Should medical insurers’ individual catastrophic accounts be federally re-insured?

[Supposn]

Should medical insurers’ individual catastrophic accounts be federally re-insured?
(Similar to FDICs insurance of bank accounts).

I don't know why it’s been many years since I’ve read or heard stories of a commercial insurer evading their responsibility to pay for some extremely expensive medical treatments?
I’m speaking of the proportionately small and numerically few individual patients’ accounts that within a 365 day duration generates amounts of claims sufficient to significantly skew the insurers’ costs per patient.

I’m suggesting that within any 365 day duration, if the healthcare of a patient covered by a qualified medical insurance policy’s amount of costs to the patient and the insurer can be designated as a financially catastrophic account, it be reinsured.

Financially catastrophic accounts’ insurers should then be subsidized from the federal budget and the subsidy would be administered by the Federal Center of Medical Services, (i.e. CMS). The CMS now administers other insurers such as Medicare. (Medicare does not deliver healthcare, it is a healthcare insurer).

From the day that an account was designated as catastrophic, the federal CMS should reinsure the insurer for the next 365 days. The proportion of that reinsurance should be progressively increased as the patient’s additional healthcare costs increasingly accumulate.
When an account’s portion of reinsurance rate for additional expenditures exceeds 50%, the patient should be given the option of qualifying for Medicare, (rather than waiting for their 65th birthday).

Similar to FDIC for qualifying banks, this reinsurance would be offered to qualifying healthcare insurers, (including Medicare, Medicaid, Veteran Administration and SCHIPs insurers) that are willing to pay the reinsurance fee per patient. The U.S. Congress will set the reinsurance fee per patient with the CBO’s advice.

The entire administrative costs of reinsurance should be covered by the fees to the insurers, (who are the direct beneficiaries of this reinsurance). Due to the reduced cost to the insurers, the reduction should also be indirectly reflected within the prices of every healthcare insurance policy. The costs for these statistically rare medical catastrophes would be spread among all USA taxpayers.

Respectfully, Supposn

 

[dblack]

Absolutely. The federal government should do everything in its power to promote insurance company profits!

In other words, to answer your question: FOR FUCK'S SAKE, NO!!!!

 

[Mad Scientist]

Sounds like "Too Big to Fail" all over again.

 

[Supposn]

Sounds like "Too Big to Fail" all over again.

The concept of federally reinsuring medical accounts against individual catastrophic losses is not a case of government “bailing out” corporations unable to honor their legal commitments; (i.e. it’s not a case of “too big to fail”.
We’d be reducing the cost of insurers’ legal commitments and thus reducing the prices of healthcare insurance. Reduced prices of healthcare insurance would be a national economic benefit that subsidizes the insurance purchasers rather than the insurers.

This is not without cost. The cost of individual’s catastrophic losses would be spread among all taxpayers. The insurers of qualified healthcare policies would only be paying for this proposal’s administrative costs.
Assuming that the Affordable Care Act does enable everyone to be insured, the costs of individual catastrophic medical expenditures is eventually borne by every direct payer of medical insurance.
(In the cases of government subsidized or fully supported medical insurance, (i.e. Medicaid, Medicare, SCHIPS and VA), the direct payers partially or fully consist of all taxpayers).

If an insurer is able to evade their costs or is bankrupt, the entire costs are borne by all taxpayers. I believe it would be economically preferable that the costs of these numerically and statistically few individual catastrophic medical expenditures should be spread among all taxpayers.

Respectfully, Supposn

 

[dblack]

Sounds like "Too Big to Fail" all over again.

The concept of federally reinsuring medical accounts against individual catastrophic losses is not a case of government “bailing out” corporations unable to honor their legal commitments; (i.e. it’s not a case of “too big to fail”.
We’d be reducing the cost of insurers’ legal commitments and thus reducing the prices of healthcare insurance. Reduced prices of healthcare insurance would be a national economic benefit that subsidizes the insurance purchasers rather than the insurers.

This is not without cost. The cost of individual’s catastrophic losses would be spread among all taxpayers. The insurers of qualified healthcare policies would only be paying for this proposal’s administrative costs.
Assuming that the Affordable Care Act does enable everyone to be insured, the costs of individual catastrophic medical expenditures is eventually borne by every direct payer of medical insurance.
(In the cases of government subsidized or fully supported medical insurance, (i.e. Medicaid, Medicare, SCHIPS and VA), the direct payers partially or fully consist of all taxpayers).

If an insurer is able to evade their costs or is bankrupt, the entire costs are borne by all taxpayers. I believe it would be economically preferable that the costs of these numerically and statistically few individual catastrophic medical expenditures should be spread among all taxpayers.

Respectfully, Supposn

I really make an effort to maintain civility in my posts on here. But I can't respond "respectfully" to this shit. You're proposing even more of the corporatist poison that drives PPACA. Fuck you.

 

[Queecho Feecho]

Should medical insurers’ individual catastrophic accounts be federally re-insured?
(Similar to FDICs insurance of bank accounts).

I don't know why it’s been many years since I’ve read or heard stories of a commercial insurer evading their responsibility to pay for some extremely expensive medical treatments?
I’m speaking of the proportionately small and numerically few individual patients’ accounts that within a 365 day duration generates amounts of claims sufficient to significantly skew the insurers’ costs per patient.

I’m suggesting that within any 365 day duration, if the healthcare of a patient covered by a qualified medical insurance policy’s amount of costs to the patient and the insurer can be designated as a financially catastrophic account, it be reinsured.

Financially catastrophic accounts’ insurers should then be subsidized from the federal budget and the subsidy would be administered by the Federal Center of Medical Services, (i.e. CMS). The CMS now administers other insurers such as Medicare. (Medicare does not deliver healthcare, it is a healthcare insurer).

From the day that an account was designated as catastrophic, the federal CMS should reinsure the insurer for the next 365 days. The proportion of that reinsurance should be progressively increased as the patient’s additional healthcare costs increasingly accumulate.
When an account’s portion of reinsurance rate for additional expenditures exceeds 50%, the patient should be given the option of qualifying for Medicare, (rather than waiting for their 65th birthday).

Similar to FDIC for qualifying banks, this reinsurance would be offered to qualifying healthcare insurers, (including Medicare, Medicaid, Veteran Administration and SCHIPs insurers) that are willing to pay the reinsurance fee per patient. The U.S. Congress will set the reinsurance fee per patient with the CBO’s advice.

The entire administrative costs of reinsurance should be covered by the fees to the insurers, (who are the direct beneficiaries of this reinsurance). Due to the reduced cost to the insurers, the reduction should also be indirectly reflected within the prices of every healthcare insurance policy. The costs for these statistically rare medical catastrophes would be spread among all USA taxpayers.

Respectfully, Supposn

Most insurance companies already use reinsurance in some form, whether specific (i.e. based on an individual's total claims cost) or aggregate (i.e. based on the total claims costs for a whole block of business). There is no real point to doing this via the federal government. Not to mention it isn't even Constitutionally justified in my opinion.

However, for those of you that do think it is a good idea, there is a reinsurance provision within PPACA that will be applied in the individual market for plans whose effective dates are 1/1/2014 or later.

It works as follows:
If an individual's claim costs to the insurance company exceed $60,000, then the reinsurance entity (which isn't the federal government but an entity that gets funding as appropriated within PPACA), then the insurance company will be reimbursed 80% of that individual's claims cost that occur between $60,000 and $250,000.

Some examples:
Person A has claims of $23,000 that the insurer is liable for. The claims are below $60k, so there is no reinsurance payment.
Person B has claims of $90,000 that the insurer is liable for. The claims are between $60k and $250k, and the insurer will be reimbursed 80% x (90,000 - 60,000), which is $24,000.
Person C has claims of $400,000 that the insurer is liable for. The claims are above $250k, and the insurer will be reimbursed 80% x (250,000 - 60,000), which is $112,000.

Why does it top out at $250k? Because in the commercial market, most insurers already have reinsurance arrangements in place at attachment points of $250k or $300k.

 

[uscitizen]

Sounds like "Too Big to Fail" all over again.

The concept of federally reinsuring medical accounts against individual catastrophic losses is not a case of government “bailing out” corporations unable to honor their legal commitments; (i.e. it’s not a case of “too big to fail”.
We’d be reducing the cost of insurers’ legal commitments and thus reducing the prices of healthcare insurance. Reduced prices of healthcare insurance would be a national economic benefit that subsidizes the insurance purchasers rather than the insurers.

This is not without cost. The cost of individual’s catastrophic losses would be spread among all taxpayers. The insurers of qualified healthcare policies would only be paying for this proposal’s administrative costs.
Assuming that the Affordable Care Act does enable everyone to be insured, the costs of individual catastrophic medical expenditures is eventually borne by every direct payer of medical insurance.
(In the cases of government subsidized or fully supported medical insurance, (i.e. Medicaid, Medicare, SCHIPS and VA), the direct payers partially or fully consist of all taxpayers).

If an insurer is able to evade their costs or is bankrupt, the entire costs are borne by all taxpayers. I believe it would be economically preferable that the costs of these numerically and statistically few individual catastrophic medical expenditures should be spread among all taxpayers.

Respectfully, Supposn

Reducing the costs?
Or just reallocating the costs to taxpayers?

 

[Supposn]

Reducing the costs?
Or just reallocating the costs to taxpayers?

U.S. Citizen, if commercial insurers completely factored in the extremely rare and drastically expensive illnesses, There rates would be even more prohibitively expensive than the present extraordinary price rates.
They do factor in a portion of it and that contributes to the present extraordinary insurance prices; but much of it is not properly accounted for. Insurers depend upon lawyers to evade paying much of those for these catastrophes and/or they risk going broke.

Insurance companies crunch the numbers, and set the prices. A good portion of catastrophic medical expenses exceed the insurers’ abilities and willingness to pay and the costs are passed on to philanthropic support for medical facilities and to the government.

Government IS NOW the medical insurer of last resort. Mad scientists correctly stated that the individual enterprises are “too big and to vital to be permitted to fail”.

The costs to taxpayers, insurance purchasers and philanthropic organization would be less if a government sponsored reinsurance corporation charged each individual’s primary medical insurers per capita fees to cover their individual’s catastrophic medical treatments.
The concept of insurance is to spreads individuals’ large amounts of unusually occurring risks among many individuals for a lesser per capita cost. A federal sponsored reinsurance corporation would be the ideal application of this principle.

It is not a “bail out” of insurance companies; they will pay per capita fees for each primary insured policy holder. They are not forced to do it, but insurance purchasers are not likely to purchase a policy from a company that does not offer this additional security.

Respectfully, Supposn

 

[Supposn]

Queecho Feecho, thank you for your input.
I wasn’t aware that the industry was re-insured. What entity is sufficiently funded as to make such commitments?
Who’s the reinsurer? I suppose it’s similar to the assigned risk for states’ auto insurers? Each insurer annual contributions are proportional to their medical insurance per capita or gross insurance revenues?

You know that if the re-insurer fails, the federal government will be impelled to pay the costs?

Respectfully, Supposn

 

[Supposn]

I really make an effort to maintain civility in my posts on here. But I can't respond "respectfully" to this shit. You're proposing even more of the corporatist poison that drives PPACA. Fuck you.

D Black, I can only speak and write for myself when I express appreciation for your efforts.

Respectfully, Supposn

 

[lynn63]

There is only a small percentage of the population that incur catastrophic healthcare costs and this already figured into everyone's premiums. However the statistics indicate that the ones that fall into the catastrophic costs are low income level and seniors that account for most of healthcare costs.

 

[Supposn]

There is only a small percentage of the population that incur catastrophic healthcare costs and this already figured into everyone's premiums. However the statistics indicate that the ones that fall into the catastrophic costs are low income level and seniors that account for most of healthcare costs.

Lynn63, you’re telling me that through Medicare and Medicaid all but “a small percentage of financially catastrophic costs are covered by our federal government.

Queecho Feecho posts that the remainder of medical insurance policies are backed by a reinsurance entity that covers the primary insurer. If Queecho Feecho is correct, (and I do wish to know what entity has sufficient funds to cover reinsurance), the government will be impelled to bail them out if they cannot meet their commitment.

If Queecho Feecho is correct or incorrect, the federal government is the eventual reinsurer for all medical insurance.

Respectfully, Supposn