If Obamacare is so good why is the federal government exempt?

[Kellhound]

Why wouldn't they have been doing it this whole time? There is nothing new created with a 20% cap, that would cause insurance companies to increase prices where they didn't before. Why would a 20% cap change anything int his regard? It doesn't change a previously altruistic corporation into a greedy one.

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The same reason the shot down is happening as the start for insurance exchanges begins next week. The worst thing that could happen to republican, is for Americans to actually like them. This is why the race is on...

Insurance companies do not make money off of how much they pay out, they make it by NOT paying out and charging higher premiums. If their profits are capped at 20%, the only way to make more profit is to pay more out and raise the rates. They already are greedy, this will just change how they are greedy...

[Felya]

Insurance companies do not make money off of how much they pay out, they make it by NOT paying out and charging higher premiums. If their profits are capped at 20%, the only way to make more profit is to pay more out and raise the rates. They already are greedy, this will just change how they are greedy...

Why would they not want to make more profit before? How does this change anything?

[darkwarrior42]

Why would they not want to make more profit before? How does this change anything?

Because before they could raise rates as much as competition would permit, while simultaneously trying everything in their power to limit how much they pay out. Supposedly, the 20% cap means either they must pay out more in health care coverage in order to raise rate, or they can't raise rates. (Practically, it just means they have to shuffle money around to work within the cap, but that's beside the point... kinda like how allowing companies to buy/sell/trade caps on CO2 emissions doesn't encourage companies to change anything, but rather encourages them to game the system to be legally compliant while not actually improving anything.)

But as I typically say in threads like this, Obamacare is not universal health care. I tend to support the idea of a well implemented universal health care system, but what we have is... questionable at best. And yes, there are numerous situations in which the penalties for not having/providing insurance are less than the cost of the insurance itself, and I know numerous people who saw their insurance premiums go up dramatically.

[Kellhound]

Why would they not want to make more profit before? How does this change anything?

You are not understanding, before profit was maximised by how little they spent on actual care outpays, now their profit is tied to a percentage of that outpay. In order to increase thier profit, they have to increase their outpay (to a point) and raise the premiums to pay for it all.

[Felya]

Because before they could raise rates as much as competition would permit, while simultaneously trying everything in their power to limit how much they pay out.

How would insurance exchanges inhibit competition?

Supposedly, the 20% cap means either they must pay out more in health care coverage in order to raise rate, or they can't raise rates.

How do they increase pay out?

I know numerous people who saw their insurance premiums go up dramatically.

What happened to the competition you just claimed kept the prices lower?

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You are not understanding, before profit was maximised by how little they spent on actual care outpays, now their profit is tied to a percentage of that outpay. In order to increase thier profit, they have to increase their outpay (to a point) and raise the premiums to pay for it all.

In order to make 1 dollar, they need to find a way to spend 4 dollars. Why wouldn't they increase prices by 5 dollars, before they were forced to spend 4 of it?

[Kellhound]

How would insurance exchanges inhibit competition?



How do they increase pay out?



What happened to the competition you just claimed kept the prices lower?

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In order to make 1 dollar, they need to find a way to spend 4 dollars. Why wouldn't they increase prices by 5 dollars, before they were forced to spend 1 of it?

Because if they take in 10 dollars but only spend 4, they must return 5 to the customers, but if they spend 8 they get to keep 2.

[Felya]

Because if they take in 10 dollars but only spend 4, they must return 5 to the customers, but if they spend 8 they get to keep 2.

Yes, but if they arbitrarily increase prices when they have to give back anything, why wouldn't they do it when they had to give back nothing? What was keeping them from making more money before Obamacare?

[Carlosdanger]

The Feds long ago set up an exclusive single payer, tax money funded healthcare system for themselves that beats anything else out there.

Obamacare too is just another lobbied to hell pile of crap mostly benefitting the bottom line of insurance companies.

Should have gone with the German model.

[Cthulhu 2020]

It would require some serious conspiracy to figure out how to spend that much. But yeah, their profits are capped by how much they take in vs how much they spend. If they take in too much and people just aren't getting sick, they have to return money to the people in the form of refunds.

Currently, the top insurance company in fortune 500 makes a 37% profit before Obamacare's caps.

Sounds to me like in the long run, costs are going to go down.

[Moozart]

Because it's FORCING people to not choose to want to live with crippling health care bills/debilitating diseases!

Duh, I mean who would actually want to go through with a surgery/treatment that would save your life or prevent you from being disabled for the rest of your life?

I have chosen for the last 10 years not to pay for heathcare. When i need to go to the Doctor which is RARE i pay out of pocket. My employer charges almost $200 a month for something i will almost never use. That is a car payment. We should not be forced to get something we dont need if we are not abusing the emergency room system and stacking up bills. I know i sure as hell cant aford another $200 a month on top of all the bills i already have.

This is only going to drive more people into debt in the long run

[Kellhound]

It would require some serious conspiracy to figure out how to spend that much. But yeah, their profits are capped by how much they take in vs how much they spend. If they take in too much and people just aren't getting sick, they have to return money to the people in the form of refunds.

Currently, the top insurance company in fortune 500 makes a 37% profit before Obamacare's caps.

Sounds to me like in the long run, costs are going to go down.

"Hey, we can bill the XYZ company more for this because I hear they need to spend more this quarter"
or
"We need more outpay this quarter, go ahead and approve these claims we wouldn't have before"

It is easy to spend more money.....

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Yes, but if they arbitrarily increase prices when they have to give back anything, why wouldn't they do it when they had to give back nothing? What was keeping them from making more money before Obamacare?

Nothing, that was the reason the cap was part of the bill.

[Felya]

For the sake of simple math, lets say an insurance company made 30% in profit. In order to make 10% more profit, when they are capped at 20%, they would have to spend 40% more on you. This means that they could have made 50% profit, prior to Obamacare. The only thing that changed, is that they would have to spend 40% of that on you. Without Obamacare, there s nothing to inhibit an insurance company from simply increasing your cost by 50% without spending anything on you.

To suggest that the cap somehow forces the rates to increase, means that there was a force that was keeping insurance from doing the same thing, but recouping 4 times the profit.

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Nothing, that was the reason the cap was part of the bill.

Why didn't they increase profits before Obamacare?

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It would require some serious conspiracy to figure out how to spend that much. But yeah, their profits are capped by how much they take in vs how much they spend. If they take in too much and people just aren't getting sick, they have to return money to the people in the form of refunds.

Currently, the top insurance company in fortune 500 makes a 37% profit before Obamacare's caps.

Sounds to me like in the long run, costs are going to go down.

To suggest that the prices would increase because they require 4 times the justification they required before, makes no sense to me. Why not have 70% profits?

[Cthulhu 2020]

This is only going to drive more people into debt in the long run

Is it? Over 60% of US bankruptcies are due to sudden emergency medical bills. This really isn't a problem in countries with single payer health care, which we should have tbh, but dismantling the insurance industry by the core wouldn't be good for our economy. It needs to be gradual.

If you ever incur a really bad injury or contract some kind of disease, you'll be thanking Obamacare then.

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To suggest that the prices would increase because they require 4 times the justification they required before, makes no sense to me. Why not have 70% profits?

I'm not really sure I understand your question. I did say that it sounds like once the initial clusterfuck has died down and refunds start going out, health insurance will be much cheaper.

[Luuth]

This would be true if the government would have placed a freeze on insurance rates to start with when Obamacare was first announced. Instead, they allowed the insurance companies to raise their rates drastically to where it is actually much more expensive now to get insurance than it was before Obamacare.

The rates being shown on the California healthcare exchange are about what they were previously, or even cheaper. My understanding is that obamacare will tend to lower rates in states with large populations, and may increase cost in low pop states.

[Kellhound]

For the sake of simple math, lets say an insurance company made 30% in profit. In order to make 10% more profit, when they are capped at 20%, they would have to spend 40% more on you. This means that they could have made 50% profit, prior to Obamacare. The only thing that changed, is that they would have to spend 40% of that on you. Without Obamacare, there s nothing to inhibit an insurance company from simply increasing your cost by 50% without spending anything on you.

To suggest that the cap somehow forces the rates to increase, means that there was a force that was keeping insurance from doing the same thing, but recouping 4 times the profit.

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Why didn't they increase profits before Obamacare?

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To suggest that the prices would increase because they require 4 times the justification they required before, makes no sense to me. Why not have 70% profits?

The simple reason is compitition combined with the ability to forgo coverage if price went too high. And over 1/3 profit isn't chump change....

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Is it? Over 60% of US bankruptcies are due to sudden emergency medical bills. This really isn't a problem in countries with single payer health care, which we should have tbh, but dismantling the insurance industry by the core wouldn't be good for our economy. It needs to be gradual.

If you ever incur a really bad injury or contract some kind of disease, you'll be thanking Obamacare then.

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I'm not really sure I understand your question. I did say that it sounds like once the initial clusterfuck has died down and refunds start going out, health insurance will be much cheaper.

Im more expecting a sharp drop in insurance profits followed by a sharp rise in permiums followed by a large round of refunds followed by a new "normal" above what it is today, but not by a huge margin.

[Cthulhu 2020]

The rates being shown on the California healthcare exchange are about what they were previously, or even cheaper. My understanding is that obamacare will tend to lower rates in states with large populations, and may increase cost in low pop states.

Considering you can buy insurance across state lines with Obamacare, that's not true. Health insurance costs are going to be determined by state and specific location because of that area's health care costs. Some hospitals charging a ton more money for the same service is what's really going to drive prices up, but the price of insurance in those states was already high to begin with because of that factor... which is where HMO's come into play.

Pricing is all pretty complicated, but it looks like overall the effects of Obamacare are going to drive prices down.

[Slybak]

As the title says.
Why is federal government exempt if it's such a good idea?

Because the FEBP (Federal Employee Benefits Program) functions exactly like the exchanges set up by PPACA except it isn't run by an agency of a state government, so the drafters of PPACA left it alone. Then Senator Chuck Grassley of Iowa, who is an asshole and so is everyone who votes for him, decided to put an amendment in PPACA requiring all members of the House and Senate as well as their "official staff" to join the exchanges, effectively barring them from the healthcare plans that they currently have as a condition of being Federal employees. This despite the fact that the exchanges are being set up specifically to make insurance more affordable on the individual market, i.e. for people who don't get their health insurance through their employer.

Cowardly Democrats went along with it, because they didn't want to get hit by advertisements during an election year castigating them for "exempting themselves from Obamacare" even though the charge was and is fundamentally meaningless. They were "exempt" the same way anyone else who gets their insurance from their employer is "exempt," and exempt isn't even the proper term; no one is forced to participate in the exchanges. Well, everyone except official members of Congressional staff, which the Grassley Amendment purposely left undefined.

So what happened? A mess, that's what happened. Though the FEBP functions as an exchange, it is essentially an employer-run exchange in that it subsidizes the premiums of its members as part of the employment contract. You don't get that with exchanges, so everyone who works in Congress had their health plans eviscerated and discerning who is and who is not an "official" employee of a Congressional office has created a major bureaucratic headache for the Office of Personnel Management (the agency that administers the FEBP) when deciding who does and does not qualify for the FEPB.

The current plan to "exempt" the Federal employees is basically an attempt to repeal the Grassley Amendment, which should have never been passed in the first place. And, lo and behold, ignorant partakers of right-wing bullshit are just lapping it up.

[Cthulhu 2020]

Im more expecting a sharp drop in insurance profits followed by a sharp rise in permiums followed by a large round of refunds followed by a new "normal" above what it is today, but not by a huge margin.

Hey, that sounds like the American banking system!

[obdigore]

Im more expecting a sharp drop in insurance profits followed by a sharp rise in permiums followed by a large round of refunds followed by a new "normal" above what it is today, but not by a huge margin.

There is increased Competition with the new way the laws are setup, since each plan no longer has to be state-dependent, and you no longer need a 'presence' in a state to provide insurance in that state.

I'm not sure why you think Obamacare is going to do away with market competition. Isn't that something you lassiez-faire lovers tout as a saving grace? Unless you are attempting to imply that all healthcare companies are/will be in collusion to set prices, which is illegal and something only a strong federal government can investigate and end.

[Kellhound]

Hey, that sounds like the American banking system!

In some ways, yes, but more so if you required banks to issue credit cards to everyone no matter what their credit history is.