A new article by the Wall Street Journal has exposed the enormous health costs that insurance companies are charging for consumers to sign up for their plans on the health insurance exchange, even though many of them don’t actually need it.
The WSJ article claims that insurers are “balking at the cost of the health coverage they offer, particularly to lower-income consumers” and is headlined “Insurers Bail out at Health Care Expense.”
While the article doesn’t explicitly say that it’s true, it’s clear from the way it describes the health costs involved that the health care providers and health insurers that it refers to are trying to avoid any potential penalties that would result from the Affordable Care Act.
That’s because, according to the WSJ, the “big four” insurance companies (UnitedHealth, Blue Cross, Humana, and Aetna) are using the tax credits provided to them by the ACA to offer “preferred rate” plans that are more expensive than “silver” plans.
The articles article states that “the preferred rate” is a higher-than-average rate of premiums that insurers can charge their enrollees in order to encourage them to sign-up for the plan.
For example, UnitedHealth’s “premium” plan is about 40 percent more expensive for an individual to purchase than an “entry level” plan offered by the other three insurers.
However, because of the way the tax credit is structured, it is possible for an enrollee who pays the “premise” premium and then “retains” the other two insurers’ plans for a year to avoid paying the full cost of both their preferred and “entry-level” plans for the year.
UnitedHealth and Blue Cross both charge an “option premium” of about $10,000, while Humana charges an “intermediate premium” between $11,000 and $12,000.
The preferred rate is the one that insurers use to set premiums, and it’s the plan they offer to enrollees with the lowest costs.
While this may seem like a fair and reasonable price, it could actually result in higher out-of-pocket costs for enrollees.
For some enrollees, it may be the difference between having to pay $10 or $11 per month to have access to their primary health care provider or a health care plan that is cheaper.
And while it may not seem like an enormous amount of money, it can make all the difference in the world for many low-income and middle-income people.
The article notes that this may have been the case for some enrollee because it meant “some enrollees may have had to pay out of pocket for the full year for care they could have received with the cheapest plan available.”
However, the article does not say how many enrollees had to take out the preferred rate in order for their out-pays to be covered under their plans.
And, if it is true that many enrollee may have to pay for the health plan’s premium or even the plan’s “intermediary” costs, it raises a serious question about how insurers will manage the out-cost of the plan to ensure that enrollees have access regardless of how much they pay.
For many enrollers, the choice to signup for a plan with a higher premium than a plan offered on the exchange could have had a significant impact on their health.
In addition to potentially having to pick up the full costs of their plan in order that they would be able to afford the out of-pocket cost of their care, the premium can have a direct impact on enrollees’ ability to afford private coverage or Medicaid.
The fact that many people will not have access even if they do choose to buy insurance on the exchanges could have significant health consequences for many people.
It’s important to note that this article is about the cost that insurers would be willing to charge their customers to enroll in a plan that includes a high preferred rate, which is different than the cost they are charging enrollees on the ACA’s exchanges.
Under the ACA, insurers are required to provide “premies” to enrollee with the lower-than-$5,500 “entry” and “silver-level.”
The article doesn.
The $10 million that UnitedHealth, United Health, and Blue Shield are charging to enrolled people to sign the plans is an out-adjusted cost, meaning that the cost per enrollee was calculated on the assumption that the enrollee would be eligible for Medicare, Medicaid, and private coverage.
That is, it would be cheaper for enrollee to sign a plan and then pay the full $10 per month for the premium than to pay the $1,500 premium on the individual market and pay the out and intermezzo costs that go along with it.
But because of how the tax-credit structure is structured and because the out costs are based on enrollee’s out-pocket expenditures, it isn’t entirely clear that this is how the plans are calculated to