All Armstrong and Getty Podcasts can be found here.
Notes from Today's Call:
1) Nobody Knows How Bad (or good) the Exchange Risk is Right Now
2) The 2014 Wave of Uninsured Folks Will Be Much More Painful
3) I spoke to an insurer this week who told me that only 11% of their ObamaCare enrollees were folks that were previously uninsured.
- Because health insurers are no longer permitted to ask any questions about an applicant’s health, they have absolutely no way of knowing who they are enrolling in terms of past or present illnesses or health conditions.
- Another problem is that some insurers may attract a whole lot of very sick people while others attract mostly healthy people. So Insurers are purposefully doing things to make their plans less desirable to sick people and trying to draw in the healthy by:
- Offering robust gym membership discounts and healthy eating classes
- Reducing doctor networks by as much as 75%
- Making specialists that are available to treat very expensive conditions like hemophilia, anorexia, certain cancers, etc. rare or unavailable at all
- Making their “Platinum” plans so expensive that they will be the last ones chosen.
- The next wave of uninsured workers has never done any of their own shopping the way the last wave did. The last wave was a group of entrepreneurial, self-employed folks who had already gone through all of the necessary steps to find a broker, fill out insurance forms, submit to physicals and mail in payments. They were the Type-As.
- The 50 million or so upcoming group are employees at smaller employers who have never had to do any of that.
- I predict that two-thirds of them will not even bother to sign up.
- The Congressional Budget Office projected that the Exchanges would sign up 7 million people in the first year, roughly 2 million of them transitioning from other insurance plans and 5 million of them previously uninsured. We are nowhere near that mix. We created a massive entitlement for these “uninsured” and are now learning 90% of them don't really care.
- Two people who each work 29 hours a week are paid much less than half as much as one person working 58 hours a week.
- It’s more expensive to hire two people (vacation, 401K, non-medical insurances, desks, etc.) But that’s not the only cost. In specialized jobs, each worker has individual knowledge about the job that has to be passed off to anyone else working on that job.
- The first persons to move below 30 hours are those currently working between 30 and 37 hours. According to the NY Times, that group is made up of women in a 2:1 margin.
