack a smile and agree.

Sometimes I mention being a member of a sharing ministry, and sometimes I don't. If it were a big bill and I didn't have the ability to pay 100% up front, I most definitely would, as most providers have at least passing familiarity with these organizations and their members' reputation for never leaving them stiffed.

Maddy, that's great information. Should have specifically asked you as well as Shawn!

Oh, I should have mentioned... One specialist that I saw told me that the major insurance companies get about a 40% discount. So I've always kept that in mind as a reasonable benchmark.

Xan wrote:Shawn, I'd be very interested in hear more about your experience. Did you have to negotiate every single bill, or negotiate once with each provider? Or did that vary from provider to provider?

Were you able to, ahead of time, tell everybody that there was no insurance, and then they gave you something approaching the real price rather than the fake price? Or did they stick with the fake price and you had to fight and argue with the billing department?

Were you able to pay the bill immediately and then get reimbursed, or did you have to wait for the money to come from the ministry and then pay the providers? (Or some mix?) Was it harder to get a good deal when you weren't paying immediately?

Did you ever mention the ministry to providers, or did you present yourself (er, your parents) simply as uninsured?

Xan, I will try to answer with the caveat that my parents handled all this and I'm speaking from the perspective of what they chose to share and from the everpresent piles of paperwork on their kitchen counter over the past year. It was strange watching my mom reconcile a list of checks while my dad recovered from surgery last fall.

My understanding is they declare up front for each encounter that they are "self-pay." I'm sure they told some about the share, but self-pay seemed to be the password they used to get things rolling. This generally triggers some discount right away. I always thought that was an old wives' tale, but it is routine and not chump change (easily 15+%?). For larger bills more negotiation is always required afterward. For the largest ones the group did employ a negotiating service as Maddy mentioned, but this was rare.

An itemized bill must be submitted in order to get paid. For some reason getting this has consistently proven the biggest pain for my parents, sometimes going weeks with the billing department.

The grueling part is you have to do this every time and each encounter may have four bills, between a facility, doctor, anesthesiologist, and labs. Endoscopy, scans, another endoscopy, latheroscopy, surgery, scans, chemo, booster shots... it goes on and on, multiple bills, multiple calls. And the follow up receiving checks and reporting back to the share if someone didn't pay. It's fine for having a baby one time when you're full of energy, harder for longer term issues. As with anything, don't get sick

As for timing, it depends on the bill. My parents pay what they can up front. I don't know how deferring and payment plans affect discounting but they paid most things up front. The money from the share reliably comes in 6-8 weeks depending on how your paperwork and the share's monthly cycle work out.

I know the share plays up the patient knows best/personal accountability angle in their marketing but I didn't see that play out in this case. When you have cancer you pursue the treatment you need. I witnessed some strain dealing with billing but nothing like "We're not going to do test X because it costs money and we don't need it."

To reiterate, it is work but the share came through as promised. And the share had zero issue with where care was received. My parents went out of state for a second opinion with perhaps a redundant test or two and ended up doing the surgery there. It was all covered with no hassle.

There's an old-fashioned name for these sharing plans.

Insurance.

This is what insurance is supposed to be. Not enormous amounts of paperwork and trivialities that make everyone crazy, and covering payments for birth control pills or vaccinations.

Insurance should consist of a group of people sharing expenses that are:
1. Unpredictable and
2. Large

That's it.

WiseOne wrote:

Libertarian666 wrote:2. Put in place a continuous coverage requirement instead. The original Republican plan seeks to allow insurers to impose a 30% surcharge on the
premiums of those who let their coverage lapse for at least 63 days. The plan would enable insurers to levy this surcharge for one year, but it would
only apply to policies bought in the individual or small group markets.

Under the latest amendment, states that seek waivers could replace this provision with one that allows insurers to charge consumers who've had a gap in coverage based on their health status.

Thanks for the comprehensive summary, tech!

I don't think anyone wants to see a return to the bad old days of "pre-existing conditions", but I'm afraid that's what would happen under this policy. The continuous coverage requirement is a great idea, but a 30% surcharge for one year isn't going to be enough to encourage people to get insurance before they get sick. It also won't be enough to protect insurers. I'd make the surcharge active for at least 10 years, and set the amount to a sliding scale based on the duration of the lapse in coverage, range from 10 to 100%. And the surcharges should be additive (but capped at 100%), if there are subsequent coverage lapses - and not eligible for any subsidies.

What are they going to do about the people who don't have coverage currently? Presumably they'd all start out paying surcharges, except for the ones smart enough to sign up for coverage before the new law takes effect.

The pre-ACA HIPAA rules were that if you had no gap in coverage of more than 63 days in the last 18 months, insurers had to cover you without underwriting. They could require underwriting for any gap more than that, and could rate you, or refuse to cover pre-existing conditions for up to 18 months minus the amount of time you had "credible" coverage. So if you had a year of credible coverage prior to your application, they could only refuse to cover pre-existing conditions for 6 months. (I needed to learn these rules because I had a lot of job changes that resulted in coverage gaps.)

Of course this isn't a free-market ideal, but it is enough to keep the insurance companies from going broke by covering pre-existing conditions without limits, so the state governments that want any insurance companies to write policies in their states will be able to use the waivers to get them to come back.