AT&T to take $1 billion hit related to Obamacare

[Moliere]

Wouldn't a better analogy be one that involved buying a car and discovering it was a lemon only to have your car insurance company drop you and no other company willing to insure you because of the car's defects?

It will be interesting to see if insurance companies can stay in business when their entire business model has been changed from profiteering to providing medical care.

Why would a car insurance company drop you because your car is a lemon? They don't guarantee the working condition of the car. They only pay for the costs to fix it after an accident. In fact, if it truly is a lemon, your insurance company would be happy because you'd be driving it less since it would be in the shop more.

[smokymountainrain]

Wouldn't a better analogy be one that involved buying a car and discovering it was a lemon only to have your car insurance company drop you and no other company willing to insure you because of the car's defects?

Um, no. Health Insurance companies don't drop people when they get sick. They also don't refuse to insure people with pre-existing conditions if those people had been covered previously and continuously.

[beelzebabette]

Um, no. Health Insurance companies don't drop people when they get sick. They also don't refuse to insure people with pre-existing conditions if those people had been covered previously and continuously.

(In most cases) only since 1996, when Kennedy-Kassebaum changed the rules.

[RobinFinderson]

I just cannot figure out how insurance companies will make any money with this model. Can you imagine wrapping your car around a phone pole, and then calling AAA and signing up for a policy starting right then? How is this any different?

This is probably why you are not an insurance company executive, and if you were, your company would fold. The rules of the game have changed, and the big insurance companies will either adapt or go extinct. This is American capitalism, and sea change policy has happened before. In some ways this is like ending the use of child labor, because a once-common business model has been legislated obsolete. Some manufacturers may have gone out of business because they couldn't figure out how to replace the little hands. Some families may have done worse off without the extra income from their working children. Adapt or go extinct. Industry has always had to play by the rules written in DC. American style capitalism isn't about being able to do whatever you want. It is about making clear rules that are fairly enforced on everyone so that the winners are the most innovative, rather than the most politically connected.

[beelzebabette]

I am with 8BR on this one. As a small business, you are already pooled with other small businesses for pricing. To the insurance company, small businesses cost them more due to increased utilization, therefore the premiums are higher.

In the long run, the insurance companies are going to find a way to compensate for not being able to adjust premiums to manage risk(forced to take all comers, regardless of risk of benefits that will need to be pain). The way that they will compensate is to increase the premiums across the board for all comers.

In the beginning of phase in of this bill, I think you will see more small businesses drop health insurance as a benefit as premiums are likely to increase by 15-20%(they will have to for the insurance company to remain viable).

I'm at a loss to reconcile my experience playing at HR for a small company with what you relate with your posts. Our pricing was based on the health questionnaires filled out by our employees. Then we were put into a small business pool, but our pricing was influenced by our employees' utilization history and medical conditions.

We saw annual increases in the range of 14+% in the period I worked there so I don't follow how your anticipated increase is any different.

Anyway, I'm in and out today so I apologize for the short response, but my read of the health care bill was that it would help the employer I worked with, not hurt them.

Finally, regarding the pre-existing condition, I'll-enroll-in-the-ER scenario: Will this really be possible? I haven't read the entire bill. Can insurance companies make insurance effective the first of the month following enrollment, like they currently do? I honestly don't know.

[SloanHater]

Insurance companies do not provide care.

I'm not sure if you are being facetious or not, but I'm at a loss as how to describe the process of insurance companies taking your money in exchange for access to medical treatment, without being an ass.

[Jarid in Cedar]

I'm at a loss to reconcile my experience playing at HR for a small company with what you relate with your posts. Our pricing was based on the health questionnaires filled out by our employees. Then we were put into a small business pool, but our pricing was influenced by our employees' utilization history and medical conditions.

Correct. The difference is that the small business pool is higher risk to the insurer than the large business. Therefore, after review of the medical/ulitization info, the small business will pay more than a big business even when utilization/medical risks are factored out

We saw annual increases in the range of 14+% in the period I worked there so I don't follow how your anticipated increase is any different.

I was being kind with my increase guess. I sit on a physicians advisory board for one of the major not-for-profit insurers in Utah. The math that they use to show what not being able to adjust for risk is staggering.

Finally, regarding the pre-existing condition, I'll-enroll-in-the-ER scenario: Will this really be possible? I haven't read the entire bill. Can insurance companies make insurance effective the first of the month following enrollment, like they currently do? I honestly don't know.

The way I have read it, you will be able to apply at any time and benefits will be retroactive to application date.

[Jarid in Cedar]

I'm not sure if you are being facetious or not, but I'm at a loss as how to describe the process of insurance companies taking your money in exchange for access to medical treatment, without being an ass.

Insurance companies are a broker. They do not provide the care. Unsatisfied with insurance companies and their role. Bypass them and negotiate directly with the providers and hospitals. You will surprised at the ends that they will go through to assure fair payment and to not have to deal with an insurer.

[SloanHater]

Why would a car insurance company drop you because your car is a lemon? They don't guarantee the working condition of the car. They only pay for the costs to fix it after an accident. In fact, if it truly is a lemon, your insurance company would be happy because you'd be driving it less since it would be in the shop more.

You are mistaken. A repair shop would be happy to have a repeat customer. Insurance companies would not.

You only pay a portion of the total cost based on the probability that you will need the insurance companies services. If the insurance company knew with a certain probability that you would be a net cost, they would drop you in a heartbeat.

This is(was) the problem with health insurance.

[Jarid in Cedar]

You are mistaken. A repair shop would be happy to have a repeat customer. Insurance companies would not.

You only pay a portion of the total cost based on the probability that you will need the insurance companies services. If the insurance company knew with a certain probability that you would be a net cost, they would drop you in a heartbeat.

This is(was) the problem with health insurance.

There are people who are guaranteed to be a net cost(diabetics come to mind first and foremost). Now that the insurance companies cannot rate this person up(or drop them), they will account for these known losses by upping the rates on everyone else.

That is the primary concern I have this this legislation.

[beelzebabette]

The way I have read it, you will be able to apply at any time and benefits will be retroactive to application date.

I'll try to come back to your first two points tonight. This part is interesting to me, though. Where did you read this? Most of what I've read is related to the tax consequences, blah, blah, blah. I haven't seen this yet so I need an additional news source.

[SloanHater]

Insurance companies are a broker. They do not provide the care. Unsatisfied with insurance companies and their role. Bypass them and negotiate directly with the providers and hospitals. You will surprised at the ends that they will go through to assure fair payment and to not have to deal with an insurer.

Perhaps I could have better stated my observation that insurances are indirect healthcare providers.

I'd like to believe that a hospital owned and run by an insurance company would treat me as fairly as a customer, however, if there was a large movement of people away from monthly insurance premiums to cash-for-services, I would guess that access to services would become more difficult for non-customers.

There are people who are guaranteed to be a net cost(diabetics come to mind first and foremost). Now that the insurance companies cannot rate this person up(or drop them), they will account for these known losses by upping the rates on everyone else.

That is the primary concern I have this this legislation.

I agree with the concern for cost, but based on second-hand experiences, these people won't stop seeking medical treatment. They will simply seek it from the most expensive place possible, the ER.

[Indy Coug]

If the insurance company knew with a certain probability that you would be a net cost, they would drop you in a heartbeat.

This is(was) the problem with health insurance.

If you think that's the problem with insurance, you simply have a different concept of what insurance is or should be. Insurance is not an arrangement where the insurance company receives premiums in exchange for losses that are both already known in advance and are in excess of the premiums they receive.

Good luck getting a life insurance policy if you're living in a hospice.

Good luck getting maritime insurance for the Titanic after it already rubs shoulders with an iceberg.

[Moliere]

You are mistaken. A repair shop would be happy to have a repeat customer. Insurance companies would not.

You only pay a portion of the total cost based on the probability that you will need the insurance companies services. If the insurance company knew with a certain probability that you would be a net cost, they would drop you in a heartbeat.

This is(was) the problem with health insurance.

I'm lost. Am I just missing the mark here?

How does owning a lemon result in you being a repeat customer to an insurance company? Last time I checked, my car insurance does not cover repairs when my car won't start in the morning because the electronics are faulty.

Please, if I'm making a donkey out of myself someone let me know but I'm not understanding how SH's analogy works in the context he is putting it.

[Surfah]

I'm lost. Am I just missing the mark here?

How does owning a lemon result in you being a repeat customer to an insurance company? Last time I checked, my car insurance does not cover repairs when my car won't start in the morning because the electronics are faulty.

Please, if I'm making a donkey out of myself someone let me know but I'm not understanding how SH's analogy works in the context he is putting it.

No. He lost me too. Unless he is discussing auto repair insurance which is entirely different than mandated auto insurance.