Jay Ackroyd at Eschaton is looking at an insurance grid and is trying to analyze costs for people buying a Bronze plan in New York State. He is making a serious error in what he is analyzing. Benefit grids are not legally binding documents; they are short hand to describe the rough characteristics of a plan. If one wants to be able to analyze possible cost-sharing responsibilities, you have to use the schedule of benefits for a particular plan. Cost sharing is an insurance industry term for payments of deductibles, co-pays and co-insurance by the individual member.
This is always important, but it is more important in a PPACA world because numerous common services are considered “non-cost share” services. This means the insurance company pays 100% of the service’s contract price if the service is performed in-network. Secondary items that result from a non-cost shared service such as lab work from the annual PCP visit may be cost-shared which means the doctor’s visit is free but the blood work is something that you have to spend deductible dollars on is common. If the blood work comes back with a problem that needs to be treated, the follow-up treatment is cost shared.
PPACA mandates non-cost shared services for annual PCP and OBGYN appointments, well-child visits, preventative vaccinations, birth control and a few other things. Additionally three sick primary care provider visits are limited cost-sharing services in that a co-pay can be charged but deductible does not have to be met. So the first three sick PCP visits may have a $40 co-pay per visti but no additional cost while the 4th sick PCP visit may cost $107 that is applied to the deductible.
Below is a list of possible services that my family could use next year and what our cost sharing responsibilities would be under my company’s Bronze plan. As you can see, we can use quite a few services that don’t apply to deductible or co-insurance amount:
| Member | Type of Visit | Cost Share? |
| Kid #1 | Annual PCP | no |
| Kid #1 | Flu shot | no |
| Kid #1 | Vaccines that are required for Kindergarten | no |
| kid #1 | PCP – sick visit – pink eye | small co-pay |
| Kid #1 | PCP – sick visit – itchy elbowitis | small co-pay |
| Kid #1 | PCP – sick visit – pink dot fever | small co-pay |
| Kid #2 | Well-baby PCP plus several vaccines | no |
| Kid #2 | Well-baby PCP round 2 plus several vaccines | no |
| Kid #2 | Flu shot | no |
| Kid #2 | PCP – sick visit -day care crud | small co-pay |
| Kid #2 | PCP – sick visit -day care crud | small co-pay |
| Kid #2 | PCP – sick visit -day care crud | small co-pay |
| Kid #2 | PCP – sick visit -itchy elbowitis | yes |
| Kid #2 | PCP – sick visit -day care crud | yes |
| Kid #2 | PCP – sick visit -day care crud | yes |
| Me | Annual PCP | no |
| Me | Flu shot | no |
| Me | PCP – sick visit – pneumonia | small co-pay |
| Me | Orthopedic surgeon for busted knee | yes |
| Me | Physical therapy for busted knee | yes |
| Wife | Annual Obgyn | no |
| Wife | Annual PCP | no |
| Wife | Long term birth control option (listening to Kid #2 crying does not count) | no |
| Wife | Flu shot | no |
There is a decent amount of actuarial value here that is either no cost-sharing or limited cost sharing. There is quite a bit of actuarial value that my family is paying for but would not be receiving under this service list but that is a good thing because it means that my family would be relatively healthy next year. The extra funds from services that we don’t use are used to pay for the kid with cancer or the forty something male whose cat failed in his third assaination attempt. It’s insurance, the healthy and lucky subsidize the unhealthy and unlucky.
The Red Pen
OT: USA Today has an article about how mental health coverage could upset the Obamacare apple cart.
I’d been interested in seeing your response to this. I have difficulty believing that the insurance industry didn’t think about this.
dr. bloor
So basically, Cole is a taker and not a maker.
Richard Mayhew
@dr. bloor: definately
Richard Mayhew
@The Red Pen: Yeah, we sort of knew that — mental health is an issue but the actuaries are not stupid nor illiterate
Fred Fnord
@Richard Mayhew: It took me a few moments to realize that you weren’t, in fact, implying that actuaries are insane.
Richard Mayhew
@Fred Fnord: that is a case by case determination where large scale statistical modeling fails
floridafrog
is it true that the costs for a given policy on the exchange exclusive of any subsidy) can be much lower than the costs quoted by the insurance company directly? Here in NE Florida, BCBS the only provider for our county seems to be charging almost double for the same policies when purchased directly from them.
Also, Humana is not on the exchange but is hawking policies at our local Walmart and going door to door in low income neighborhoods reportedly claiming to be selling Obamacare policies. Isn’t this fraud?
sparrow
@The Red Pen: Yeah, I call bull on that. I have had ADD my whole life, which should fall under “Mental Health” issues. But I don’t even see a psych anymore – once every 6 months (sometimes more), I get a script filled by my PCP. I’ve been managing it for years with fairly low doses of [drugname] and as long as that’s working, the additional costs to the system are zero.
Likewise, my mother has been taking [antidepressant name] for years now. Same thing: it works, she gets the script filled by her PCP every now and then, and that’s it. No additional cost.
These are probably the two most common mental health issues for young people, and a lot of them can be treated by the PCP (whether they should or not is another story). Even if I were seeing a psych every 60 days, I think that’s still not very much – maybe$600 per year in total costs to me + insurer? I would think the high costs *might* come in through expensive medication, but I don’t see a large percentage of young people needing that.
Violet
Richard, thanks for this. Is this kind of info available to the average person? We have the “grid” handout and a summary of benefits and are trying to compare plans. We don’t have anything called “schedule of benefits”. I’ve spoken to the HR people a couple of times and the insurance company many times and no one has pointed me in the direction of anything called “schedule of benefits”. Nor do I see it available on the website. The HR people did point me in the direction of all the summaries and any other benefit info that’s available.
We ran into a similar problem several years ago when we had an issue with something and wanted to see what the actual benefits were. After multiple attempts, we were finally told we could not see the plan because the company owned it and therefore we were not eligible to look at it. We just got what we got.
Richard Mayhew
@Violet: Summary of benefits may be the same thing — different companies may have different terminology:
A SoB will be set up in multiple columns (In Network, out of network)
It will list deductibles and co-insurance rate plus out of pocket max
It will list the cost share for Preventative care
It will list the cost share/authorization for in-patient hospital care
It will list what type of rehab benefits you get etc.
Botsplainer
@The Red Pen:
Mental health care costs are crazy expensive considering the results obtained. There are a shitload of marginal providers on an outpatient basis, and inpatient treatment is frequently in the vicinity of 20-30K per month. In family law, I get to see invoices and hear a lot of horror stories on this, particularly on the dickishness of pre-ACA insurers.
Having an adolescent or spouse with mental/emotional issues can upend a person’s financial life on a long term basis.
rikyrah
THIS IS FOR KAY:
Will Public Education Die in Douglas County, Colorado?
By dianerav
November 2, 2013 //
Investigative reporter Stephanie Simon of Politico reports on the most bizarre school board race in the nation: Douglas County, Colorado.
There, a powerful coalition of rightwing extremists has gained control of the school board and is determined to turn education into a free market, where competition and choice replace public education. They want vouchers, charter schools, and differentiated pay for teachers.
Simon writes: “The conservatives who control the board have neutered the teachers union, prodded neighborhood elementary schools to compete with one another for market share, directed tax money to pay for religious education and imposed a novel pay scale that values teachers by their subjects, so a young man teaching algebra to eighth graders can make $20,000 a year more than a colleague teaching world history down the hall.”
The future of this free-market policy will determined in the school board election, where powerful rightwing ideologues have funded the pro-market members of the board, and teachers’ unions and parents are funding those opposed to the elimination of public education.
The Koch brothers have contributed $350,000 to the free-market campaigners. They would, if they could, privatize all of what we now know as public education. The current board, fighting to maintain control, hired conservative icon Bill Bennett for $50,000 to be a consultant. It also hired Rick Hess of the American Enterprise Institute to write a paper praising the district’s initiatives, for $35,000.
Among the changes that conservatives admire:
http://dianeravitch.net/2013/11/02/will-public-education-die-in-douglas-county-colorado/
rikyrah
MORE FOR KAY:
Douglas County: The Cavalry is Coming!
October 29, 2013 by Kris Nielsen 10 Comments
Douglas County, Colorado is one to watch. For too long, an aggressively unprofessional school board has been playing politics with the schools, rather than concerning themselves with serving the community’s children. Now, an important election is coming up, and it can change the current destructive course with four board seats being contested.
I had the chance to meet the parents who are working tirelessly to promote change and get new faces into the seats up for grabs. There is both visceral anger and fear among these folks, and they fear for the futures of their kids and their community. The stakes are high. Douglas County schools are not urban and they’re not failing — not a usual target for privatizers — and we’re seeing a different strategy at play. The drive from the current board is to create “niche” schools, where students are tested, matched to a future career based on the scores, and then eventually placed into a niche school where they fit best, based on those criteria.
Parents aren’t okay with that. And neither are most community members, since it is probably the least democratic way to run a school system that we’ve seen so far in this country.
So, we have four challengers running for school board, and the grassroots movement to get them elected has been very active. Hundreds of volunteers spend every hour of free time canvassing, picketing, attending meetings and forums, and speaking to anyone who will listen.
Apparently, it’s working, because the “other side” is getting nervous. So nervous, in fact, that they’ve decided to call in the cavalry. Scott Gessler, the current Secretary of State and candidate for Colorado Governor, has put out the call to counter the grassroots movement with his own offensive. He’s even (cough) heroically put his campaign for governor on hold to support the decidedly partisan corporate candidates running for Douglas County — the candidates who support the niche campaign. And by “support,” I mean “pay for.”
There are some striking differences between the two sides.
Douglas County parents and teachers volunteer their time and money to support their candidates.
Douglas County privatizers spend corporate money to trash them. Look at the comparison below
http://atthechalkface.com/2013/10/29/douglas-county-the-cavalry-is-coming/
rikyrah
FOR KAY:
Koch group, unions battle over Colorado schools race
By STEPHANIE SIMON | 11/2/13 4:16 PM EST
It isn’t often that the Koch brothers’ political advocacy group gets involved in a local school board race.
But this fall, Americans for Prosperity is spending big in the wealthy suburbs south of Denver to influence voters in the Douglas County School District, which has gone further than any district in the nation to reshape public education into a competitive, free-market enterprise.
The conservatives who control the board have neutered the teachers union, prodded neighborhood elementary schools to compete with one another for market share, directed tax money to pay for religious education and imposed a novel pay scale that values teachers by their subjects, so a young man teaching algebra to eighth graders can make $20,000 a year more than a colleague teaching world history down the hall.
Conservatives across the U.S. see Douglas County as a model for transforming public schools everywhere. But with four of seven seats on the board up for grabs in Tuesday’s election, reformers find themselves fending off a spirited challenge from a coalition of angry parents and well-funded teachers unions. The race has been nasty and pricey, too; spending from all parties is likely to hit at least $800,000.
Read more: http://www.politico.com/story/2013/11/koch-group-unions-battle-over-colorado-schools-race-99252.html#ixzz2jy7dNPvF
Richard Mayhew
@floridafrog: It is suspicious and sketchy as hell — my bet is talk to the local Attorney General/District Attorney as I am not a lawyer nor do I play one on the internet.
If Humana is selling policies to uninsured individuals who are Exchange eligible, those people are getting fucked as their subsidies don’t follow them off exchange.
azlib
I always thought preventive services were paid 100% because we want folks to see their PCP at least once a year. In my case it is a good thing I did, since my yearly visit tracked my PSA increase which eventually led to an early prostate cancer diagnosis and successful surgery. While expensive, it was overall a hell of a lot cheaper than treating an advanced cancer later.
What is interesting my employer provided policy included “free” preventive care visits several years before the ACA went into effect. Seems the insurance companies were already moving their policies towards the community standards or was there something in the ACA which required this change?
Violet
@Richard Mayhew: For our plan that’s called the Benefits at a Glance. The Summary of Benefits is shorter and has less info. The Benefits at a Glance does not have info on any kind of therapy–physical, occupational, speech. I had to call to find out about it. Its really hard to find out info. I think I talked to the insurance company three times last night alone.
maximiliano furtive, formerly known as dr. bloor
@Botsplainer: It would be interesting to see the distribution of costs/case among the young–I wouldn’t be surprised to see something bimodal, with one end consisting of the seriously troubled, seriously expensive kids/young adults that you have experience with, and another end consisting of clients needing regular/semiregular outpatient therapy and/or meds, few of which break the bank.
I’d guess most of the seriously troubled clients are already in the system one way or another. I don’t really see a flood of less-troubled young adults seeking psychotherapy as something that will bankrupt the companies, particularly since copays for outpatient treatment constitute 40-60% of the total fee in some plans I’ve seen.
hoodie
The ACA no doubt has issues, but that Eschaton post was just tendentious:
As you point out, you get more than that (e.g., wellness, copays and out of pocket limits with no lifetime caps), and the negotiated pricing isn’t any more of a Mafia shakedown than belonging to AAA. You’re being too kind.
maximiliano furtive, formerly known as dr. bloor
@hoodie:
This alone makes it a good investment; whoever posted that at Eschaton has never seen a hospital bill for anything of significance. The out-of-pocket max is a very tough nut for most families, but uncovered surgery or chemotherapy is a game-ender.
FlipYrWhig
@hoodie: Jay does that a lot.
Richard Mayhew
@FlipYrWhig: he wants Medicare for all with no cost sharing and anything else is a sell-out to the man.
Hal
Kay Bailey-Hutchison was just on MSNBC saying everyone is getting notices about changes in their healthcare plan because of Obama care. When the anchor said “not everyone” and Ed Rendell said something like 5% she just said oh no, I’ve talked to people. Oh and when Chris Christie is President he’s going to get rid of Obama Care. I cant wait for this thing to kick in full speed so I can stop hearing all the stupidity from the right.
Yatsuno
@Richard Mayhew: And he wanted it yesterday. With no explanations as to how to get there from our current system to single payer without some form of transition.
Just Some Fuckhead, Thought Leader
@FlipYrWhig: This is all a big soap opera for you, isn’t it?
pseudonymous in nc
@Richard Mayhew:
As Charlie Pierce suggested, there was an assumption that insurance companies, who are being given an entirely new set of paying customers through force of law, would behave less like fuckers. With the upsells on non-compliant or wound-down plans, and stories like this of off-exchange sales to vulnerable communities, we’re not exactly seeing that assumption borne out.
FlipYrWhig
@Just Some Fuckhead, Thought Leader: Jay has a tendency. It’s not a bad set of questions to ask, but you kinda know where it’s going to lead.
fuckwit
@rikyrah: This is for ALL OF US. You gotta watch the wingnuts, they are aggressive, well-funded, and have a 50-STATE STRATEGY that targets tiny local races everywhere. Now it seems they are coming for our school boards.
The Democrats absolutely must get fucking organized, big-time, in ALL 50 STATES, at the local level. Nevermind all this TV ad buy bullshit.
Or we’ll wake up in 30 years and have no more public schools at all, and a population so horribly McUneducated that all they’ll be able to understand is FAUX “news” and how to buy shit. Believe me, the Koch’s are looking at the demographic trends, and seeing that their only hope for the future is to make sure kids grow up being unable to think.
Mnemosyne
@Hal:
I’ve been getting those notices for at least three years now. People who only just noticed either haven’t been paying attention or their health insurance company has been withholding information.
(I do get my insurance through my employer, but they’ve been sending me biannual notices about the changes since PPACA first passed, so I can’t really say I was taken by surprise this year.)
TomJF
@azlib:
That probably fell under the preventive care requirements that went into effect back in 2010 (it certainly did for the individual market where I am covered, and I believe applied to employer plans).
There is an excellent timeline here: (look for “Coverage of Preventive Benefits” under the 2010 timeline drop-down).
[P.S. to Richard Mayhew: I just found out about this thread a few days ago and am getting caught up on past posts. Great stuff, and THANKS for doing this!]
TomJF
PPACA Timeline Link meant to be included above:
taylormattd
@hoodie: Completely and utterly unsurprising from the kill-the-bill crowd.
Richard, you can’t take the PUMA or PUMA-adjacent people at face value.
NonyNony
@taylormattd:
That’s really not fair. Jay honestly didn’t seem to understand what Richard lays out here, and that’s why he was concerned about those bronze plans that look like they’re providing only a minor benefit when you don’t know about how the cost-sharing works or what was mandated by the PPACA regarding it.
As someone who has been lucky to have employer-provided insurance in one form or another since I finished college (either my own or my wife’s) I didn’t know how this worked either for folks on the individual market. So I’m actually glad that Jay asked the questions he did and got Richard’s response, because I now feel like I know a lot more about what’s going on than I did yesterday.
taylormattd
@NonyNony: No, it’s exceedingly fair. This isn’t a single isolated post. It’s now coming up on four years of this stuff.
Raven Onthehill
In the article, Jay says, “The well care visits, checkups and so forth, have no copays.” So he gets that. Now you, tell me straight that you think that these plans are going to offer more than the PPACA required minimums. Tell me straight that you think that the non-cost shared services are worth $4,200 a year.
Other than that, please to stop digging now.
Mnemosyne
@Raven Onthehill:
How much do you not want to have a baby this year? Is it worth $4,200 to you to avoid that?
How much do you want to avoid a hospital visit for diabetic shock? Is it worth $4,200 to you to avoid that?
If your appendix explodes and you end up in the hospital, what would you rather pay — $4,200 or $150,000?
The only one who can make that decision is you. If you don’t think that it’s worth spending $4,200, then don’t spend it. Pay the fine. And I’ll issue you one of those Medic Alert bracelets saying that you refuse to participate in the healthcare system so they can leave you to die in the street after you have your car accident that you can totally pay for out of your pocket.
(Edited to add link and update appendectomy cost.)
Raven on the Hill
@Mnemosyne: It doesn’t matter if you’re bankrupted by $4,200 or $150,000; you’re bankrupt, either way. If it’s only basic preventative care–why isn’t that cheap? No way $4,200 is a reasonable price.
…but it does matter to: (1) insurance companies, (2) hospitals, (3) doctors, all of whom will do better due to the insurance payments of people who are bankrupted by unexpected medical expenses.