Pre-existing conditions => Death Spiral

Discussion in 'Too Hot for Swamp Gas' started by GT Gator, Nov 12, 2013.

  1. GT Gator
    Offline

    GT Gator Well-Known Member

    Joined:
    Apr 9, 2007
    Messages:
    1,508
    Likes Received:
    60
    Trophy Points:
    48
    Ratings Received:
    +179
    As I explained on a previous thread, my wife is a psychotherapist that works at one of Florida's largest substance abuse treatment centers. She works mostly Utilization Review as the primary clinician that interfaces with insurance companies.

    Last night, we discussed this article that describes all the potential abuse of the ACA and mental health coverage: New Mental Health Mandate Will Make Obamacare More Expensive, Increase Fraud And Canceled Policies

    This lead us to discuss what her company is doing to take advantage of all the new coverage that will be suddenly available starting January 1st.

    First, they trained all their interventionist to assist families on signing up addicts for policies that will allow them to get treatment right away. Since these policies cannot discriminate based on pre-existing conditions, the addict's family only needs to sign them up and they will immediately qualify for a 28-day inpatient substance abuse treatment. The cost of that treatment is just under $20,000.

    Here's the kicker... To qualify for treatment, the addict's family (on behalf of the addict) signs them up for a Platinum plan (about $350 a month if the addict is in their 20s). Of course, the addict can just cancel the policy as soon as they finish with treatment. Once insured, the addict can immediately be admitted for the $20k treatment. The addict is supposed to pay for the 10% copay, but the treatment center puts them on long-term payment plan knowing they may have to write it off some day.

    In other words, for a one-time payment of about $350, the addict can immediately get $20k in treatment. And, the interventionist from the treatment center are all now thoroughly trained to both market to the affect families and assist with getting the addict qualified.

    Well, that works great between now and March 31st when the open enrollment ends. But, of course, there's a loophole. Normally, the addict cannot sign up for a policy outside of the open enrollment period.

    However, after the open enrollment, they can still sign up as long as they experience a "Qualifying Life Event." There are two main Qualifying Life Events that can be exploited: (1) Loss of a job -- the addict just needs to quit his job and will immediately qualify to sign up for the Platinum Plan and get $20k of treatment for $350, or (2) Moving to a new state -- my wife's company has treatment centers in other states. So, the addict just needs to move to the new state where the new center is located and sign up for a Platinum Plan there.

    Now, this situation will not be exploited just in the substance abuse industry. I imagine we'll see the same exploitation in the rest of the mental health field and virtually all long-term, chronic illness areas (i.e., Dialysis, Diabetes management, cancer, etc.). The patient can just remain uninsured, have a "Qualifying Life Event" and then immediately get tens of thousands worth of treatment for next to nothing.

    More than anything, this type of exploitation will cause the death spiral. There just aren't enough healthy people to support people immediately getting $20k+ worth of treatment only paying in $350.
  2. wgbgator
    Online

    wgbgator Sub-optimal Poster Premium Member

    Joined:
    Apr 19, 2007
    Messages:
    21,990
    Likes Received:
    351
    Trophy Points:
    83
    Location:
    Orlando, FL
    Ratings Received:
    +1,266
    What's the benefit of moving around to different states or quiting jobs just to keep receiving treatment? Especially since a) you still have to front money (to move, buy insurance, pay for things while having no job, copays) and b) you don't directly receive any monetary benefit or profit (as it can only be "redeemed" in the form of medical care at a treatment center). I don't really see the "scam" angle here, sorry.
  3. viningsgator
    Online

    viningsgator Premium Member

    Joined:
    Apr 3, 2007
    Messages:
    5,680
    Likes Received:
    37
    Trophy Points:
    48
    Ratings Received:
    +131
    Yikes. That's a pretty ugly picture you've painted. Pretty much why we are all being required to cover stuff we don't want or need in our policies.

    On a side note how effective are these long term care centers?
  4. gatorman_07732
    Online

    gatorman_07732 Well-Known Member

    Joined:
    Jun 17, 2007
    Messages:
    29,611
    Likes Received:
    2,107
    Trophy Points:
    113
    Location:
    The Irish Riviera
    Ratings Received:
    +3,499
    Exact reason young people and many others are not going to sign up. If you get sick, just get a policy.
  5. wgbgator
    Online

    wgbgator Sub-optimal Poster Premium Member

    Joined:
    Apr 19, 2007
    Messages:
    21,990
    Likes Received:
    351
    Trophy Points:
    83
    Location:
    Orlando, FL
    Ratings Received:
    +1,266
    But you can't just "get" a policy on the way to the hospital though.
  6. GT Gator
    Offline

    GT Gator Well-Known Member

    Joined:
    Apr 9, 2007
    Messages:
    1,508
    Likes Received:
    60
    Trophy Points:
    48
    Ratings Received:
    +179
    First, there is no "scam" angle. This is all perfectly legal. It's just medical treatment centers exploiting ACA to treat as many patient as possible.

    Second, it's not to keep receiving treatments...

    After March 31, 2014, patients cannot just sign up for insurance for the first time and immediate receive treatment. They'd have to wait until the next open enrollment period (presumably October 1, 2014 through March 31, 2015).

    That's true unless you have some sort of "Qualifying Life Event" like job loss or a interstate move. If you have one of those events, you can immediately sign up for new insurance and immediately receive expensive treatments.

    Moving to other states is easy. It's as simple as renting a cheap, weekly hotel room across the street from the out-of-state treatment center and applying for insurance there (takes about a week). Then, you're immediately qualified to move into the treatment center for your 28 days of treatment. When you're done, you just move back home and cancel your new insurance policy.

    Likewise, when you're hardcore addict and facing a 28-day inpatient treatment plan, you're probably not excelling at your career. Quitting in those cases (rather than taking an FMLA leave-of-absence) is a pretty viable option.
  7. gatorman_07732
    Online

    gatorman_07732 Well-Known Member

    Joined:
    Jun 17, 2007
    Messages:
    29,611
    Likes Received:
    2,107
    Trophy Points:
    113
    Location:
    The Irish Riviera
    Ratings Received:
    +3,499
    Well, you're talking about the most extreme case. Young people don't typically get heart attack or strokes. Fact of the matter is people can pull out a policy when they get sick because they can't get refused. If you don't think people will hedge their bets you're sadly mistaken.
  8. GT Gator
    Offline

    GT Gator Well-Known Member

    Joined:
    Apr 9, 2007
    Messages:
    1,508
    Likes Received:
    60
    Trophy Points:
    48
    Ratings Received:
    +179
    28-day inpatient treatment are pretty crappy. The recidivism rate is really high (50%+).

    On the other hand, longer-term inpatient treatments (90+ days) do quite well. Unfortunately, insurers generally do not cover inpatient substance abuse treatment past 28 days.

    My wife is hopeful that will all the easy loopholes in the system right now, that insurers will finally get smart and shift the paradigm away from 28-day treatment plans to longer, 90-day+ treatment plans. I doubt that will ever happen -- it's just too darn expensive.
  9. wgbgator
    Online

    wgbgator Sub-optimal Poster Premium Member

    Joined:
    Apr 19, 2007
    Messages:
    21,990
    Likes Received:
    351
    Trophy Points:
    83
    Location:
    Orlando, FL
    Ratings Received:
    +1,266
    For treatment centers to "exploit" this situation, you would still need to find willing people to exploit. Seems like we could concoct a whole bunch of far-fetched scenarios in which people could take advantage of the system. If it does become a problem, you could you know, just amend the law so that it prevents such occurances if they actually do become a problem.
  10. QGator2414
    Online

    QGator2414 VIP Member

    Joined:
    Aug 24, 2009
    Messages:
    12,369
    Likes Received:
    125
    Trophy Points:
    63
    Location:
    Ocala
    Ratings Received:
    +419
    I just wish there was a way to increase better outcomes (curing) for addicts.

    Unfortunately 28 days is typically not going to be a good long term solution IMO.

    That said a year is not necessarily a good long term solution either.
  11. viningsgator
    Online

    viningsgator Premium Member

    Joined:
    Apr 3, 2007
    Messages:
    5,680
    Likes Received:
    37
    Trophy Points:
    48
    Ratings Received:
    +131
    Wow. That is really high. Not much bang for your buck.
  12. wgbgator
    Online

    wgbgator Sub-optimal Poster Premium Member

    Joined:
    Apr 19, 2007
    Messages:
    21,990
    Likes Received:
    351
    Trophy Points:
    83
    Location:
    Orlando, FL
    Ratings Received:
    +1,266
    Well, I wasnt thinking that. If I'm 25 and get seriously hurt rock climbing or in a freak accident and don't have insurance, you can't buy a policy on the way to the hospital either. Nor does enrolling for coverage later pay whatever debts or costs of treatment incurred prior to coverage going into force. Moreover, the enrollment windows make it extremely difficult to strategically drop and get back coverage timed to whenever you get sick, because peope can't generally strategically schedule getting ill or incuring medical expenses, nor do many policies immediately go into force.
  13. GT Gator
    Offline

    GT Gator Well-Known Member

    Joined:
    Apr 9, 2007
    Messages:
    1,508
    Likes Received:
    60
    Trophy Points:
    48
    Ratings Received:
    +179
    My wife's treatment center company regularly advertises on television and billboards. As a result, they gets hundreds of calls daily from addicts and addict's family members seeking treatment.

    When their call center tells the callers the price ($20K+), those without insurance (the majority) end up hanging up.

    For the past year, they've been telling the callers about the upcoming changes under ACA. They've kept a huge database of people who previously called but were unable to afford the treatment due to lack of insurance.

    Starting in December, the call center will start making outbound calls to those patients or families explaining how paying $350 can get them admitted. They're also going to start increase their advertising spending at the same time.

    The pool of addicts in this country is pretty freakin' deep -- much deeper than you would think.

    As for amending the laws, who the heck do you think will have the political gonads to take away treatment opportunities from addicts and other chronic disease sufferers? The one thing the DNC will be able to tout about ACA is the fact that so many needy disease sufferers are suddenly getting the treatment they needed for the first time in American history.
  14. gatorman_07732
    Online

    gatorman_07732 Well-Known Member

    Joined:
    Jun 17, 2007
    Messages:
    29,611
    Likes Received:
    2,107
    Trophy Points:
    113
    Location:
    The Irish Riviera
    Ratings Received:
    +3,499
    Again, you picking the most extreme circumstances. They'll hedge their bets and rightfully so. There is just no reason for a young person to be paying all that money every month for something most will never use. What money they do save can easily be used for a trip to the doctor or hospital. I'll be waiting for you to come back with another extreme example. you might be surprised the discount cast gets you for health services.
  15. wgbgator
    Online

    wgbgator Sub-optimal Poster Premium Member

    Joined:
    Apr 19, 2007
    Messages:
    21,990
    Likes Received:
    351
    Trophy Points:
    83
    Location:
    Orlando, FL
    Ratings Received:
    +1,266
    Well, you mentioned "death spiral" in your heading, I would assume every insuror in the country would have the "gonads" to lobby to amend the law to prevent the destruction of the insurance market. Moreover, its not exactly a tough sell to many people to deny or limit treatment to drug addicts if it means losing your own access to health insurance.
  16. GT Gator
    Offline

    GT Gator Well-Known Member

    Joined:
    Apr 9, 2007
    Messages:
    1,508
    Likes Received:
    60
    Trophy Points:
    48
    Ratings Received:
    +179
    Technically, you can buy insurance on the way to the hospital between January 1st and March 31st. After that you can't.

    Where it will really come into play is when patients suddenly get a chronic disease that doesn't require immediate surgery.

    Suppose someone of any age suddenly gets cancer. They can use the "Qualifying Life Event" loophole to sign up for insurance and get very expensive treatment right away.

    Every social worker at every hospital in the U.S. will be trained on assisting the uninsured in getting insurance and treatment. This has been already been going on for decades with the Medicare and Medicaid population. It will just be expanded to include rest of the population that don't qualify for Medicare or Medicaid.
  17. wgbgator
    Online

    wgbgator Sub-optimal Poster Premium Member

    Joined:
    Apr 19, 2007
    Messages:
    21,990
    Likes Received:
    351
    Trophy Points:
    83
    Location:
    Orlando, FL
    Ratings Received:
    +1,266
    Well, there actually is a good reason now, because you have to pay a penalty if you don't. If people bought insurance only to use it (and break even or profit), there would be no insurance at all.
  18. gatorman_07732
    Online

    gatorman_07732 Well-Known Member

    Joined:
    Jun 17, 2007
    Messages:
    29,611
    Likes Received:
    2,107
    Trophy Points:
    113
    Location:
    The Irish Riviera
    Ratings Received:
    +3,499
    You know the penalty is cheaper and the ONLY way they can collect that penalty is through tax returns. I mean you really don't have to be that cleaver no to end up paying.
  19. GT Gator
    Offline

    GT Gator Well-Known Member

    Joined:
    Apr 9, 2007
    Messages:
    1,508
    Likes Received:
    60
    Trophy Points:
    48
    Ratings Received:
    +179
    You may be right. Americans aren't especially sympathetic toward addicts. Most Americans don't view addiction as a disease. Most view addiction either a character defect or as a lack of will power or self control. I know that I felt that way until I met my wife who quickly educated me.

    So, I imagine that they'll close the loopholes on addiction treatment and maybe even other mental healthy treatments.

    However, I really doubt they'll do the same with other diseases like cancer, diabetes, kidney disease, etc.

    And, while the insurers will have massive lobbyists, they'll be counterbalanced by the physician and hospital lobby.
  20. wgbgator
    Online

    wgbgator Sub-optimal Poster Premium Member

    Joined:
    Apr 19, 2007
    Messages:
    21,990
    Likes Received:
    351
    Trophy Points:
    83
    Location:
    Orlando, FL
    Ratings Received:
    +1,266
    You seem to see this as a bad thing. Besides, I can't think of many medical policies that go immediatly into force. There's still an underwriting turnaround on issuing and collecting premium if you purchase a policy on the exchange during the enrollment period. I'm not sure how you can literally purchase coverage in the ambulance or at the hospital that will cover what you are there for. They may not reject you for your current illness going forward, but I'm not sure that means they will cover previously incurred expenses either. You can add collision to your auto policy at the scene of the accident, but that doesnt mean that they will cover the accident you just had prior to adding it. But they will cover other collisions going forward.

Share This Page