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  #51  
Old 01-14-2015, 09:17 AM
Locrian Locrian is offline
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Originally Posted by cincinnatikid View Post
Agreed, the fiscal cliff negotiations in 2013 pulled away any non-committed funds from the program. The original article also made it sound like the IA/NE CO-OP was expecting an additional round solvency funding, which I'm guessing HHS balked at when they saw how futile committing another $30M would be.
Maybe this explains the missing gov't money I menioned in the prior post?

Surely they didn't price in the loans, though, they were just expected to maintain capital levels?
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  #52  
Old 01-14-2015, 02:47 PM
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Maybe this explains the missing gov't money I menioned in the prior post?

Surely they didn't price in the loans, though, they were just expected to maintain capital levels?
http://www.npr.org/blogs/health/2015...lapses-in-iowa

Agreed, it was likely additional solvency funding that they were expecting from HHS that was disapproved. Given that the company burned through about $30M in cash in ~45 days (end of Oct to mid-Dec) and also took a $60M hit from the change to risk corridor funding, the additional funding probably wouldn't have done much for them.
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  #53  
Old 01-14-2015, 04:38 PM
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Just wondering, who will take responsibility of the mispriced or lacking of additional funding? CEO, actuaries?
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  #54  
Old 01-14-2015, 07:05 PM
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Just wondering, who will take responsibility of the mispriced or lacking of additional funding? CEO, actuaries?
Here's an interesting perspective, with most fingers pointed at the federal government:

http://drdavidcarlyle.com/
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  #55  
Old 01-15-2015, 08:05 AM
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"Here's an interesting perspective, with most fingers pointed at the federal government:"


I think the blog seemed like many lame excuses for underpricing/underfunding, especially where it relates to the 3Rs. Not sure he knows the details of the 3Rs, but the timing was clearly contained in the guidance. The Risk Corridor calc could not be completed until the Risk Adjustment was completed, so how would you expect the Risk Corridor payment earlier? A loan against it is another matter, but I don't know how eager I would be to loan money to an institution that was dependent on the government for payments, especially with a dysfunctional Congress.


The best part of the article was regarding the Transition law IMO. It really did a make the risk in the Exchange worse. It will be interesting to see how much the Risk Corridor mechanism will have to pay out. Prices for insurance were determined prior to Transition and Transition did have an impact on the risk entering the Exchange. With Congress blocking any net negatives from the Risk Corridor in a given year, I am expecting some others that counted on this payment will really be stuck.
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  #56  
Old 01-15-2015, 08:27 AM
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How would you know if price is being relatively too low/high?

For example, I use one base rate $500 for all SG plans.

Paid to Allowed ratio for each metal levels in the order of P, G, S, B
***********P***G**S***B
Company A: 0.95 0.9 0.6 0.5
Company B: 0.85 0.8 0.7 0.65

Would DOI shut down company B's paid to allowed ratio?
There could easily be more to it than paid to allowed ratio, but my point wasn't about what techniques you would use to determine if a rate was high/low/adequate/inadequate/tasty.

It was that even if techniques to make that determination were known to the regulators, the volume of new filings flooding various DOIs could easily have left them overwhelmed, and then doing just cursory evaluations, checking 3:1 age rating and other simple stuff.
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  #57  
Old 01-15-2015, 08:28 AM
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NPR had a story on this this morning. They had some analyst on who described it as a "perfect storm" of problems.

They then listed several problems, all of which were caused by underpricing.
Do you recall these problems, and if so, would you mind listing them here?
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  #58  
Old 01-15-2015, 08:30 AM
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Just wondering, who will take responsibility of the mispriced or lacking of additional funding? CEO, actuaries?
This would vary by organization. Some companies have more honest executives. Some have executives that will throw their actuaries under the bus if they need to in order to save face to their board. The public would love to blame CEOs for anything I'm sure, even underpricing, which mostly benefits the consumer.
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  #59  
Old 01-15-2015, 08:34 AM
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Do you recall these problems, and if so, would you mind listing them here?
If memory serves me (and it often doesn't), the most talked about ones were:

1) People were sicker than expected
2) High enrollment
3) They didn't get government funds

They described this as a "perfect storm", but it isn't what I usually think of when I use the phrase.

NPR also stated that the motivation behind putting COOPS in the ACA was to help serve areas with few carriers, but I think that's a complete fiction. I'm not saying it didn't work out that way, I'm saying that wasn't the impetus behind creating them.

I wasn't a fan of their reporting, but that's not new.
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  #60  
Old 01-15-2015, 08:45 AM
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If memory serves me (and it often doesn't), the most talked about ones were:

1) People were sicker than expected
2) High enrollment
3) They didn't get government funds

They described this as a "perfect storm", but it isn't what I usually think of when I use the phrase.

NPR also stated that the motivation behind putting COOPS in the ACA was to help serve areas with few carriers, but I think that's a complete fiction. I'm not saying it didn't work out that way, I'm saying that wasn't the impetus behind creating them.

I wasn't a fan of their reporting, but that's not new.
How does 1) get caused by underpricing?

I get how 2) gets caused by underpricing, but I don't see how high enrollment is a problem. Maybe operationally if they didn't have enough people working the phones or something...am I close?

Item 3) makes sense. If they're relying on government funds, like via risk corridor, then I get how that throws a wrench into their plans if they now think they won't get that funded.

I'm pretty sure the motivation for putting CO-OPs in ACA was to satisfy the people who wanted a public option. They got CO-OPs instead so they would go along with a version that could get through Congress.
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