Emphasis mine.
Can... someone explain how that makes any sense at all?
This means that it is, counterintuitivly, in there interest to spend more on claims, as it makes the 20% profit they are allowed to take bigger. At least until they start to lose clients.
I can provide proof for my statement, can you do the same?
You are always welcome, even encouraged, to provide proof. I am getting my information from:
https://www.healthcare.gov/health-care-law-protections/rate-...
>Does this apply to my plan?
>It depends.
>For Rate Review: These requirements don’t apply to grandfathered plans. Check your plan’s materials or ask your employer or your benefits administrator to find out if your health plan is grandfathered.
>For the 80/20 Rule: These rights apply to all individual, small group, and large group health plans, whether your plan is grandfathered or not.
I assume grandfathered plans are not ACA compliant, and hence do not have all the provisions that make health insurance worth having (such as out of pocket maximums and zero cost preventative care and appeals processes and other things that set a floor on the quality of healthcare covered by the insurance).
Third Party Administrator.
>>I assume grandfathered plans are not ACA compliant,
Correct.
>>hence do not have all the provisions that make health insurance worth having
Not necessarily. Some have broader benefits that maybe you would want.
https://www.healthcare.gov/health-care-law-protections/rate-...
Some states are 85/15. Did you know that? However, the plans you are referring to are Marketplace plans. I am not referring to Marketplace plans, nor community rated employer plans. I'm referring to self funded employer based commercial plans. These same type of plans are commonly offered not only in the US, but UK, Canada and Germany.
Edit: I get downvoted for providing proof.
No, but it's a small number. Approximately 13% of people with employer-provided plans have grandfathered plans[0]. That number is also steadily decreasing over time.
That's specifically looking at people who get their insurance through their own employer, so the denominator doesn't include, for example, people on Medicare or Medicaid.
The 80% claims rule doesn't apply to every individual plan, but it's widespread enough that it drives the overall structure of how insurance companies operate these days. They're not optimizing their organizational workflow for plans which comprise a tiny - and shrinking - fraction of their revenue.
[0] https://www.kff.org/report-section/ehbs-2019-section-13-gran...
Sorry about the cancer!! please go die somewhere that I cant see it thanks.
But my experience is with a large insurer and a school with a hundred or so employees, not something on Microsoft’s scale.
This is illegal since 2011 due to the Affordable Care Act.
The only factors allowed to price insurance is age, location, and tobacco use.
https://www.healthcare.gov/how-plans-set-your-premiums
Even the age factor is bounded by the highest risk age having to be only 3x the lowest risk age (i.e. a subsidy from young to old). The lack of ability to price based on pre existing health conditions is a subsidy from healthy to sick.
And for political reasons, we can afford to discriminate against tobacco use, but not sugar or alcohol or sat fats or lack of exercise.
It applies to all non-Medicare, non-Medicaid, non-grandfathered[0] plans for people under the age of 65.
Ironically, once you turn 65, all bets are off: insurers can factor your age into your premiums, and people often get a massive rate hike then (usually prompting them to switch to Medicare).
[0] A small percentage of employer-provided pre-ACA plans are grandfathered in, but they're few in number and decreasing over time. If you have a grandfathered plan, you probably know it, because it's required to be disclosed visibly in the plan documents when you enroll.
Not necessarily.
Self funded plans are underwritten. Fully Insured over 50 fte plans are underwritten. A carrier will underwrite based upon Medical History. Individual Short Term Medical plans are also underwritten.
>>It applies to all non-Medicare, non-Medicaid, non-grandfathered[0] plans for people under the age of 65.
Incorrect, see above.
>>Ironically, once you turn 65, all bets are off: insurers can factor your age into your premiums, and people often get a massive rate hike then (usually prompting them to switch to Medicare).
Again, not necessarily, Nearly all Americans over 65 have Medicare, as part A is required. The States regulate these plans so each state may be different in some way. Medicare supplements are often underwritten, but can be guarantee issue, again depends on the State.
>>A small percentage of employer-provided pre-ACA plans are grandfathered
Correct, these are getting priced out. They are underwritten. If you are on a GF/GM plan, then switching to LFP or similar is likely a smart move.
Can you give a source to this statement or is this an ad hominem?
>>but I don't think that's the case for most?
Great question, generally the larger the company the better the case for self funding. Keep in mind there are different types of self funding, such as graded funding and level funding. Most employees on employer based health insurance are likely to be on a self funded chassis however that is changing. Not all states provide that data, without that, it's hard to pinpoint an exact number of how many is on what chassis.
The quote indicates that the employer group was self-insured, and Cigna was the plan administrator. This means that Cigna is not insuring the health plan. Cigna is probably paid a per member per month (PMPM) fee for third party administration (TPA). The actual medical claims and associated costs are directly paid by the self-insured entity (the employer group).
Self-insurance can make actuarial sense for companies with >2,000 employees.
[EDIT] I mean I guess what I'm getting at is that if they decide to make the adjustment in treatment, it's going to be because it makes them more money, even if they can't afford to make all of those adjustments they might, or it'd push payouts too low and they'd have to give some money back—finding the option to do so doesn't increase profit immediately, but if they choose to make the change, it's surely because it'll make them more money.