Bottom feeders, underwritten plans and quality

This is a reminder, not all underwritten plans are junk plans.

 

The Congressional Budget Office (CBO)’s working definition of health insurance is a policy that provides reasonably protection against catastrophic medical expenses of most varieties. They’ll exclude plans with very low lifetime limits for what the insurer pays, or plans that pay a few hundred dollars per day of hospitalization or plans that only cover a particular disease class. But they will count plans that have some significant coverage of hospitalization and professional services with some type of exposure limitation.

As I have said before, when I worked at UPMC, the individual market underwritten plan was called GRIP.

GRIP is a medically underwritten plan that has grandmother (If you like, you can keep it) status. It is a good plan if you qualified for it. The network is the equivilent of the UPMC Premium network …The Gold equivalent (EPO $1000) for a perfectly healthy 40 year old male is $120 less per month than the Exchange Gold in zip code 15219….Fundamentally, GRIP, if one could pass the underwriting without any denials or upcharges is good insurance with a broad network and good pricing because the insured cohort is fairly unlikely to actually incur large claims.

Underwritten plans can be solid insurance.

The concern is that the bottom feeders will proliferate as they can offer a $30 a month plan with a $30,000 deductible, $100,000 out of pocket maximum and massive clinical exclusions. And the networks will be rented so that there is not even a significant benefit of in-network price discounts compared to cash-pay for individuals who incur some claims that are less than the deductible.

We just need to be clear in our thinking and our language when we talk about underwritten plans. Some of them are good. Some of them are okay in certain circumstances (young and male without behavioral health issues is the dominant circumstance with upside here) and some are pure junk. These distinctions need to be made going forward.






12 replies
  1. 1
    dr. bloor says:

    Nice to know they’re hard at work refining the art of jacking the premiums through the roof on unsubsidized plans for older adults.

    Commenting for a friend, of course.

  2. 2
    KithKanan says:

    All underwritten plans are junk plans if you develop an expensive condition and there aren’t adequate legal protections against recission.

  3. 3
    Steeplejack says:

    @dr. bloor:

    I sometimes feel guilty for not reading Mayhew’s posts with the intensity that I used to, but I am so relieved that I skated over to Medicare last year. My premium went from $770 (with another big increase looming) to $142 for whatever Kaiser’s Medicare Advantage plan is called.

  4. 4
    p.a. says:

    @Steeplejack:
    medicarerights.org is the site of Medicare Rights Ctr. Keeps track of Congressional Rethug shenanigans.

  5. 5
    Steeplejack says:

    @p.a.:

    Thanks, bookmarked.

  6. 6
    Fred Fnord says:

    They exclude plans with very low out-of-pocket maximums? Why?

  7. 7
    StringOnAStick says:

    My boss’s 18 year old, super healthy, super athletic son broke his neck diving through a rough wave in the ocean 2 years ago, and is paralyzed from the neck down, some arm motion, no fine hand motion. Current total cost of his care is $3.2 million; luckily they have good insurance and are a well-off family. He would have been the perfect guy to be on one of these cheap bare bones policies right up until the moment he wasn’t. These plans in general are a bad idea because of tail cases like this and because it lets the spin doctors break us from a unified population into a bunch of small groups, including bros who don’t want to pay for anyone but themselves and can’t imagine anything bad would ever happen to them.

  8. 8

    @Fred Fnord: horrendous wording on my part — updated.

  9. 9
    Hafabee says:

    The key here, for me, are the “massive clinical exclusions”. It is easy enough for a competent person to evaluate the costs of premiums, deductibles, and out of pocket maxes. As StringOnStick mentions, though, one cannot predict what health meteors will come, and it is all but impossible for a layperson to make sense of (intentionally-obfuscated?) exclusions.

    From the beginning of the ACA I have felt that it’s real value lies in the combination of (1) most everything is covered, (2) an annual out-of-pocket max, and (3) no lifetime cap on care. Now, I say that even though I am in the worst group as far as cost goes: self-employed, make too much to be subsidized, only one provider in my county, and no silver-loading (WV). So my monthly premium (59yo non-smoker) is $922 (for the cheapest Bronze non-HDHP plan, $6800 deductible, $7350 OP max). So that’s $11K per year just to play but at most another $7K or so should a meteor strike.

    Which it did, in the form of large B-cell lymphoma. And, lucky me, it hit in late November of last year, so I got to max out last year’s OP with the diagnostic tests, and then again this year with the treatment. Now, $15K (for 2 years’ OP) on top of $22K (2 years’ premiums) is a big hit, but we have an HSA from years past with enough in it. BUT it really was priceless knowing in advance that my recommended treatment was going to be fully covered.That treatment was 6 courses of R-CHOP chemo submitted at $45K (!!) each. (But the BCBS insurance knocked that down to “only” $16K each.) The “R” portion of that was a whopping $37K (knocked down to $13K)! I knew someone who got lymphoma pre-ACA and his insurance only covered the (relatively) cheaper CHOP treatment, which is not as effective. I would not have wanted to have to face such a stark economic life-or-death choice.

    Knock wood, the chemo seems to have worked, (and with comparatively tolerable side effects), but we’ll see what next week’s follow-up PET scan (my 3rd so far, at $13K each) shows.

  10. 10
    ProfDamatu says:

    @Hafabee: Just wanted to send good vibes, from another DLBCL survivor (how I hate that word, using it feels like tempting fate!). I got my diagnosis in September of 2013 – R-CHOP maxed out my OOP for 2013, and then my course of radiation did it for 2014. I’m lucky it happened when it did; I have to buy my own insurance, and I shudder to think what my renewal might have looked like had the ACA protections not come fully into effect for 2014. (As it was, my insurer didn’t bat an eye at any of the expenses; the only hiccup was denying my chemo the first time around, but that was the hospital’s fault – billing tried to get ahead of the game and submitted the pre-auth before the pathology on my tumor was back, so we didn’t yet have a 100% firm diagnosis.)

    I’m surprised to hear that pre-ACA, your friend’s insurance wouldn’t cover the Rituximab. I’m guessing that must have been quite awhile before the ACA, because I think R-CHOP has been the standard of care for many B-cell lymphomas for close to ten years, if not longer. As you know, it really was a game-changer in terms of improved survival rates. All the same, it’s got a pretty scary side effects profile, including long-term effects (along with the rest of that cocktail), so I was super glad that I only had to have 3 cycles, and I suspect that just the one was enough to “cure” me. The doctor didn’t even really consider giving me the full six cycles; I was Stage I, and just 38 years old at diagnosis, and “I don’t want you to get leukemia in 20 years.” ETA: For Stage I , 6 cycles of R-CHOP is equivalent to 3 cycles of R-CHOP plus radiation to the area of the tumor in terms of outcome.

    Best wishes for next week’s PET scan!

  11. 11
    Bob Hertz says:

    Pretty good illustration of the problems in American health care…………namely, what could possibly make the chemo treatments cost $16,000 or $45,000 each. I am certainly not blaming the patient or even the insurer.

    I have no problem with health insurers (plus Medicare and Medicaid) being the payors of last resort….but what the heck are they paying? We need a national fee schedule for drugs with no substitutes.

  12. 12
    ProfDamatu says:

    @Bob Hertz: And it’s not just the chemo. Both times I had cancer, I was given Neulasta with each round (it’s a medication that stimulates white blood cell production, to cut the risk of infection). One shot, billed at something like $8,000. In this case, I’m pretty sure the insurers are willing to pay it because it costs so much more for a cancer patient undergoing chemo to end up in the ICU with an infection. $8k still seems like an awful lot, though!

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