Monday, January 06, 2014

It's Catastrophic

So it's 9:00 PM on Thursday, December 19th, and President Obama magnanimously announces that ACA-compliant Catastrophic ("Cat") plans, heretofore available only to those under age 30, will now be available to folks who can't be trusted 30-and-up. As I pointed out the next day:

"With roughly 84 hours left on the clock - and a weekend taking up most of that - carriers are supposed to price these plans for people aged, oh, 35 or 45 or 55. This, despite the fact that rates have already been reviewed and approved (or not) by the 58 different states' departments of insurance, which will now also have to review and approve (or not), these new rates."

Fast forward a couple weeks, and here's email from Aetna:
"The government recently announced Catastrophic Plan eligibility changes for members whose plans were cancelled with the implementation of the Affordable Care Act (ACA).  We want to update you on these changes and explain how we are modifying our Catastrophic Plan application process.

Previous to this modification, Catastrophic Plans were intended only for members under the age of 30.  With the government announcement, we are now offering two age categories for Catastrophic Plan eligibility.

1. Under 30 years old

2.30 years and older whose pre-ACA plan is not being renewed."
Co-blogger Pat and I have been discussing this, and have come up with some observations:

■ In checking the various quoting sites (and my own General Agent), there don't seem to be any actual rates for such plans. Which makes sense: as I noted last month, even if carriers wanted to sell these plans, they still have to price and file them with the 58 states' departments of insurance, and then feed these rates into their quoting engines (and that's just from the carriers' side: heaven only knows how will handle this).

The original announcement seemed to imply that anyone whose pre-ACA plan had been cancelled could buy one of the (allegedly) less expensive Cat plans. Sadly, this is not true: one must also file for, and be granted, a Hardship Exemption. This isn't quite as simple as it sounds. This 6-page form outlines the 14(!) different criteria under which one might qualify, including "You were homeless ... You had medical expenses you couldn’t pay in the last 24 months ... You received a notice saying that your current health insurance plan is being cancelled, and you consider the other plans available unaffordable."

And of course, it's not as if they'll simply take your word for it; no, most require additional documentation.

Once you've completed and submitted the form (via snail mail, phone, or the famously functional site), you then have to find a carrier in your geographic region that actually sells them. And good luck with that: thus far, there don't seem to be any carriers offering these plans to the 30+ crowd.

And speaking of which: why should they? Think about it from the carriers' perspective: as noted above, you have to price and file it, wait for approval, and then feed it into your quoting engine. And for what? The small group of folks who actually meet one of the criteria and might be interested in a quote? Uh-hunh. 

And about those quotes. Since there are no actual rates available for 30+ Cat plans, I ran numbers for a 27 year old. Here's the good news:

PPO Cat Plan w/$6350 deductible, then 100% (also: $40 PCP co-pays): $169/month
PPO Bronze HSA (!!) w/6000 deductible then 100% (but $6350 maximum out-of-pocket): $201/month

Not hateful, but not exactly bargain-basement, either.

As Pat pointed out, though, that's only part of the story:

"I wonder what they look like at different ages. Because of the age I can see carriers writing lower premiums based on the low likelihood of health risk [at younger ages]. Expanding the CAT plans to age 64 would have to change the entire Actuarial Value and rating process. CAT plans can lower the rates knowing that the risk pool will only comprise of 20-somethings who are in good health. Any unhealthy person under 30 will be better off with more robust coverage. Moving to offer these plans to a totally new demographic with the 3 to 1 premium factors for age will most definitely increase costs to policies for 20-30 year olds in order to cover the price point for a 61 year old."

Ooops. So much for that idea.

It's almost as if the folks in Capital City have no idea what they're doing.
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