Channel 19

Todd Dills

Obamacare upside for independent contractor model?

| October 02, 2013

Only if insurance rates get reasonable, as it were, on a long-term basis.

Recent dynamics in the health insurance market are on display in the graphic below, from the Transport Capital Partners group’s survey of fleets over the last three years. 

Download Transport Capital Partners' most recent business expectations survey of large and small fleets by clicking here.
Download Transport Capital Partners’ most recent business expectations survey of large and small fleets by clicking here.

As implementation of the health insurance law draws nearer, the latest development being the opening of the health-insurance exchanges for early enrollment Oct. 1, the number of carriers reporting the law has made no difference to their business dropped from 36% a year ago to 8% this quarter, TCP says. Carriers are taking various steps in order to prepare for the delayed employer mandate, and strategies for dealing with increased costs, such as they are (whether having to cover more of the employed workforce or more expensive premiums for quality coverage), such strategies have shifted.

Related: Insurance options — Pay to play or pay the fine

To my mind, the most interesting thing is the percentage of carriers near-doubling — from 13 percent to 24 percent — who “anticipate opting out of the program altogether,” according to TCP, “by using independent contractors,” whether with outright leased owner-operators or by developing lease-purchase programs. 

The dynamic described there is somewhat like the one I hit on in discussion of Avik Roy’s guesses on the employer-provided health care market here, the notion that the Affordable Care Act incentivizes “skinny” coverage from employers, which could force individuals to the exchanges… 

Poll: How are the Obamacare exchanges impacting your 2014 insurance preps?

In any case, for the owner-operators among you leased to carriers, the TCP survey data could mean the future looks good for the business model, at least. However, if a large shift of employer costs for health care is shifted from employer plans to a new legion of independent-contractor owner-operators, as I started this post with, whether those IC business models will be viable will be dependent on the cost of all of that. As it is, we know well that costs in the individual market for health insurance pre-Obamacare can be prohibitive — hopefully we’ll get a clear sense of that market on the Obamacare exchanges soon.

See more on this from reporting over the last couple weeks in my post on Avik Roy’s assessment of exchange premium costs — and Max Heine’s distillation of it all over on Overdrive Extra.  

  • localnet

    Obamacare Gold plan for me and my wife… $2020.80 a month, which is equivalent to the policy we currently pay $800 a month for. $9600 a year vs $24,249.80 for Obamacare! This is f’n insane!

  • landsmith

    First, Obamacare is an oxymoron. The only thing Obama “cares” about is government control of the population. Any one who does not see this has their head firmly planted.

    This article states that Obamacare may be good for the O/O business model. It may be, but only for a very short period of time, until O/O’s realize what the coverage costs them, and work it into their rate structure.

    This train wreck, if fully implemented, will cost EVERYONE, even government and union employees who are “exempt” from the tax (as stated by Supreme Court Justice Roberts).

    The best thing any one can do with “Obamacare”, is to stay healthy by paying attention to what you eat, how much you sleep, your stress level, and getting away from the cigs and chew.

  • Todd Dills

    That is — are you currently purchasing individual plan from an insurer or in a membership-type group plan or what exactly? You can email me via tdills [at] randallreilly.com — I’m working on some reporting on rates and such I’d love to have your input on.

  • localnet

    Our current insurance is through my wife’s employer. It is a BCBS Policy 80/20 with $2000 deductible. We pay $35 for office visits and a pharmacy prescription card. No dental or eye. She pays/matches 50/50 with her employer. They take roughly $400 a month out of her pay. Now, that is said to be going up by 130+% this month due to new Obamacare regulations.

    Now, the Obamacare numbers I found came direct from a MI.gov site, their exchange calculator. Michigan is brining their exchanges on line in Jan 2014. The rates they, the state, are currently estimating are said to be low, as their are 27,000 pages of new Obamacare regulations that are still on the back burner and not figured in yet.

    Here is the MI state calculator I used http://www7.dleg.state.mi.us/perc/ I chose the Gold plan and figured in the 18% increase due to me being a smoker. I also used the highest Gold cost, as we already know these exchange prices have been low balled.

  • localnet

    Todd, I sent you an email with my contact info.

  • Todd Dills

    Good talking with you today…

  • EF McHenry

    Todd I’d like to make a very basic observation of how I see Obamacare, dumbed down as it may be.
    Obamacare(ACA) is nothing but a giveaway to the insurance industry. It is not socialized medicine as so many people like Ted Cruz(who I very much like), and many others have said.
    It compels or forces people to buy a for profit insurance policy. Ryancare would’ve done the same thing to medicare. He wanted to replace medicare’s defined benchmark method of paying healthcare providers by giving people a voucher to buy a for profit insurance policy instead. Mark my words, Obamacare’s ulitmate goal is to eventually supplant or replace medicare. The Michael Moore progressive’s of America have all been duped into thinking the exchanges would eventually turn into a single payer. That was never the plan and it will never happen. If it could’ve, then the insurance companies themselves would not be involved in the exchanges as they are now. Another words the exchanges would look and act more like medicare. The state exchanges are replete with some of the biggest health insurance companies like Blue Cross, Humana, Coventry etc.
    STATE EXCHANGES ARE FULL OF HEALTH INSURANCE COMPANIES.
    Insurance companies are dumping current customers in the name of Obamacare and racing to enroll new customers at higher rates in the exchange. The govt’s Platinum, Gold, Silver, Bronze, Blah Blah Blah plans are meant to keep prices high like localnet describes to you about that gold plan to drive customers shopping in the exchanges, who are either new to buy insurance, or were previously dumped by their original health insurance companies to essentially buyback policies from these for profit health insurance companies only at a higher rate. Like I already indicated to eventually do away with Medicare. That is the true unstated goal. It is the Goal of the majority of democrats and republicans as well. And even though shutting down the govt for some real conservative republicans might be a sincere attempt @ bravado for what is right,the reality of it is clear! The shutdown is meant to force cuts in Social Security and Medicare(which have nothing to do with the budget and thus the shutdown since they rcv funded by FICA payroll tax we all pay for)by using them as bargaining chips, which as I’ve already said is what they are actually all after!

  • EF McHenry

    Of course structurally RyanCare wouldn’t subsidize the dirt poor like the exchanges do, but all in all it does what Obamacare does; Forces People To Buy A For-Profit Health Insurance Policy.
    The Democrats and Republicans have differences in style to be sure. They even use different words like
    Free-Market, Capitalism, Freedom, Equality, Shared Responsibility etc…
    These words Mean Nothing!! The politcal stalemates are staged and meant to show conflict in principles. It’s all a tactic. There are some true believers among the ranks in Washington like Republican-Rand Paul, Ted Cruz, Mike Lee, or Democrat- Dennis Kucinich, Elizabeth Warren. But there numbers are insignificant. When Chris Matthews of MSNBC gets upset about someone or something across the street @ Fox News and says “I need to go over there and talk to Roger Ailes(the president of Fox News Channel)” I think it becomes very clear what is really up with it all. I’m sorry but our country goes in one direction. And it’s been going in said direction for almost a centuary. The only difference is how fast it goes in that direction. Regardless who gets in R or D it always keeps going in said direction. Obama is nothing but a Corporatist, as are all the rest of the Democrats, possibly even more so than the Republicans at this point. Have a nice day

  • RAinWI

    EF Henry is absolutely right, but is all part of the plan. As Sen. Reed has said, the plan is for this to fail so that we can go to a “single-payer” system like Canada and Europe.

  • Old Guy

    Obama Care isn’t what Obama wanted. He wanted single payer or Medicare for everyone. When that was opposed, he proposed a plan for a government option. But that was nixed by the Republicans who demanded that insurance companies should not be run out of business. They argued that competition in the free marketplace would keep rates down. So the rate minimizing effect of the free marketplace is what is on trial here, not Obama. As for the current tantrum demanding a delay for more study, where have they been in the three and a half years since the law was haggled out and finally passed? As for their demand for negotiating, isn’t that what all the haggling was all about at the time all the hagglers had their complaints heard and the law was passed.

  • Kurt Keilhofer

    Having companies say that they are going to be switching to O/O’s to avoid insurance costs does not mean that freight rates will increase one cent. And since the companies will no longer have those employees or equipment, may even encourage them to cut rates!

  • jimmy the trucker

    cool no new taxes, lets see..2.8% more this year, and osamacare is going from $602 to $1194 with less coverage.

    osama said that the health ins companies needed to return the majority of the premiums back to the members care, the only way to do that is to raise prices to cover costs. not EVEN basic economics.

    w are going down the path to communism step by step and no one is paying attention to history.

    my nebraska congressman are full of BS and talk, of course those “gentlemen” are covered. they would be caught dead with the crap they are handing out.

  • EF McHenry

    Are you kidding me?? What in the world are you talking about? You say Obama wanted a single payer system like medicare. First off NO HE DIDN’T!! You say then he wanted a govt options but republicans nixed it so we got what we got with Obamacare as it is now!! WOW AND WOW !! LISTEN TO YOURSELF MR!! According to you Obama is fighting tooth and nail to retain some he never wanted. Even worse it would me that democrats are also fighting to retain something republicans manipulated them into accepting.

    There you have it folks! It’s people this that these con-artists in Washington can do what they do!! This guy is still duped and has no idea what is up!! Look I want to be nice about it all, but please WAKEUP MR! The republicans are just as bad!! DO NOT FIGHT AND SUPPORT THIS TWO PARTY SYSTEM! MY ADVICE DECLARE POLITICAL NEUTALITY AND FIGHT ISSUE BY ISSUE!!

  • Chris Vintson

    I can’t believe the header reads it is a good fit, well it is not! to make a long story short OBAMA CARE my awesome insurance is $214.00 a month OBAMA’S went up to $597.03 a month and pays for NOTHING.

  • Chris Vintson

    Toddd Dill, buy a Truck and Trailer, get your on Authority and you will THROW UP EVERY DAY, I say this only because everybody has there hands in your money. from Brokers, Insurance co, FMCSA ,Every State in the union wanting some money , the list goes on, and now Obama, Impeach him thats what needs to happen he is killing this Country.

  • localnet

    Yes, Obama just recently told a bunch of his fans that single payer is the goal. Pelosi and Reid said the same a few weeks ago, single payer is the goal.

  • EF McHenry

    Wow, do you really even know what to believe? You sound as confused as every other idiot out here that screems socialism and communism when talking about Obama, Obamacare, democrats, Harry Reid or Pelosi. Let me try this for the last Time!

    OBAMACARE IS NOT SOCIALIZED MEDICINE AT ALL!!!

    OBAMACARE IS THE FORCED PRIVATIZATION OF THE HEALTH INSURANCE INDUSTRY AT ODDS WITH AND IN CONFLICT WITH MEDICARE!!

    THERE IS NOTHING GOVERNMENT ABOUT THR STATE EXCHANGES RECEIVING FEDERAL FUNDS TO ONLY HOUSE THE BIGGEST INSURANCE COMPANIES IN AMERICA. THE SO-CALLED GOVT PLATINUM, GOLD, SILVER AND BRONZE IS NOT REALLY GOVERNMENT! THEY WILL ALL BE PLANS UNDER ANY OF THE BIG INSURANCE COMPANIES! THERE IS NOTHING IN OR ABOUT THE EXCHANGES THAT HAVE A MEDICARE STYLE OPTION OR ANY OTHER KIND OF REAL GOVT OPTION!! THIS IS FORCED BUSINESS FOR THE MULTIBILLION $$$ INSURANCE INDUSTRY OR PENALTY!!

    THE END GAME GOLD IS TO DESTROY SOCIAL SECURITYAND MEDICARE AND SINCE THEY CAN’T GETIT DONE WITH A GOOFY GUY LIKE GEORGE W. THEY ARE TRYING TO LAY THE GROUNDWORK WITH GOOFY OBAMA!! AND IF HILIARY WINS SHE WILL TRY TO FINISH THE JOB!! IT WAS A DEMOCRAT TWICE TIMES THAT GAVE US SS & MEDICARE, AND THE POWERS TO BE FIGURE A DEMOCRAT WILL DO BEST TO DESTROY EM BOTH EVENTUALLY!!
    PULL YOUR HEAD OUT OF YOUR______ MR!!

  • bobloblaw

    Piglousy said”We have to pass it before we can find out what is in it. No debate. Less than 12 hours to review 27000 pages and then shove it down out throats. If it is so great why is the ruling class exempting theirselves, friends, and contributors

  • localnet

    Put a cork in it, you look like an idiot. Obama has stated many times publicly that this is the pathway to single payer socialized medicine, which is his ultimate goal.

    The socialism side of this Obamacare mess is the collection of all of our very personal information and the tens of thousands of pages of regulations. You do know about regulations and the economic toll they take, don’t you? What are regulations used for now a days? They are used to control groups of people and to destroy competition. This is the dirty little secret of Obamacare and his hoped for single payer system after the players on the field are completely crushed and destroyed. This has been Obama’s MO for years. Maybe you should get your head out of YOUR ASS and open your eyes.

  • Todd Dills

    Chris, I hear what you’re saying. I’d be interested in hearing more about what your current insurer’s been telling you on rates for your current plan, likewise what your rates might be in the exchanges if you’ve used any of the calculators — I’ve heard different examples since I wrote the above, most as you note are seeing premium costs go up. You can get in touch via tdills@randallreilly.com. I’m working on a story about how all of this is shaking out.

  • Del Ray Johnson

    Todd, I would really love for you to post facts not fiction about Obamacare particularly what are the numbers. If localnet is correct what is the big deal just keep your prior coverage and pay the $9600? This is bullet point #1 on your survey. Next if Obamacare imposes a new tax to cover its cost then why should my prior medical insurance go up since Obamacare pays for itself, i.e. $24,249.80? I thought Obamacare required companies to extend medical coverage and mandated people to get insurance, which is PAID for as the Supreme Court found as a tax so what is all this noise about except companies do not want to provide medical insurance? Am I correct rich republican owners of businesses like, i.e. a trucking company owner paying 24CPM do not want to pay for medical insurance out of the huge profits gained on the backs of others (capitalism)? So these uninsured people ended up in the emergency room where we the taxpayer’s have to foot the bill? Am I correct?

  • Del Ray Johnson

    Todd, I am curious you are working on a report ? I will bet my last nickle mark my words when the smoke clears localnet and everyone else’s healthcare rates are going up because the insurance companies who are now mandated to cover kids age 26, pre-existing conditions, etc. are going to pass those costs on to everyone across the board! And when people see the republicans unfortunately were correct this mandated healthcare will be expensive for everyone. And mark my words the favorable current rates will move toward the gov’t plans call it a coincidence! Check this out if your current healthcare provider raises your rates how can you dump them? when you will be mandated to buy gov’t plan just as expensive go figure!

  • Del Ray Johnson

    Chris, you are paying for all those people with pre-existing conditions that now the insurance companies must take on but like I have said on other posts what about the PRICE OF SHIPPING FREIGHT!?

  • Del Ray Johnson

    And if you do not think healthcare rates are not going up think about if the people now mandated to get it make minimum wage Walmart employees $7.25 how are they going to purchase Obamacare Gold Plan. Even if one conceives a discounted rate for low income employees (insurance company’s income +) that would required a discounted cost of actually providing the medical services (insurance company’s paying doctors, hospitals, etc. expense -) something is wrong here? The federal government should not be in the business of providing healthcare just last week or seems like every week social security is on the brink on bankruptcy!

  • haller

    There is no such thing as Obamacare. Your figures are wrong and you are a member of the republican party, your policy is bash, bash, bash… What your saying is Federal Funded Ins. will cost you $466.34 per week!!! Do you think the rest of us are stupid?
    haller

  • Todd Dills

    I hear you on that, Kurt. Why I said “only if…” — probably should have added a couple few more qualifiers about rates of a different sort than insurance.

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