Government

New Obama proposals aim to ease ACA’s financial burden on health insurance companies | FierceHealthcare

Another modification would provide a measure of protection for insurers against high-cost enrollees. When a member’s claims exceed $2 million annually, the cost would be shared among multiple insurers under the proposal. 

Source: New Obama proposals aim to ease ACA’s financial burden on health insurance companies | FierceHealthcare

For all those public option fans out there, consider the above proposed strategy.

Very high cost claims would be shared by multiple insurers. The attempts to mask the risks of adverse selection in light of the inability to underwrite those risks only gets more bizarre. As long as we have a program that allows, if not encourages, people to game the system, none of this will work.

As for the public option, who do you think will be picking up those $2 million plus claims?

 

 

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1 reply »

  1. So, here is the problem.

    We wait until someone incurs $2MM in expense and then she/he is a pariah.

    And, here is the solution – pushed by individuals as diverse as Ted Kennedy (D-MA) and Bill Frist (R-TN). Tax each and every American, every day of their life, to cover each and every American by creating a public/private insurance consortium, to fund catastrophic medical expenses in excess of an arbitrary (choose an) attachment point – say, $25,000 or $50,000 a year. The coverage is “cost plus” – plus a small margin of profit for insurance companies. The expenses are covered at rates equal to those charged Medicare beneficiaries (with no balance billing provided). So, the physicians and hospitals and other providers aren’t asked to shoulder the cost of care as a charity – but get modest incomes for treating the sickest.

    So, each of us incurs a premium cost every day of our life. The premium is paid, sooner or later, through the income tax system – as a separate, per capita charge. You file a return each year, and accumulate a debt to the rest of the taxpayers as you grow up, and that debt must start to be repaid no later than once you reach age 25 – at no less than double the rate charged Americans ages 50+ for the next 25 years. The only way of avoiding the premium is to die.

    Individuals remain responsible to secure insurance or to self-insure to cover expenses up to the attachment point for catastrophic expenses.

    Like

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