Buying/Selling Insurance Across State Lines

[MDM4AU 332]

So many think this will help competition and in return bring down premiums, but it hasn't really done that in the areas it's been tried. If Acme Insurance of New Mexico offers coverage in Alabama, or Georgia, or New Jersey, it won't be worth much without a network of providers and facilities. Without contacted discounts, they won't compete very long in AL, for sure.

In AL, BCBS has the largest network with 96-98% of the providers and 100% of the hospitals. These providers and facilities have agreed to a discount off their rates for all the people with BCBS coverage. The second largest carrier in AL is United Healthcare and they don’t have as large a network as BCBS. Part of the reason is they don’t have the contracts with the providers/facilities. They can’t offer as many members to the providers/facilities to warrant the providers/facilities acceptance of their discounts. Providers often don’t like dealing with them and site their service and promptness of payment. There are others but you get the gist. At one time recently, UHC didn't have UAB in their network. There us a third carrier with a footprint but none of the others have really been able to come in and compete (Humana, Aetna, etc.)

If Acme comes in and doesn't have a network but says they'll pay anyone you see, they won't have the discounts of say, BCBSAL.  They may be able to offer lower premiums at first but, over time they'll not be able to stay lower if their paying full-price (if the provider even accepts the insurance) for a procedure and Blue is paying 50%-70%.

Is there some sort of legislation Trump or anyone else is planning on using to make any difference in this?

[icanthearyou 4,462]

Good question.  Could the networks be considered a form of collusion, designed to limit competition?

[MDM4AU 332]

No, the providers don't like having to contract with insurance companies. I've spoken to several providers that absolutely hate dealing with all the IC's. They aren't working with the IC's to keep out competition. They work with them to keep their clientele. I'm sure many of them do it for the "decency" of it, too. They can't treat people if they won't come in their office due to the cost. Some providers have gone to concierge medicine. They have enough "rich" clients they can do it and not have to deal with IC's at all. 

 

[TexasTiger 12,849]

2 hours ago, MDM4AU said:

So many think this will help competition and in return bring down premiums, but it hasn't really done that in the areas it's been tried. If Acme Insurance of New Mexico offers coverage in Alabama, or Georgia, or New Jersey, it won't be worth much without a network of providers and facilities. Without contacted discounts, they won't compete very long in AL, for sure.

In AL, BCBS has the largest network with 96-98% of the providers and 100% of the hospitals. These providers and facilities have agreed to a discount off their rates for all the people with BCBS coverage. The second largest carrier in AL is United Healthcare and they don’t have as large a network as BCBS. Part of the reason is they don’t have the contracts with the providers/facilities. They can’t offer as many members to the providers/facilities to warrant the providers/facilities acceptance of their discounts. Providers often don’t like dealing with them and site their service and promptness of payment. There are others but you get the gist. At one time recently, UHC didn't have UAB in their network. There us a third carrier with a footprint but none of the others have really been able to come in and compete (Humana, Aetna, etc.)

If Acme comes in and doesn't have a network but says they'll pay anyone you see, they won't have the discounts of say, BCBSAL.  They may be able to offer lower premiums at first but, over time they'll not be able to stay lower if their paying full-price (if the provider even accepts the insurance) for a procedure and Blue is paying 50%-70%.

Is there some sort of legislation Trump or anyone else is planning on using to make any difference in this?

Thanks. It's a way to eliminate state regulation. The states that have the strongest regulation of insurance companies have had the lowest increases.

[alexava 6,973]

On 3/9/2017 at 6:57 PM, MDM4AU said:

No, the providers don't like having to contract with insurance companies. I've spoken to several providers that absolutely hate dealing with all the IC's. They aren't working with the IC's to keep out competition. They work with them to keep their clientele. I'm sure many of them do it for the "decency" of it, too. They can't treat people if they won't come in their office due to the cost. Some providers have gone to concierge medicine. They have enough "rich" clients they can do it and not have to deal with IC's at all. 

 

My dentist was this way. I had kids and changed dentists because i didn't want to eat that much cost. Then his daughter joined his practice. In efforts to drum up enough clientele to support two DRs instead of one, his office called me. They said "Sir our records show it has been two years since you and Alex had your teeth cleaned." No maam, we had them cleaned yesterday actually."  "See, I couldn't justify paying for two cleanings up front and getting half my money back after you file the claim when i can go get this same service and not pay a dime."  She said she understood but they were now contracted with Delta Dental and would love to have us back. TOO LATE. Plus he was a Bammer kicker about 40 years ago.

[AuburnNTexas 7,143]

Simple solution one government regulation that no charge for any service can be more that 15% higher than the current lowest negotiated price. Hospitals and Doctors should have a known rate structure like any other business. So If I go to a hospital that charges $500.00 to BCBS and that is lowest cost negotiated with any provider  then the most that hospital can charge me or another insurance company is $575.00  With that one regulation selling across state lines would than be competitive.

[AUDub 11,147]

I posted a video in the Smack forum from John Oliver. This comes up around the 14 minute mark.

[icanthearyou 4,462]

Rising healthcare costs is a problem that will never be solved until, the political will rests with the interests of the people and not, with the limited interests of those who have the power to lobby, donate, bribe.  A corrupt government serves primarily those who can afford to purchase influence and secondarily, those who represent a loyal voting bloc.

Our government is for sale and therefore, fundamentally corrupt.  BOTH parties.

[icanthearyou 4,462]

On 3/9/2017 at 6:57 PM, MDM4AU said:

No, the providers don't like having to contract with insurance companies. I've spoken to several providers that absolutely hate dealing with all the IC's. They aren't working with the IC's to keep out competition. They work with them to keep their clientele. I'm sure many of them do it for the "decency" of it, too. They can't treat people if they won't come in their office due to the cost. Some providers have gone to concierge medicine. They have enough "rich" clients they can do it and not have to deal with IC's at all. 

 

I'm not so sure.  The largest providers seem to play along willingly.

[maxwere 82]

On 3/9/2017 at 5:03 PM, MDM4AU said:

So many think this will help competition and in return bring down premiums, but it hasn't really done that in the areas it's been tried. If Acme Insurance of New Mexico offers coverage in Alabama, or Georgia, or New Jersey, it won't be worth much without a network of providers and facilities. Without contacted discounts, they won't compete very long in AL, for sure.

In AL, BCBS has the largest network with 96-98% of the providers and 100% of the hospitals. These providers and facilities have agreed to a discount off their rates for all the people with BCBS coverage. The second largest carrier in AL is United Healthcare and they don’t have as large a network as BCBS. Part of the reason is they don’t have the contracts with the providers/facilities. They can’t offer as many members to the providers/facilities to warrant the providers/facilities acceptance of their discounts. Providers often don’t like dealing with them and site their service and promptness of payment. There are others but you get the gist. At one time recently, UHC didn't have UAB in their network. There us a third carrier with a footprint but none of the others have really been able to come in and compete (Humana, Aetna, etc.)

If Acme comes in and doesn't have a network but says they'll pay anyone you see, they won't have the discounts of say, BCBSAL.  They may be able to offer lower premiums at first but, over time they'll not be able to stay lower if their paying full-price (if the provider even accepts the insurance) for a procedure and Blue is paying 50%-70%.

Is there some sort of legislation Trump or anyone else is planning on using to make any difference in this?

Google Indemnity Plans.

Is it fair to say a some providers would switch from 60% UCR to 65% UCR if offered by an out of state competitor?  Is it reasonable to think that there is room from specialization in healthcare and administration?  Is it reasonable to assume BC&BS would re-examine their operating model in a way they wouldn't otherwise?  Does ALFA dominate the AL property market because they provide a high level of customer service?

I'd say competition will help, particularly with administration costs.  However, there are several 800 lb cost driving gorillas that won't move an inch: tort/malpractice, excess utilization, community rating, individual mandate.  To name a few.  I haven't heard these addressed by the admin.

 

[maxwere 82]

6 hours ago, AuburnNTexas said:

Simple solution one government regulation that no charge for any service can be more that 15% higher than the current lowest negotiated price. Hospitals and Doctors should have a known rate structure like any other business.

They do.  Published every year.  (So did the Soviets.)  X*(an arbitrary average) does not prevent prices from rising relative to all other goods and services.

https://www.healthcare.gov/glossary/UCR-usual-customary-and-reasonable/

[maxwere 82]

On 3/9/2017 at 6:38 PM, icanthearyou said:

Good question.  Could the networks be considered a form of collusion, designed to limit competition?

Depends on how they are legislated (what are the rules?).  They shouldn't be.  Most providers want 100% of reasonable and customary (UCR) if they could get it.  Most forms of capitation work out to be between 50-65% UCR.  So, providers look to load up extra patients to cover their expenses (likely higher than 60% retail).  To us, that's called a wait time.  Showing up at the window with 90-100% retail cash (+ not have to deal with the IC) should bump you to the front of the line.  If it doesn't, then what more proof do you need of collusion?

[AuburnNTexas 7,143]

1 minute ago, maxwere said:

They do.  Published every year.  (So did the Soviets.)  X*(an arbitrary average) does not prevent prices from rising relative to all other goods and services.

https://www.healthcare.gov/glossary/UCR-usual-customary-and-reasonable/

Published but not adhered to. If you have insurance when you get the bill from the Doctor or Hospital it shows you what they charge then what your insurance paid and the difference is discounted as negotiated price. What they charge is often 2 and 3 times what the insurance company pays. Sometimes even more. By putting a cap on how high above lowest negotiated price a few things will happen lowest negotiated price will probably go up some during next cycle but basically everybody will get close to same rate allowing things like having policies across state lines. It is still free market because as government is not setting the lowest price just a cap above how much above lowest price that is much different than what happened in Soviet Union.

This in of itself will not stop the rising price of medical care there are lots of other factors unneeded tests, litigation, in some areas two many hospitals and beds so low occupancy. 

[maxwere 82]

1 minute ago, AuburnNTexas said:

Published but not adhered to. If you have insurance when you get the bill from the Doctor or Hospital it shows you what they charge then what your insurance paid and the difference is discounted as negotiated price. What they charge is often 2 and 3 times what the insurance company pays. Sometimes even more. By putting a cap on how high above lowest negotiated price a few things will happen lowest negotiated price will probably go up some during next cycle but basically everybody will get close to same rate allowing things like having policies across state lines. It is still free market because as government is not setting the lowest price just a cap above how much above lowest price that is much different than what happened in Soviet Union.

This in of itself will not stop the rising price of medical care there are lots of other factors unneeded tests, litigation, in some areas two many hospitals and beds so low occupancy. 

It won't keep prices from rising.  (It might falsely convince people temporarily that prices have fallen.)

Whats missing is an element of patient choice in the price system.  Many of the services doctors "order" for their patients are CYA.  How many times have you heard, "it doesn't look like X but I'm ordering a CT scan just to be sure"?  As opposed to, "if you like, you can purchase the extra irradiating assurance of a CT scan for $2500".

[AUDub 11,147]

18 minutes ago, AuburnNTexas said:

..two many hospitals and beds so low occupancy. 

Come see St. V's East. My dad is a triage RN there. They routinely run out of beds and have to sleep patients in the ER. Problem was Carraway shutting down and Trinity moving to Grandview. Al of the downtown hospitals are routinely on divert.

My hospital, Children's, broke several census records in the last few weeks, but we're a special case. 

[AuburnNTexas 7,143]

1 minute ago, maxwere said:

It won't keep prices from rising.  (It might falsely convince people temporarily that prices have fallen.)

Whats missing is an element of patient choice in the price system.  Many of the services doctors "order" for their patients are CYA.  How many times have you heard, "it doesn't look like X but I'm ordering a CT scan just to be sure"?  As opposed to, "if you like, you can purchase the extra irradiating assurance of a CT scan for $2500".

I don't think we are disagreeing as I mentioned in my post there are multiple other factors in my post. I mentioned unneeded tests, to many beds in a region so have to compensate for unused beds, Litigation and you mentioned other things. It helps to have a true baseline but that is all my suggestion would do give a true baseline. You are correct also so far just like the old administration nothing is actually being done to address the real reasons for high costs. Paying subsidies as they did on ACA or Tax Credits  as in latest iteration out of Republicans does not truly address costs. 

[maxwere 82]

2 minutes ago, AuburnNTexas said:

I don't think we are disagreeing as I mentioned in my post there are multiple other factors in my post. I mentioned unneeded tests, to many beds in a region so have to compensate for unused beds, Litigation and you mentioned other things. It helps to have a true baseline but that is all my suggestion would do give a true baseline. You are correct also so far just like the old administration nothing is actually being done to address the real reasons for high costs. Paying subsidies as they did on ACA or Tax Credits  as in latest iteration out of Republicans does not truly address costs. 

 So you agree that solving complex economic price systems with arbitrary 15% caps and floors is both dilettante and counter-productive?

[AuburnNTexas 7,143]

17 hours ago, Bigbens42 said:

Come see St. V's East. My dad is a triage RN there. They routinely run out of beds and have to sleep patients in the ER. Problem was Carraway shutting down and Trinity moving to Grandview. Al of the downtown hospitals are routinely on divert.

My hospital, Children's, broke several census records in the last few weeks, but we're a special case. 

My statement about to many beds is not true in every locale but is very true in some locations. Medical costs and services are different in many regions it is one of the reasons Insurance is sold by State and not across the board, even there it doesn't always take into account the difference between Urban, Suburban, and Rural medical costs and facility availability.  So far all the government options are a way to get people to buy Insurance but nothing about addressing underlying issues. Nothing around preventive care shots, 2 dental visit a year for cavity and teeth cleaning, etc.

[AuburnNTexas 7,143]

3 minutes ago, maxwere said:

 So you agree that solving complex economic price systems with arbitrary 15% caps and floors is both dilettante and counter-productive?

No I think it is one small piece of the puzzle.

[alexava 6,973]

I thought nobody knew how complicated healthcare was?

[maxwere 82]

13 hours ago, alexava said:

I thought nobody knew how complicated healthcare was?

Socialists always give themselves away by simplicity of thinking.  See the Alt-right.

[homersapien 11,371]

15 minutes ago, maxwere said:

Socialists always give themselves away by simplicity of thinking.  See the Alt-right.

So, are you saying Trump is a socialist? 

[maxwere 82]

Just now, homersapien said:

So, are you saying Trump is a socialist? 

In many ways, yes.  'Building a wall' is textbook socialism.  Take it to its logical ends and its Luddite.  He's not consistently principled to be considered anything but a pragmatist.  "You all can have your social theory, I'm going to do what works... common sense, simplicity."

Beneath the surface of America, in what could be legitimately considered racism, is essentially job insecurity.  Immigration, reconstruction, globalization... etc.  It's an entitlement mindset and its all over the populist alt-right.  Of course, when you see it this way, the division is really socioeconomic, not racial.

[MDM4AU 332]

19 hours ago, maxwere said:

Google Indemnity Plans. I'm somewhat familiar. You just don't see them much anymore. Especially around here when everyone is so used to copays and low deductibles and little out-of-pocket expense. HSA's are truly the way to go. 

Is it fair to say a some providers would switch from 60% UCR to 65% UCR if offered by an out of state competitor?  Sure, SOME may but not many will choose to contract with a company they don't know. I'm not sure the extra 5% is worth it for the extra paperwork and credentialing, etc.This will lead to a small network and trouble competing with BCBSAL here. It would definitely take some time before this could work and I don't think Americans are patient enough.  Is it reasonable to think that there is room from specialization in healthcare and administration? Sure, that's reasonable...  Is it reasonable to assume BC&BS would re-examine their operating model in a way they wouldn't otherwise? No, not at this time.  Does ALFA dominate the AL property market because they provide a high level of customer service? I'm unfamiliar - I'm with State Farm...;)

I'd say competition will help, particularly with administration costs. I'm not so sure. HMO's manage costs better but no one really wants to go with an HMO because of how they operated 20-30 years ago. And I'm all for competition. Obama care has failed miserably in that area because many of the regulations and measures they implemented (see Risk Adjustment) has done nothing but help the Big Guys already entrenched in a a market.  However, there are several 800 lb cost driving gorillas that won't move an inch: tort/malpractice, excess utilization, community rating, individual mandate.  To name a few.  I haven't heard these addressed by the admin. Agreed. That's why I have always contended that "healthcare reform" was never really meant to reform the cost of healthcare but to reform the insurance industry while never addressing the actual things that insurance companies are actually paying for...healthcare. And, community rating went away with ACA. 

 

 

[maxwere 82]

54 minutes ago, MDM4AU said:

HSA's are truly the way to go.

Why do you say that?  (I agree with you in that its a step forward, just want to know why you came to that conclusion)

You are arbitrarily assuming how network providers would act given different price structure.  The point is, aside from non compete agreements, there is a price at which they would accept different networks.  Also, if BCBS loses network providers or customers you can be sure they will adjust rapidly.  ALFA is rhetorical, but you made the point.  Alabama company, very hometown, local good customer service etc.  ...and no, they hardly have AL majority market share, they don't even have you.  You went out of state, probably b/c of price.

HMOs were built on the fallacy (among others) that increasing preventative care would decrease more costly long term care.  It destroys the doctor/patient relationship.  That turns out to be a pretty central relationship in the health of the whole thing.

Regulation always helps the big guys restrict competition.  It's designed to.  How much did Humana, UHC, Cig spend on lobby in 2008-2011?

Quote

Under the ACA,

premium rates may vary for non-grandfathered individual or small group policies only with respect to:

}

Individual or family coverage

}

Geographic area

}

Age (limited to a 3-to-1 factor)

}

Tobacco use (limited to a 1.5-to-1 factor)

A state may further restrict use of rating factors, as long as the state law does not “prevent the application” of the federal

law. For example, a state may choose not to allow rating based on tobacco use

Rest assured, the community rating concept is alive and well.  In fact, these aren't insurance companies, they are healthcare companies.  Fundamental to insurance is underwriting discrimination and risk classes.  (Well people will never want to pay for sick people... they will act against the interest of the whole)  This gets reflected in the cohort experience.  Think of these categories as cells.  The concentration is always skewed to the sickest boundary of the cell.  (Sorry if inside baseball, but its actually pretty interesting phenomena.)  Bottom line is the more cells you have the greater value it is for everyone (eventually some of the sick will actually work harder to improve to a better cell... the well don't go uninsured).  You can test this out with property insurance.

This necessarily means that we have to come to grips with the fact than a person with a pre-existing condition has a higher present value medical liability than those without.  That liability is unfunded.  Government does a poor job of disclosing UALs (they never do).  ...whole other conversation.  BUT, I personally believe evidence suggests that retail healtcare costs are between 95-99x inflated.  So even if the insurance company negotiates 66% discount, the prices are still 5-10x what they should be..

This whole thing rests with the providers IMO.  If doctors would get some entrepreneurial sense (most don't have it), many would bail to cash only general practice pretty fast.  This would create the needed competition overnight.  The future as is, sees them take home less and less.  Skyrocketing med school debt, admin, lower reimbursements etc.  Remove the third party all together.  (HSAs work to this effect btw)