I retired from my career in healthcare finance shortly before the Affordable Care Act was passed, was on my wife's health plan for a few years and then went on Medicare. So I never bothered to learn much about the ACA. But when the recent shutdown featured the ACA subsidies my interest was piqued and I did some reading, which prompted the following rant.
The ACA has a provision requiring insurance plans to pay out a set percentage of premiums in care. The requirement is 85% for large group plans and 80% for smaller plans. This applies to all plans, not just those purchased through the ACA exchanges. So instantly the incentive to curb unnecessary care is eliminated. And with premiums subsidized there is now a direct incentive to expand care, raise premiums and increase profits. But it gets worse. With this incentive in place, insurance companies start acquiring physician practices and pharmacy benefit corporations so they can feast on the increased care directly. United Health Care employees 10% of the physicians in the United States. And I don't blame UHC and the others; when I see flies buzzing around spilled honey I blame whoever spilled it, not the flies.
And on another front, it looks like with half of all ACA enrollees fully subsidized, there's incentive to set up 'harvesting' firms and fraudulently enroll people in more than one state. There are systems set up to prevent this but there also estimates that it is happening in the low millions. The incidence of zero plan utilization in the ACA is higher than that in private insurance and is increasing, another indication this is happening.
And we wonder why premiums are increasing so rapidly. Meanwhile the Democrats push for more government involvement and the Republicans twiddle their thumbs and offer no alternative.
The ACA has a provision requiring insurance plans to pay out a set percentage of premiums in care. The requirement is 85% for large group plans and 80% for smaller plans. This applies to all plans, not just those purchased through the ACA exchanges. So instantly the incentive to curb unnecessary care is eliminated. And with premiums subsidized there is now a direct incentive to expand care, raise premiums and increase profits. But it gets worse. With this incentive in place, insurance companies start acquiring physician practices and pharmacy benefit corporations so they can feast on the increased care directly. United Health Care employees 10% of the physicians in the United States. And I don't blame UHC and the others; when I see flies buzzing around spilled honey I blame whoever spilled it, not the flies.
And on another front, it looks like with half of all ACA enrollees fully subsidized, there's incentive to set up 'harvesting' firms and fraudulently enroll people in more than one state. There are systems set up to prevent this but there also estimates that it is happening in the low millions. The incidence of zero plan utilization in the ACA is higher than that in private insurance and is increasing, another indication this is happening.
And we wonder why premiums are increasing so rapidly. Meanwhile the Democrats push for more government involvement and the Republicans twiddle their thumbs and offer no alternative.
