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Not So Affordable Care Act – New York Edition
The Federal Reserve Bank of New York (Empire Fed) issued a Supplemental Survey Report conducted as part of their monthly manufacturing survey detailing how firms in the region are responding the Affordable Care Act.
Before reading further anyone care to wager the results of the survey?
Asked whether they were changing their health plans in response to the ACA, roughly two in five respondents—in both the manufacturing and service sector surveys—said they were not. Of those that were, however, the most widely reported adjustments involved higher deductibles, increased co-pays, and higher out-of-pocket maximums. The vast majority of firms in both surveys indicated that they would be paying a higher total premium, and somewhat more than half of respondents in both the manufacturing and service sector surveys said they were raising their employees’ share of contribution to the premium.
Considering this is from the Federal Reserve in the back yard of the major party nominees one would think this kind of data would either be paraded or buried depending on one’s consideration of the ACA. Time will tell if it makes it the mainstream media outside of CNBC.
Published in General
Does this indicate that many firms are increasingly going to transition to High Deductible plans with Health Savings Accounts? Getting people to pay for services upfront in this fashion eliminates a lot of the intermediary paperwork that insurance companies with traditional PPOs go through.
I added one to our plan this year and we’re currently evaluating if we should transition to it for most of our employees.
Double post. Somehow. Quick, put up the Max Signal!
Yes, the thumbnail sketch is the 3/5 of the firms are doing exactly that. The discussion is how to shift more costs and liability to the employees.
2/5 indicate they are keeping the status quo, but expect to pay much more to do so.
So 60% of businesses have to shuffle their plans due to cost?
With Aetna pulling out we are seeing a much quicker collapse than envisioned. The resulting fewer choices will lead us 1 step closer to the Obamacare architects original intent: single payer. DMV healthcare for 95%, concierge for the wealthy.
The problem there is that employees detest high-deductible plans, and meanwhile the feds are reinterpreting regulatory statutes and manipulating various threshold tests that may well eliminate the HSAs.
Furthermore, the ACA is so awfully tangled up in billing that you really are NOT paying up front for care. You still don’t know your costs until you get the bill. And this is getting worse.
Case in point – I go to my GP for a checkup. At the end of my appointment I cannot actually pay my bill. “I’m sorry” they tell me, “we don’t know what we can charge you until the insurance company tells us.”
“I’m on an HSA, it will be full price, right?”
“Not exactly. We still have to submit it to your carrier.”
“OK, but we know what that rate will be, right?”
“No. And if we overcharge you by even a penny, then we have to issue you a refund check. Better to wait until you get the bill.”
So I wait 30 days, and even then I can’t just pay the bill. My HSA doesn’t issue checks, and for security the payment slip no longer has CC info. I have to call.
Healthcare reform for me at this point consists of one statement: Healthcare providers shall post the price for services provided at their place of business and payment is due at the time of service.
I’ve written about this before and I’ve seen one half of it. At some point the providers need to sack up and start telling their customers how much this stuff costs.
The irony of the ACA may be that it is the spur that gets employers to reform healthcare themselves. By putting the money (and hence the power) in the hands of their employees to spend as they see fit that’s going to (hopefully) spark the changes we need in terms of putting people back in touch with the reality of the price mechanism in healthcare.
Agreed, but many I think are just terrified of the regulatory hammer that would drop. After all, if you don’t post the prices up front, you don’t have Mr. Regulator then demanding you lower them The obscurity charade serves many interests.
There is also this: many providers no longer even know what their own costs are, so the prices are guesswork.
I agree that was always going to be a positive from this experience and it would possibly motivate employers out of the health insurance business altogether.
Unfortunately that can’t be successful as long as the insurance policies and companies are wealth transfer entities.
It’s going to get worse before it gets better. Remember the counter drive – people are taught they are owed this service.
My company has begun posting an annual compensation report for us as members of the firm. It lists our entire cost of employment, not just salary and I think that is quite enlightening for a number of people who are otherwise ignorant as to what they cost the company.
Now, if companies decide to drop health insurance entirely they face the Obamacare fine, but that’s a real piece of employee compensation that they would just be ditching. Are they going to propose replacing it with nothing? Yikes.
The HDHP and HSA plan seems like the best place for them to go. It limits their costs and makes their employees at least invested in the process because they get to save something. Of course, there are always 10-15% of people who are healthcare black holes. Trying to segregate the healthy from the sick in the insurance pool is a really good idea, but it’s one that the ACA has destroyed.
When I go into McDonald’s I know how much a double cheeseburger costs before I buy it. No where else in society would we walk into a place of business and not know what we’re paying before we bought something.
This whole situation is absurd.
As I understand it, the main reason they can’t tell you the price up front is because each provider negotiates a different price with each individual insurer for every service provided. Thus, even if you’re paying out of pocket, the cost of a colonoscopy at the same medical practice will be different depending on who your insurer is, even if that insurer isn’t going to be paying a dime for the procedure.
Yes, yes it is.
When people start complaining about awful their doctors are, how bad the insurance companies are, how the ‘govmint needs to “fix” this, how “healthcare is a right!” I ask – “Would you tolerate buying your groceries this way? Would you buy shoes this way? Clothing and food are more necessary than your doctor even – would you want those tied to your employer, with payments routed through a 3rd party and your selections limited to what the Grocery regulator has on their plan?”
But in the case of health insurance, after you’ve bought 1,000 double cheeseburgers in a year, a third party starts paying for each double cheeseburger after that.
In other words, the absurdities in price transparency are in many ways a symptom of greater absurdities in the system. We probably won’t make much meaningful headway on price transparency without simplifying the real problem, which is the fact that a provider’s real customers aren’t the patients, but the insurance companies who can make or break their business by including them in their provider network.
The difference is that the demand curve for healthcare is near vertical. There is no price people won’t pay because ultimately the bulk of the cost was formerly paid via insurance claim.
If we had employer provided food insurance and wanted a double cheeseburger from McDonald’s we would walk in, order it, present our food card, hand the cashier the $2 copay and enjoy our delicious fat, sodium, and preservative laden double cheeseburger. It wouldn’t matter if the burger costs $4.99 or $499.
Darn it. I was trying to do the cheeseburger insurance scenario and Mendel beat me to it.
But we can’t ignore the other half of the equation.
There’s no chance that you’ll one day wake up and need $1,000 of groceries a day just to survive to next year. There is that chance for health care. That’s why we have third party payers.
It’s mentally tempting to try to separate the more “retail-like” expenses in health care (checkups, preventative care, small doctor’s visits for colds) from the big-ticket expenses like diabetes treatment or open heart surgery. But they’re not that easily separable, which is why even two-bit doctor’s visits get subjected to Dante’s eighth level of administrative hell.
This is correct. You are charged the negotiated rate arranged by your insurance provider.
You are a comment ninja.
Yap!
I’ve just become a serial liar to get things done. It’s still hell though, hell with a flow sheet, a double digit IQ and a performance rating based on denial percentages.
Is there any possible way these costs aren’t eventually offloaded to the public/consumers? Because I can’t think of any.
The point of any insurance is to offload costs onto other consumers, so I don’t see that as the worst thing in the world.
The bigger questions are which costs get offloaded, and how? Can we find a system that only spreads unbearable costs to others, but not costs that could easily be paid by the claimant himself? And can we find a system in which people buy into insurance for their own good and not through coercion?
Well I meant increased company costs meaning increased prices to consumers of the products/services provided by the surveyed companies.
I’m about 90% sure you’re the Doc they used as a template for Dr. Cox on Scrubs…
Maybe this will be the impetus for us to treat health insurance as…insurance.
People have become convinced that important stuff like healthcare is supposed to be free, or at least low cost. Their own money is for iPhones and stuff.
Sorry, gotcha now.
It actually sounds like the employers are saving money by slowly getting out of the group market (or switching to lower-premium plans).
One of the frustrating aspects of Obamacare is that it’s actually leading to the situation many conservative health care experts have wanted for years: less participation by employers, higher deductibles, more out-of-pocket spending. It’s just happening in completely the wrong way.