"MLR measures the share of health care premium dollars spent on medical benefits, as opposed to company expenses such as overhead or profits. For example, if an insurer collects $100,000 in premiums and spends $85,000 on medical care, the MLR is 85%. In general, the higher the MLR, the more value a policyholder receives for his or her premium dollar. The ACA requires an annual, minimum 80% MLR for individual and small group insurance plans, and an annual, minimum 85% MLR for large group plans." [1]

Source: https://fas.org/sgp/crs/misc/R42735.pdf

It is really as simple as that. Could you imagine a system in which car insurance wasn't mandated but car insurance companies were required to repair your car regardless of its preexisting condition? No smart person would preemptively buy insurance. You just wait until your get into an accident and then bring the already damaged car to the insurance company and demand a policy to repair it. No insurance company can work like that.

Insurance only works when the costs of the most expensive customers are shared among the cheapest customers. You need incentives to encourage the cheap customers to sign up or the whole system falls apart. Rejecting preexisting conditions is the old capitalist way of incentivizing people, but as soon as that is prohibited nearly all incentives disappear for a healthy person to buy into the system.

Some context for people who don't know about this:

http://www.npr.org/sections/itsallpolitics/2015/10/23/451200...

Now think about who is buying ACA plans off the marketplace. First, it's almost entirely people eligible for subsidies (86%) since the plans are cost prohibitive without them. Second, it's people who didn't previously have or couldn't get insurance, unemployed, or who aren't offered insurance through work.

You can see immediately the problem... ACA subscribers will overwhelmingly be high-cost subscribers. There aren't any healthy subscribers to ACA because healthy Americans are working and get their insurance through their employer and therefore aren't eligible for subsidies and have no reason to look at the high-cost exchanges.

The ACA is effectively cornering the market for super-high risk pool, and premiums on ACA markets will continue to rise to reflect it.

If the subsidies were available regardless of availability of a so-called "affordable" employer sponsored plan, and if they employer's contribution could be taken by an employee and applied to an ACA plan in addition to subsidies, it would fix this all in an instant. Suddenly healthy Americans would be shopping on the exchanges, fundamentally altering the risk pool and drive down premiums for everyone.

I know that adding infirmed people increases costs. The trouble is that the health insurance system of the US is not focused on individuals managing their own health insurance costs. Most Americans get their health insurance from their employers. This makes the ACA markets problematic because the limited risk pools above are further limited by the people utilizing the markets.

Does this mean that the US should ban company sponsored health insurance? Maybe. I don't know. What I do know is that the Democrats tried to stifle debate and thought on the bill. It went so far as Pelosi saying you can only know what's in the bill once you pass it [2].

Overhauling the risk pool will be huge. That's probably in the realm of repeal and replace. What I doubt we'll see, since it would probably destroy the Republicans in two years, is the total gutting of the ACA and the meaningful, unstable gap. The people wouldn't like it, nor would the business community.

1 - http://www.npr.org/sections/health-shots/2014/05/05/30982695...

2 - https://www.youtube.com/watch?v=hV-05TLiiLU

True story:

Pre-ACA, I had never been without insurance. I also have asthma. Never been a problem. No pre-existing condition issues. Then, I became a contractor and had to pay for my own insurance. The insurance refused to pay for anything asthma related. Fine; I was making enough to pay for the hideously expensive inhalers (think an epi-pen ever couple of months), but with those, the asthma was well controlled. Then I left that position and became a regular employee with employer provided insurance. Suddenly, no pre-existing condition limit. Weird.

Kinda, sorta, not really [1].

1 - http://www.politifact.com/punditfact/statements/2013/nov/15/...

The real behind-the-scenes debate in DC this month is about, first, the best mechanism to transfer funds (direct subsidies, state subsidies, Federal reinsurance pool for the sickest cases, etc ... each of which create distinct winners and losers whose lobbyists are currently out in force), and second, how much of an annual budget deficit the fiscal-hawk Republicans (now led by Rand Paul) are willing to tolerate.

The longer-term solutions have much more to do with diet, lifestyle management, and other behavioral health issues than with access to providers and drugs (e.g. look up how much of last year's medicaid/medicare budget was spent on type 2 diabetes treatment alone). Unfortunately it doesn't seem like we can tackle these issues at scale until after the current debate on affordable universal access to care is settled.

Which is why it's named after Reagan.

No...

The way to "fix" the exorbitant cost of healthcare is to allow young and/or healthy people to sign up for the bare minimum: a dirt-cheap catastrophic plan that covers the absolute basics and prevents personal bankruptcy. Unfortunately, this hasn't been done.

The state of Washington tried that in the '90s. Passed an ACA-like system. Republicans repealed the mandate, kept the preexisting conditions. Result: within a few years every single insurance company stopped selling individual health insurance in Washington.

Seattle Times article from yesterday about this: http://www.seattletimes.com/seattle-news/politics/dismantlin...

HN submission for discussion: https://news.ycombinator.com/item?id=13393537

You do that by requiring everyone to have insurance when they're well to help cover those that are sick. That's the mandate. If you try to separate them, the system collapses under the weight of even more cost.

American's don't follow the actual machinations of the senate much so it's not "politically unpopular" to do this. We think electing a President every 4 years who's a radical departure from what we had before will fix all our problems and prevent us from actually having to pay attention to the details.

Premiums in states which refused federal money to expand Medicaid generally rose much, much more than states (like CA) which did not[1].

Cynically, this was likely a designed play by Republicans to kneecap the effectiveness of the ACA by skewing the risk pool towards the elderly (who require more medical care, in general).

[1] https://www.consumeraffairs.com/news/health-insurance-indust...

It's a second-order effect; there was minimal cost control in the ACA, and plenty of room for companies to raise their prices. In a lot of ways, it was a sweetheart deal to insurance companies: they had essentially a mandate for people to buy their insurance, demand was through the roof, so they could charge more.

My evidence is that the premiums for my insurance went up even before ACA passed just in anticipation. That is exactly what the health insurance representative told us.

It was pretty clear why it happened. After ACA passed it kept going up a higher rate for us than in previous years (I have data for 3 years before).

> What evidence is there that the government itself doubled the price of the plan? The government doesn't collect the money, and it certainly goes somewhere...

Isn't it a bit disingenuous to suggest that the increase in health insurance is unrelated to legislation regulating health insurance. Or to put it another way is there evidence that government regulation didn't affect the prices and something else did?

I was born and raised in a single payer country where healthcare is free (or close to it) and we are seriously considering a move back there. If we lose our jobs here in the US we would be screwed due to my wife's ongoing mental health needs.

That depends on how you define "high deductible".

For example, let's start at https://secure.marylandhealthconnection.gov/AHCT/LoadExplore... then click "Get an Estimate". Put in a family of 3, ages 63, 61, 21, no pregnancies, no dental. Income $100k. You get a list of 21 plans. The very first one on the list has a $12,400 deductible and a $13,100 out of pocket max.

In fact, there is not a single option on this list with an annual out of pocket max below $9000.

Granted, these are family plans. Your cited number is for an individual; the number is $14,300 for a family. But note that there are plans on this list that have out of pocket maximums larger than $14,300 (e.g. "BluePreferred PPO HSA Bronze $6,550" has a $26,200 out-of-pocket max). How to reconcile that with your link, I don't know: the theory says they should not exist, but experiment says they do.

Note that I picked on Maryland because they allow you to get this data without creating an account.

In any case, most of the plans on this list would have been considered "high deductible" before the advent of the ACA.

Anyway, what's the definition of "high deductible"? The standard definition used for HSAs is $1300 for an individual or $2600 for a family, which is almost hilariously low in today's marketplace. And the maxium out-of-pocket max for HSAs is actually _lower_ than the overall caps. I have no idea how that $26,200 out-of-pocket plan is "HSA-qualified", as it's claimed to be....

> The ACA lowered the costs of people with insurance by reducing the pool of people without insurance.

That's not true. The ACA raised the costs of people with insurance by pooling them together with people who used to be uninsurable because their estimated care cost so much. This effect completely dominated the effect of adding healthy people to the pool. One reason for that is that for healthy people paying the penalties is way cheaper than actually getting insurance, so a lot of them stayed uninsured, but even that is not the full story. The main upshot is that caring for some people is _really_ expensive and the cost has to come out somewhere.

We can proceed to an argument about whether the tradeoffs were worth it, of course, whether there were other ways of achieving the laudable goal of getting rid of the preexisting condition problem, etc. But let's not pretend that the reason prices went up is just "gouging". Prices went up to a large extent because the risk structure of the insured pool skewed towards more risk.

Now there is certainly _some_ gouging going on, largely abetted by the restrictions on interstate sale of health insurance, which leads many states to have a very small number of companies providing insurance. For the Maryland case above, there are precisely 3 companies represented in the list. And only one of those companies offers PPOs. Which is why the price of the PPOs in Maryland about doubled in the last two years: no competition, why not? This is hardly a "free market" behavior, though; it's a highly regulated, in a dumb way, market, that encourages monopolist behavior. Which is what we get.

I do not understand why the US can't join most of the western world in instituting single-payer public healthcare. It would be a huge boon for small business and startups, who would no longer have to factor in medical benefits into their compensation structure and whose owners would no longer have to risk being uninsured for an extended period when they start the business.

Moreover, it's the morally right thing to do. It's shameful that the world's premier economic superpower does such a poor job of looking after its most vulnerable citizens.

I talked to the CEO of a small rural non-profit hospital and asked if ACA had helped since they traditionally wrote off a lot of the care they provided. I figured that everyone being required to have insurance would really help them stay afloat.

She said it actually hurt them because they had an influx of people coming in with subsidized insurance that never paid any portion of the deductible. So the hospital was now struggling even worse than before because they were writing off more than previously.

For me, this was a counter-intuitive result of ACA that I hadn't expected.

Insurance, as a product, was highly customizable. You could get riders and other policies to cover various risks. You see this all the time with fleet insurance. Health insurance use to be the same.

The ACA set a floor on the offerings. If you don't those features, you can get a non ACA approved plan. You then have to pay the tax penalty. Now the penalty is an oddity. There is no lean. The government removes from your refund $X until you either pay the penalty or have no refund.

I looked at such a plan. Best I found was $438. Assuming an income of > $100,000 (I thought that 2017 insurance rates were set using 2016 actual income, I was wrong), the penalty was north of $3.5k total for my wife and I. This made the ACA plan cheaper since I didn't have to worry about filing quarterly estimates since I always have a refund (I'm giving a price to the time and effort required to file).

So the subsidies make the ACA plan cheaper that the non-ACA plan. I went with that. The question I pose to society is "Should we require government, funded through taxes, handout to make medical costs affordable?"

I personally prefer HSA backed plans since I have a real asset. We've saved heavily over the years. Now I can't really do that. I think there is only one such program in Florida. It was a high premium and high deductible.

On the inverse, I see many people on the left pointing to the number of people who have signed up as the primary indication of it's success as well. Which contains it's own notes of ignorance.

Was the government not handing out fines to people who didn't sign-up? So they were basically forcing people onto the program? How could the numbers of sign-ups be meaningful then?

Also, I couldn't imagine going without health care. You have to take what you can get otherwise the risks are significant. So considering it's an essential service, saying "look at the number of people using it" as an success indicator is like saying "plenty of people are calling the firemen, clearly they are doing a good job".

There is a serious human cost here when people have their health plans doubling in cost... while the rest of the world has worked out far more functional systems. So those cost calculations should be relative to this high level reality, not some internal benchmarks between stages of mediocrity.

It seems by not deciding to be free market nor socialized that the US is getting the worst of both worlds. It's easy to blame the republicans for this but the half baked socialized system that the democrats put forward was hardly a good solution.

> Far too few people realize that much of the ACA plans' cost increases is due to Congress reneging on a government promise

Have you considered that maybe the entire Democrat plan of getting to a socialized system via cuts and slivers in one direction, knowing full well that cuts and slivers will be done in the other direction is a terrible idea?

Stop pretending that private companies can function efficiently in an ever more legislated environment, as if only more thousand page bills get passed that it will finally start working well... history has continued to indicate otherwise. Either a) embrace markets or b) go hard on selling the public on the idea of single payer public insurance.

(I should note I'm in favour of public health insurance after living with it in Canada, despite typically being in favour of markets elsewhere)

> Now, the $780 version of that plan is available to everyone

But you're making a political statement that the government should ensure sick people should have access to health care (which is fine, e.g., I support welfare). It's just odd that you think this program should be paid for primarily by middle class Americans, unlike most other government safety nets which come from taxes which mostly target higher income individuals.

- a cap on profits on insurance companies, enforcing that a certain amount of revenue is going towards client coverage

- Allowing people up to the age of 26 to stay on their parents plan

There's a couple other bits like this as well.

Costs have gone way up; they've just re-arranged where the money comes from, and punish you for not putting more money into the system.

Ensuring everyone is covered by making it illegal to not be covered is not an acceptable solution.

My taxes, and everyone else's taxes go to pay this $500 dollar difference. The Federal government didn't some how magically create the gap funds. They have to increase taxes through fines and other sources to pay this.

They've effectively hidden these costs for the subsidized individuals. I'm not paying $780 per month with a large refund at the end of the year. I'm paying a few hundred. Most people don't think about the revenue impact this has on the country. We now have to fund these subsidies. We now remove even more money from people that could have go into stocks, local economies, or services.

The plan should be $280. That's it. Not $280 + subsidies. Just $280.

Similarly, if you want to avoid the problem of expensive drugs that sell for significantly less in Canada, legally require Big Pharma to sell in the US for the lowest 'negotiated' price among all the national healthcare systems.

From the NYT: "Senate Republicans took their first major step toward repealing the Affordable Care Act on Thursday, approving a budget blueprint that would allow them to (gut the health care law) without the threat of a Democratic filibuster."

So take out the editorial "gut the healthcare law" and replace with "repeal and replace" and you have a clear reporting of what actually happened.

Two paragraphs down the actual non-editorialized reporting states the real truth; "The action by the Senate is essentially procedural"