Friday, January 17, 2014

ACA/Obamacare: No Risk Based Pricing for Preexisting Conditions. Nay, nay! Think Tobacco.

ACA takes all comers as preexisting conditions have been eliminated. Further no up-charge or risk based pricing occurs for chronic illnesses such as diabetes, heart problems, obesity and an endless list of other maladies. Many chronic conditions have current and on going expensive health-care resources devoted to their maintenance however no allowance in the form of risk-based pricing is applied.

What about tobacco use? Tobacco use is not a preexisting condition in the sense it is excluded. However it is the lone condition, a condition that preexists, that is charged an up-rate and is risk based priced. Why only tobacco? Why not up-rate and risk based pricing for the other maladies that have current and on going expensive health-care resources devoted to their maintenance?

Next comes the socio-economic aspect of tobacco users. Tobacco users are skewed to the lower end of the socio-economic spectrum. Is not ACA/Obamacare, the “intention” thereof, to provide affordable coverage for the lower end of the socio-economic spectrum?

Up-charge and risk based pricing theory aside, tobacco users, when entering the ACA/Obamacare marketplace web sites can not receive their prospective insurance quote. How so? On the “Get plan information in your area” quoting screen page within the marketplace web site, in the lower right hand corner, in the fine print, the pricing screen reads:

“The prices you’ll see are for people that don’t use tobacco. You’ll get final quotes after you complete a Marketplace application.”

Some tacit and local knowledge may shed some insight:

(1) tobacco users, as well as other potential buyers, race through the screens without reading the fine print, obtain a quote, then begin the application to find a much higher quote,

(2) the differences in opening quote viewed and application quote offered becomes a discrepancy the tobacco user has to reconcile,

(3) the higher quote is due to the up-charge for tobacco use, yet one must back track and read closely that implicitly the tobacco user will pay more and that the web site user will obtain “a final quotes after you complete a Marketplace application” in relation to tobacco use. There is no explicit discussion easily accessible to the tobacco user of the mechanics of their particular pricing/quote,

(4) however, the mechanics are that any tax credit [taxpayer subsidy] associated with the original quote remains constant and no such credit is modified or expanded due to the higher premium of a tobacco user as no tax credit [subsidy] is afforded to the up-charge for tobacco use.

The tobacco user then becomes dismayed at the price, ends the application process then begins to call the marketplace or others to find out why the premium discrepancy exists between the original quote found on the “Get plan information in your area” and the quote within the application process.

Once the applicant obtains the knowledge about the up-rate and the up-rate not being subsidized, many such applicants deem the premium unaffordable and hence the application remains pended and unfinished with no final application nor submission for coverage forthcoming.

Which raises a question: Why is the ACA/Obamacare marketplace web site not transparent in its pricing? Why not publish non-tobacco and tobacco quotes so all shoppers can see price from the very beginning? Private insurers have been publishing both rates for years on their web sites and continue to publish both rates (private exchanges aka off-exchange) from the very beginning of the price/quote process.




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