Actuarial tidbits: health care

 

More for less

 

A lot of folderol floating about on health care the past couple of weeks. I thought I’d hit it all at once.

  • McDonald’s went through the media spin cycle because it wanted an exemption from the minimum 85% loss ratio requirement for its health plan. Their employees can buy something called mini-med, which is a policy with so-low-they’re-silly ($2K) limits. These policies exist mainly so Mickey D’s can tell applicants that their job comes with benefits beyond that of wearing a paper cap ringed with arches. Above, I cop the graph Kevin Drum built based on numbers that The Incidental Economist ran. The red bar is how much McDonald’s employees pay for coverage today. The other five bars are how much they would pay for coverage under Obamacare, the difference being the current limit is $2,000 while under Obamacare, benefits will be limitless. NY Times makes the same point.
  • To show no one is picking on McDonald’s, USA Today notes that 29 other companies, including Jack-in-the-Box, have similar plans and seek similar exemptions.
  • More worry that consolidation of hospitals drives up health care costs. I’ll keep saying Obamacare boils down to hospitals vs. insurers until someone listens.
  • Group health cost to rise 8.8% next year, most since ’05. And federal employees’ premiums will climb 7.3%. Oddly, when coverage expands, prices do, too.
  • Obamacare sez you can’t discriminate against kids when rating. To avoid adverse selection, some health insurers are refusing to insure kids at all. I can see the concern, but wonder how much those companies are thinking about reputation risk, viz.: Congressman: “Why won’t you insure this child?” Health CEO: “He gets sick too much?” Gone viral, will that help business or hurt it – especially since the company will be forced to write that same risk in 2014.
  • Another alternative is to dump the business altogether.
  • A lot of people think the solution is to dump the current “solution.” Their day in court approaches, but there’s been an early defeat.
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