RIP off in healthcare

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The average doctor sees about 15 patients a day. That means that 4.5% of the US population is seeing a doctor every single day.

Your second statement doesn't follow from your first one. Doctors don't work every day. All doctors don't see patients. Outside of a doctor's office setting, when a person needs medical care, they are usually seen by many doctors. Despite my little quibble with the stat, we seem to be very much on the same page with this.

Frontline has a good episode on the trade-offs of various health care systems around the world (streamable online at the link below or on Netflix):

http://www.pbs.org/wgbh/pages/frontline/sickaroundtheworld/

Japan's system fixes the rates extremely low ($50/night for a private hospital room), which is short-term great for the patients, but is brutal to hospitals and the system.

Edited: Deleted my post that repeated what others had said about how long an x-ray takes to add a post that contained useful information.

scotto777 said:   "The expensive technology deployed on Janice S. was a bigger factor in her bill than the lab tests. An ďNM MYO REST/SPEC EJCT MOT MULĒ was billed at $7,997.54. Thatís a stress test using a radioactive dye that is tracked by an X-ray computed tomography, or CT, scan. Medicare would have paid Stamford $554 for that test.

Janice S. was charged an additional $872.44 just for the dye used in the test. The regular stress test patients are more familiar with, in which arteries are monitored electronically with an electrocardiograph, would have cost far less ó $1,200 even at the hospitalís chargemaster price."


The article goes on to say that the cheaper stress test would have been more than sufficient, however the hospital ordered the more expensive test to drive revenues and pay for their machine.
With all due respect to the author, he doesn't know what he's talking about. Stress electrocardiograms, while certainly much cheaper, are used for different things from nuclear tests or stress MRI's. While there is some degree of overlap (meaning that some conditions can be diagnosed with either), there are actually way more differences in their diagnostic capabilities than similarities. Hence, depending on what they were concerned about, running [pun intended] the patient through a stress ECG could've amounted to a complete and utter waste of time and money. The author himself admits that he knows nothing about the specifics of the patient's condition, so how in the world can he say anything about the appropriateness of any of the tests that were run?

It is also possible, if not likely, that the author doesn't know the difference between an electrocardiogram and an echocardiogram. It is much more likely that a stress echocardiogram would've been an acceptable test for the patient. Stress echocardiograms are certainly cheaper than nuclear tests/stress MRI's (and, for certain things, are actually better) but are still several times more expensive than stress ECG's, which is what the author talked about.

While I agree that this like a part of the reason, the article doesnt mention (didnt get through the whole thing, so it may actually) about how these more advanced procedures are often driven out of fear of being sued. Should the patient have actually had legitimate heart problems and died, I guarantee you her family would have sued saying she would still be alive had the more advanced test been administered. Instances like these further drive up costs and overconsumption of healthcare services.Precisely.

Here's my question. If I look up the cost of a chest x-ray in Boston, it ranges from about $200-$2500.

http://www.newchoicehealth.com/Directory/CityProcedure/Massachus...

That's more than an order of magnitude difference. Normally, competition would force the price for a commodity service to a much narrower range. Why doesn't it in this case? It's obvious that many patients are generally paying the same co-pay regardless of the cost, so there is virtually no price discrimination on the part of the patient. Are insurance companies paying the places at the high end of this range 10x more than they are paying the service providers at the low end? Probably not.

So, why is there such a big spread? It is solely because of the price-shifting that dshibb talks about earlier in the thread? Are the #1 private payers, the insurance companies, actually paying significantly more for the facilities with the higher prices? Is anyone actually paying the prices at the high end?

xerty said:   cestmoi123 said:   jerosen said:   [Where did you get those numbers from?*Rectally Extracted Data
Sadly I don't have to make this stuff up:

http://www.forbes.com/forbes/2010/0510/opinions-insurance-fraud-...

Forbes said: The Centers for Medicare & Medicaid Services acknowledge $47 billion a year in "questionable claims" (i.e., fraud) in Medicare--about 10% of the program's $480 billion budget. Attorney General Eric Holder puts fraud even higher, at maybe $60 billion. In contrast, private-sector health insurers, which spend more than $600 billion a year on claims, keep the fraud rate to 1.5%...

Medicaid (slitly different, I know) estimates 10% fraud and 20-30% more in waste. $2M fraud/patient in NY - ouch.

http://www.thenewamerican.com/usnews/health-care/item/13146-medi...

You know when the mob gives up on H&B in NYC to move down to Florida to run Medicare scams, we're talking Big Bucks with little chance of being caught.

http://www.forbes.com/sites/merrillmatthews/2012/05/31/medicare-...

Federal officials set up the Medicare Fraud Strike Force in 2007, which visited at random nearly 1,600 businesses in Miami, ground zero for Medicare fraud, that had billed Medicare for durable medical equipment. Officials found that nearly a third of the businesses, 481, didnít even exist, yet they had billed Medicare for $237 million over the previous year, according to National Public Radio.

Indeed, scamming Medicare and Medicaid is so lucrative that the Russian and Nigerian mobs have gotten involved. And one of the New York crime families has moved to Florida because defrauding Medicare is both more lucrative and less dangerous than some of the traditional organized crime activities.


That $47BN number includes lots of things that definitely aren't "fraud," as a reasonable person would understand it (i.e. shoes for people without legs), but include upcoding of office visits, for example.

Fundamentally, there's going to be a tradeoff between fraud/gaming the system and administrative costs. Spend more on admin/claim screening, have fewer unjustified claims.

BostonOne said:   Frontline has a good episode on the trade-offs of various health care systems around the world (streamable online at the link below or on Netflix):

http://www.pbs.org/wgbh/pages/frontline/sickaroundtheworld/

Japan's system fixes the rates extremely low ($50/night for a private hospital room), which is short-term great for the patients, but is brutal to hospitals and the system.

Edited: Deleted my post that repeated what others had said about how long an x-ray takes to add a post that contained useful information.


+1. When it comes to the healthcare debate in the U.S., I really think we should benchmark against other countries more often. See what works and what doesn't abroad. When the Netherlands underwent comprehensive healthcare reform in 2006, that's exactly what they did. They convened an expert panel that studied the various systems around the world. In the end, they decided to copy the Swiss system more or less wholesale. And why not? There's no sense reinventing the wheel.

The PBS documentary is a nice intro to that as it spends about 12 minutes each on five different countries' systems. So in the span of an hour, you get a good feel for what the various systems and their trade offs are. The only part that surprised me is that they skipped France, since the WHO usually ranks it as the world's best healthcare system. Personally I, like the Dutch, am a fan of the Swiss system.

GADOM said:   Might as well say it. Healthcare (Profit and Non-for-Profit) will push the price as high as you can for a very simple proposition: How much are you willing to pay to live without pain - or even further - to remain alive. I support capitalism, supply and demand,

" but there is a line that has to be drawn on the price of lives."

So you would support only selling cars with a base price of $80,000 that can withstand much higher impacts than current cars. -It will save lives and auto companies constantly fight safety features due to cost.

Planes with escape pods so they are the size of a 757 but only carry 25 people at $3000 for a Coach ticket. -but you will survive a catastrophe.

Do you feel cheap healthcare is a right?


When it involves life, Yes.

"We hold these truths to be self-evident, that all men are created equal, that they are endowed by their creator with certain unalienable Rights, that among these are Life, Liberty, and the pursuit of Happiness."

Number of deaths in the U.S. in 2010 - 2,468,435. (Motor vehicle deaths - 32,885 - 1.33%)

With cars, we are talking about a privilege. If you cannot afford a cheap used car, there are cities with some sort of public transportation, or get a lift from a friend, or ride a bicycle. Or you can move closer to work or family. If you don't drive, does not mean you will die.

Here is the rest of the top deaths for 2010:

Heart disease: 597,689 (preventable through medicine and personal responsibility and early treatment)
Cancer: 574,743 (preventable through medicine and some on personal responsibility (skin and lung cancer))
Chronic lower respiratory diseases: 138,080 (preventable through medicine and some on personal responsibility (lung cancer))
Stroke (cerebrovascular diseases): 129,476 (preventable through personal responsibility mostly)
Accidents (unintentional injuries): 120,859 (it is what it is - accidental)
Alzheimer's disease: 83,494 (extendable life through medicine, but not preventable yet)
Diabetes: 69,071 (preventable through medicine and personal responsibility)
Nephritis, nephrotic syndrome, and nephrosis: 50,476 (preventable through medicine and personal responsibility and early treatment)
Influenza and Pneumonia: 50,097 (preventable through vaccines and treating it early)
Intentional self-harm (suicide): 38,364 (it is what it is - Darwin)

Look at the drop-off from the first two (47.5%) vs the rest. I do understand that people will die every year as they get older. And some are thrown into these categories, even though they probably had a large number of issues, and not just one.

Am I calling for cheap healthcare for everyone? No. I can see clearly now that it would bring down most hospitals if all patients were medicare/medicaid patients. But maybe a system that you pay 100% of cost (reasonable, not chargemaster or rack rate) for things that are not life and death - kid is sick (just enough to stay home) and needs to go to the doctor to verify and get a note to be able to go back to school.

rpi1967 said:   Medicare will pay hospitals more for the same service than when performed in a private physician practice. So now many physicians will opt to be a hospital employee because they can earn more for the same amount of work.It doesn't work this way. The reimbursement rate is higher if the procedure is performed at a hospital vs. a clinic, regardless of who owns the clinic. The reason for it is essentially the same reason that it'll cost you way more to get the same diagnosis at an emergency room vs. a physician's office. At an emergency room, you aren't just paying for the doctor's time: you are paying for all the extra life saving equipment that's on the standby, all the extra personnel, etc... The overhead cost of running an emergency room is infinitely higher than the overhead cost of running a regular physician's office and the charges have to reflect that.

For Medicare reimbursement purposes, however, if the diagnosis/treatment is provided in a non-hospital setting, it makes no difference whether it's the hospital that owns your clinic or whether it is owned privately.

vishalj77 said:   I graduated from med school in India - and there are plenty of radiology clinics in the affluent areas of major metropolitan areas that charge something like $5-$8 for an X-ray. An MRI with contrast of the head/neck region would cost around $200. The same MRI here costs $2,000 or more. Do note that a lot of times I've seen more expensive and advanced equipment used for the $200 scans, so it's not like the $200 charge is because of an inferior machine. Most equipment used globally is the same - Siemens, GE, etc. Granted that doctors/staff in India get paid a lot less than their US counterparts.. but isn't the entire point of medicine to *help* people? Not gouge them? I don't mind paying a reasonable amount of money for treatment.. but when they sent me a bill for $500 for laying on a bed in the ER for 15 minutes (just monitoring my BP.. had a panic attack once) then it's nuts!

If I thought that medical costs were shocking when I moved here.. I was even more surprised by dental expenses. $1,500 for a root canal? Get the same for $50 back home - same equipment. It's a joke when profits are a priority when it comes to essential services like healthcare and education.


One of the other hilarious things about medical equipment is that the manufacturers drastically inflate their prices when they sell to the United States. So that GE or Siemens MRI machine is marketed and sold for perhaps $1.5 million in India or the UK, but then they turn around and sell the same machine for $10 million in the US market because they know we are suckers.

This also happens with college text books(another industry broken by government)... when I did my MBA, I would get the ISBN and buy the "international edition" text books that only cost $30 that were usually shipped overnight from Singapore... but all of my classmates went to the campus bookstore often paid $250 for the same book. The international edition usually had "NOT FOR SALE IN THE UNITED STATES" in big letters to prevent merchants from selling it and perpetuating the scam.

optical said:   The sad part is that whatever money is paid is not even a guarantee they can even cure you. They do their "best" and your health may not even improve. If you bought a product for $50K, I bet you damn pissed if you didn't get what you paid for.What a bizarre thing to say. There is an enormous difference between manufacturing a product, where you control the design, decide on the quality of the components, can more or less precisely estimate its useful life and have data that allows you to predict your exposure with respect to warranty claims, and practicing medicine, which is often more art than science, which requires a lot of subjective judgment calls and involves a myriad of factors over which physicians have no control.

We do already have medical standards for treating various medical conditions and complaints and, if a physician's care is proven to fall short of meeting those standards, you can recover on your medical malpractice claim. Yet, you want a "guarantee [that] they can cure you"???

enc0re said:   BostonOne said:   Frontline has a good episode on the trade-offs of various health care systems around the world (streamable online at the link below or on Netflix):

http://www.pbs.org/wgbh/pages/frontline/sickaroundtheworld/

Japan's system fixes the rates extremely low ($50/night for a private hospital room), which is short-term great for the patients, but is brutal to hospitals and the system.

Edited: Deleted my post that repeated what others had said about how long an x-ray takes to add a post that contained useful information.


+1. When it comes to the healthcare debate in the U.S., I really think we should benchmark against other countries more often. See what works and what doesn't abroad. When the Netherlands underwent comprehensive healthcare reform in 2006, that's exactly what they did. They convened an expert panel that studied the various systems around the world. In the end, they decided to copy the Swiss system more or less wholesale. And why not? There's no sense reinventing the wheel.

The PBS documentary is a nice intro to that as it spends about 12 minutes each on five different countries' systems. So in the span of an hour, you get a good feel for what the various systems and their trade offs are. The only part that surprised me is that they skipped France, since the WHO usually ranks it as the world's best healthcare system. Personally I, like the Dutch, am a fan of the Swiss system.


But, but, but, we're different and...uh...socialism!

... next time they tell you how lucky you are not paying french taxes.

Here is another interesting data point - maybe some can chime in on why stuff like this happens.

My wife was recently expecting. Two times, we went into the hospital around a month before the due date because we thought she might be early.

The first time, we were in CA (not our home state) in one of the most expensive cities in the US - They did tests A, B and C. We were there for 4 hours and the C test was most expensive.
The second time, we were back home (CO) and they did tests A and B. We were there for 1 hour.

Both days were in the afternoon on a weekday - both times we went into Labor and Delivery. So literally, the second visit was a small subset of the first visit.

Cost first CA hospital billed insurance: $400
Cost second CO hospital billed insurance: $1400

I called the CO to ask how they could justify $1400 for less than a 1 hour visit. I was told that they basically charge that when you walk in the door and they need it "just to keep the lights on".

enc0re said:   +1. When it comes to the healthcare debate in the U.S., I really think we should benchmark against other countries more often. See what works and what doesn't abroad. When the Netherlands underwent comprehensive healthcare reform in 2006, that's exactly what they did. They convened an expert panel that studied the various systems around the world. In the end, they decided to copy the Swiss system more or less wholesale. And why not? There's no sense reinventing the wheel.

The PBS documentary is a nice intro to that as it spends about 12 minutes each on five different countries' systems. So in the span of an hour, you get a good feel for what the various systems and their trade offs are. The only part that surprised me is that they skipped France, since the WHO usually ranks it as the world's best healthcare system. Personally I, like the Dutch, am a fan of the Swiss system.
There are plenty of people out there who've spent a lot more than 12 minutes each studying various medical systems around the world and are intimately familiar with each one. The bottom line is that one of the reasons that we have so many different healthcare delivery models out there is because this really is an incredibly complex issue and there's simply no perfect solution out there. Each healthcare system comes with its own set of advantages and disadvantages; there are situations under each healthcare system that would be better handled under a different system; there are people under each healthcare system who would be advantaged and disadvantaged under other healthcare systems.

Hence, the reason that we are not even close to a consensus among people with intimate knowledge of various healthcare system regarding the "best" one here, because what's "best" just depends on so many different variables. This is also the reason that when it comes to our healthcare system, it's always very easy to come up with a list of complaints. When people are asked to propose an appropriate fix for each of the problems, the proposed solutions would often create more problems than they would solve.

dshibb said:   
Cost Shifting:
-Introduce cost shifting into the insurance marketplace through community rating(no pre-existing conditions) so that healthcare costs of older and unhealthier people get shifted onto younger people through insurance premiums(and an insanely low maximum premium multiple between the old and young) and when this takes full affect prevent younger people from running for the exits by assessing a penalty for not having insurance(which is likely still going to be lower than the insanely higher premiums those younger people will have to pay which means government revenue goes up, coverage rates fall, charity care rises of which the government will continue to default on and pass onto everybody else for more cost shifting at the hospital).


I take it you and no one in your family has a pre-existing condition. You can call it cost shifting, I'll call it cost sharing. I'll gladly pay a little more in insurance to cover you if you are unlucky enough to get a lifelong chronic condition as long as I get the same consideration. It is insane to bankrupt people who win the shit lottery with a costly medical condition.

Sure, some people get medical conditions like diabetes because they don't take care of themselves, or cancer because they smoke. But most people who fall into the pre-existing condition trap are just unlucky and it can just as likely happen to you - then how will you feel about it? Insurance is supposed to be the transfer of risk in exchange for a payment. Yet the entire system is rigged so that once you get a disease, even though you were making those payments they do everything they can to strip you of your coverage or make it impossibly expensive to continue. And that's just BS and I'm glad ObamaCare is finally putting an end to it.

One of my friend who runs multipke Physical Therapy Clinic(for profit) mentioned that the Medicare patients are the best for him. Medicare pay around ~$69 per visit compared to the insurance (aetna pay $49). The charge I mentioned is for treatment & not for consultation.

geo123 said:   rpi1967 said:   Medicare will pay hospitals more for the same service than when performed in a private physician practice. So now many physicians will opt to be a hospital employee because they can earn more for the same amount of work.It doesn't work this way. The reimbursement rate is higher if the procedure is performed at a hospital vs. a clinic, regardless of who owns the clinic. The reason for it is essentially the same reason that it'll cost you way more to get the same diagnosis at an emergency room vs. a physician's office. At an emergency room, you aren't just paying for the doctor's time: you are paying for all the extra life saving equipment that's on the standby, all the extra personnel, etc... The overhead cost of running an emergency room is infinitely higher than the overhead cost of running a regular physician's office and the charges have to reflect that.

For Medicare reimbursement purposes, however, if the diagnosis/treatment is provided in a non-hospital setting, it makes no difference whether it's the hospital that owns your clinic or whether it is owned privately.

That is the rationale for different pAyments amounts,but if your ekg is performed as an outpatient an ordered by a hospital employed physician then the bill will be higher, perhaps twice as high than solo practitioner. So the hospital can pay the employee more than the solo physician can earn.
The bills to the patient and Medicare will be higher.
Previously testing more to earn.more was a ethical decision for a solo physician but now it is also a business imperative forthehospital.

rpi1967 said:   That is the rationale for different pAyments amounts,but if your ekg is performed as an outpatient an ordered by a hospital employed physician then the bill will be higher, perhaps twice as high than solo practitioner.No, that's incorrect. If your ekg is performed at a doctor's office, the Medicare reimbursement rate is going to be the same regardless of who the doctor works for (a private practice or a hospital). If the same patient goes to the hospital to get it done, the Medicare reimbursement rate is going to be (or at least could be, as it'll depend on several other things) higher, because now he is paying not just for the ekg but for the higher overhead that it takes to run a hospital, additional equipment that is there, etc... If the same ekg is ordered on the same patient at an ER, the Medicare reimbursement is going to be even higher, because now you are paying for even higher overhead costs.

Again, the above will be the same regardless of who the doctor works for. A hospital doesn't get to purchase a medical clinic and suddenly start collecting higher Medicare reimbursements for the same exact things.

woolooloo said:   dshibb said:   
Cost Shifting:
-Introduce cost shifting into the insurance marketplace through community rating(no pre-existing conditions) so that healthcare costs of older and unhealthier people get shifted onto younger people through insurance premiums(and an insanely low maximum premium multiple between the old and young) and when this takes full affect prevent younger people from running for the exits by assessing a penalty for not having insurance(which is likely still going to be lower than the insanely higher premiums those younger people will have to pay which means government revenue goes up, coverage rates fall, charity care rises of which the government will continue to default on and pass onto everybody else for more cost shifting at the hospital).


I take it you and no one in your family has a pre-existing condition. You can call it cost shifting, I'll call it cost sharing. I'll gladly pay a little more in insurance to cover you if you are unlucky enough to get a lifelong chronic condition as long as I get the same consideration. It is insane to bankrupt people who win the shit lottery with a costly medical condition.

Sure, some people get medical conditions like diabetes because they don't take care of themselves, or cancer because they smoke. But most people who fall into the pre-existing condition trap are just unlucky and it can just as likely happen to you - then how will you feel about it? Insurance is supposed to be the transfer of risk in exchange for a payment. Yet the entire system is rigged so that once you get a disease, even though you were making those payments they do everything they can to strip you of your coverage or make it impossibly expensive to continue. And that's just BS and I'm glad ObamaCare is finally putting an end to it.

The problem with guaranteed issue is that people can wait until they get sick to sign up for insurance. This strategy won't work if you are unconscious in the ER, but it would be possible for someone diagnosed with an expensive disease to buy insurance at the same cost as a healthy individual. On the other hand, making guaranteed re-issue or guaranteed renewal available to everyone would protect people who purchased insurance from higher premiums if they become seriously ill. Subsidized high risk pools could protect people who are unable to find reasonably priced insurance.

Although I am in favor of protecting the helpless and the luckless, I believe we should limit assistance to the clueless and the feckless.

Yep. Guaranteed issue means that for many (most?) people the financially prudent thing is not to buy health insurance until the cost of healthcare is going to exceed the cost of insurance.

Which is the reason for mandatory coverage

woolooloo said:   Which is the reason for mandatory coverage

But, we don't have mandatory coverage. Mandatory coverage, I believe, would have been found unconstitutional. Instead, we have a "tax" on people who don't buy coverage. As long as this tax is low enough, it makes sense for many people to pay it instead of buying insurance. If the "tax" becomes too high, I'm not so sure that they'll be able to keep calling it a tax.

If getting coverage is going to be easy and quick, there is going to be tons of incentive to avoid buying it.

It's true that we don't have a 100% mandate. However, between the tax penalties, employer coverage, and the Medicaid expansion; it's expected that we'll have 98% coverage. Assuming for a second that we get close to that, it's universal enough to make guaranteed issue and community rating work.

"5. What are the statutory exemptions from the requirement to obtain minimum essential coverage?

1.Religious conscience: You are a member of a religious sect that is recognized as conscientiously opposed to accepting any insurance benefits. The Social Security Administration administers the process for recognizing these sects according to the criteria in the law.

2.Health care sharing ministry: You are a member of a recognized health care sharing ministry.

3.Indian tribes: You are a member of a federally recognized Indian tribe.

4.No filing requirement: Your household income is below the minimum threshold for filing a tax return. The requirement to file a federal tax return depends on your filing status, age, and types and amounts of income. To find out if you are required to file a federal tax return, use the IRS Interactive Tax Assistant (ITA).

5.Short coverage gap: You went without coverage for less than three consecutive months during the year. For more information see question 21.

6.Hardship: A Health Insurance Marketplace, also known as an Affordable Insurance Exchange, has certified that you have suffered a hardship that makes you unable to obtain coverage.

7.Unaffordable coverage options: You canít afford coverage because the minimum amount you must pay for the premiums is more than eight percent of your household income.

8.Incarceration: You are in a jail, prison, or similar penal institution or correctional facility after the disposition of charges against you.

9.Not lawfully present: You are neither a U.S. citizen, a U.S. national, nor an alien lawfully present in the U.S."



IRS

enc0re said:   It's true that we don't have a 100% mandate. However, between the tax penalties, employer coverage, and the Medicaid expansion; it's expected that we'll have 98% coverage. Assuming for a second that we get close to that, it's universal enough to make guaranteed issue and community rating work.

I have nothing to go on here other than some logic, some insurance knowledge, and lots of experience. What I mean is that this is complete conjecture on my part, but at least it is conjecture that doesn't come from left field.

I think that if the expectations are 98%, it is complete pie in the sky (is that a real expression?).

On the individual side, I believe that the cost will be much more than people expect. As it is now, people complain that coverage is too expensive and that is when healthy people are only in a pool of healthy people. There are two things from the outset that will cause healthy people to pay more money with Obamacare. 1)More things are mandated. 2)They are no longer in a pool of healthy people. They will be in a pool of healthy and unhealthy people.

Before Obamacare, it was absolute stupidity for a healthy person not to buy health insurance. Any change in health, and they were screwed. Because of this, it made sense for young healthy people to buy coverage. Young unhealthy people often went without it because they couldn't get it.

I think that Obamacare is counting on the following. Let's take a look at 10 30 year old single people. Let's just put them in 2 groups, "Healthy" and "Unhealthy". Assume 7 of them fit in the former group and 3 are in the latter. Obamacare assumes that all 10 of them will buy insurance. I don't see that happening. In fact, I think that fairly quickly, the percentage of healthy people who qualify for individual coverage, but choose to not buy it will increase.

Pre-Obamacare, 6 of the 7 healthy people would have purchased health insurance and would have been in a pool of 6 healthy people. 1 of the 3 unhealthy people would have purchased health insurance and would have been in a separate pool.

Post-Obamacare, 5 of the 7 healthy people purchase health insurance (one additional doesn't because it is guaranteed issue) All three of the unhealthy people buy insurance. Instead of being in a pool of all healthy people, they are now in a pool that includes 5 healthy and 3 unhealthy people. This likely means significantly higher premiums for them. Because of the higher premiums, one of the healthy people decides to go without insurance. We now have 4 healthy and 3 unhealthy in the pool and 3 healthy people who have no insurance.

The rules and the finances pre-Obamacare made it so that healthy people were the ones to most likely have insurance. Post-Obamacare, it will be a complete 180. Healthy people will most likely go without coverage.

Single people often believe that they are invincible. How smart is it for the typical 25 year old who goes to the doctor 1x a year to pay $6000/year for insurance when they can just pay a fraction of that and only buy coverage if needed?

The people who least likely will use insurance will be the most likely not to buy it. Insurance needs those people to buy insurance or else the cost may skyrocket.

ryeny3 said:   "5. What are the statutory exemptions from the requirement to obtain minimum essential coverage?

5.Short coverage gap: You went without coverage for less than three consecutive months during the year. For more information see question 21.

IRS


"Question 21. What qualifies as a short coverage gap?

In general, a gap in coverage that lasts less than three months qualifies as a short coverage gap. If an individual has two short coverage gaps during a year, the short coverage gap exemption only applies to the first or earlier gap."

So does this mean that you only have to have coverage for 9.1 months every year? That would amount up to 24.9% discount on yearly coverage, while only doing your yearly checkups while under coverage.

ryeny3 said:   "5. What are the statutory exemptions from the requirement to obtain minimum essential coverage?

1.Religious conscience: You are a member of a religious sect that is recognized as conscientiously opposed to accepting any insurance benefits. The Social Security Administration administers the process for recognizing these sects according to the criteria in the law.

2.Health care sharing ministry: You are a member of a recognized health care sharing ministry.

3.Indian tribes: You are a member of a federally recognized Indian tribe.

4.No filing requirement: Your household income is below the minimum threshold for filing a tax return. The requirement to file a federal tax return depends on your filing status, age, and types and amounts of income. To find out if you are required to file a federal tax return, use the IRS Interactive Tax Assistant (ITA).

5.Short coverage gap: You went without coverage for less than three consecutive months during the year. For more information see question 21.

6.Hardship: A Health Insurance Marketplace, also known as an Affordable Insurance Exchange, has certified that you have suffered a hardship that makes you unable to obtain coverage.

7.Unaffordable coverage options: You canít afford coverage because the minimum amount you must pay for the premiums is more than eight percent of your household income.

8.Incarceration: You are in a jail, prison, or similar penal institution or correctional facility after the disposition of charges against you.

9.Not lawfully present: You are neither a U.S. citizen, a U.S. national, nor an alien lawfully present in the U.S."



IRS


The exemptions just stop a person from paying the fine. In many cases, the fine will still make more sense.

7.Unaffordable coverage options: You canít afford coverage because the minimum amount you must pay for the premiums is more than eight percent of your household income.

Isn't this going to exempt the majority of people? With coverage that is guaranteed issue, a family very easily may be looking at a cost of $1,000/month. Families without 6 figure incomes would be exempt from the fines.

Young single people are probably looking at $5000-$6,000 a year. Incomes of less than $60,000 will probably exempt them.

MilleniumBuc said:   ryeny3 said:   "5. What are the statutory exemptions from the requirement to obtain minimum essential coverage?

5.Short coverage gap: You went without coverage for less than three consecutive months during the year. For more information see question 21.

IRS


"Question 21. What qualifies as a short coverage gap?

In general, a gap in coverage that lasts less than three months qualifies as a short coverage gap. If an individual has two short coverage gaps during a year, the short coverage gap exemption only applies to the first or earlier gap."

So does this mean that you only have to have coverage for 9.1 months every year? That would amount up to 24.9% discount on yearly coverage, while only doing your yearly checkups while under coverage.
The IRS and Tresury considers a single day of coverage per month as a full month, so you would be exempt if you had coverage from January 1 to October 1 and no coverage for the rest of the year.



"18. Do I have to be covered for an entire calendar month in order to get credit for having minimum essential coverage for that month?

No. You will be treated as having minimum essential coverage for a month as long as you have coverage for at least one day during that month."

IRS

"Partial-Month Coverage Counts for the Month. The Treasury regulations provide that an individual is treated as having coverage for a month so long as he or she has coverage for any one day of that month. For example, an individual who starts a new job on March 27 and is enrolled in employer-sponsored coverage on that day is treated as having coverage for the month of March. Similarly, an individual who is eligible for an exemption for any one day of a month is treated as exempt for the entire month."

treasury.gov

The whole point of insurance is to protect you from the risk of a future event happen.

The new health care changes make it so that health insurance companies can't deny you for a pre-existing condition.

So young and healthy people will stop buying insurance. If they get sick, they'll just open a new policy and can't be denied. Without lots of healthy people paying into the system the costs will skyrocket for everyone else.

True there are penalties for not buying a policy... but they are very small relative to the cost of buying insurance. For the first year I believe it is $80

BrodyInsurance said:   

The exemptions just stop a person from paying the fine. In many cases, the fine will still make more sense.

7.Unaffordable coverage options: You canít afford coverage because the minimum amount you must pay for the premiums is more than eight percent of your household income.

Isn't this going to exempt the majority of people? With coverage that is guaranteed issue, a family very easily may be looking at a cost of $1,000/month. Families without 6 figure incomes would be exempt from the fines.

Young single people are probably looking at $5000-$6,000 a year. Incomes of less than $60,000 will probably exempt them.
As you pointed out, the fines may be a better financial decision than purchasing qualifying insurance for many people. On the other hand, many individuals and families will be exempt from the mandate. For those who aren't exempt, nine months and a day of coverage counts as a full year.

biomedeng said:   dshibb said:   It doesn't make anybody on here feel better about it because it only means the government sets the reimbursement rate just high enough for hospitals to be a willing participant in fleecing us.

Furthermore, once the hospitals have accepted that it still means that they we're stuck with the not only the cost shifting onto us, but also with the overutilization that comes with it...both of which drives up our insurance premiums.

I will agree if the reimbursement rate from the government is low, then the cost is shifted to those with private insurance.
But if the reimbursement rate was set higher, we might pay less for private insurance, but we would definitely have to pay more in taxes. Also with a higher reimbursement rate the overutilization would be worse as more people would accept the government plans. Just look at the things the government overpays for (e.g. those medical scooters) and then you realize that businesses will spring up (the scooter store) just to service these areas.
Seems like a no-win situation to me.


Increase the deductible and most of the problem goes away.

To the posters arguing that many families will drop out: don't forget that up to 400% of the poverty line, there will be a use it or lose it subsidy to buy private insurance. You're forgetting to include that in the individual cost-benefit examples.

The IRS and Tresury considers a single day of coverage per month as a full month, so you would be exempt if you had coverage from January 1 to October 1 and no coverage for the rest of the year.

Go from January 31 to October 31st and we're down to 8 months of coverage.

Depending upon the rules and the PITA factor, one might only need coverage for 9 days.

dshibb said:   biomedeng said:   dshibb said:   It doesn't make anybody on here feel better about it because it only means the government sets the reimbursement rate just high enough for hospitals to be a willing participant in fleecing us.

Furthermore, once the hospitals have accepted that it still means that they we're stuck with the not only the cost shifting onto us, but also with the overutilization that comes with it...both of which drives up our insurance premiums.

I will agree if the reimbursement rate from the government is low, then the cost is shifted to those with private insurance.
But if the reimbursement rate was set higher, we might pay less for private insurance, but we would definitely have to pay more in taxes. Also with a higher reimbursement rate the overutilization would be worse as more people would accept the government plans. Just look at the things the government overpays for (e.g. those medical scooters) and then you realize that businesses will spring up (the scooter store) just to service these areas.
Seems like a no-win situation to me.


Increase the deductible and most of the problem goes away.


Many of the problems would disappear with high deductibles. I like that this would cost unhealthy people more, but stop them from going broke because of gigantic medical bills. Everyone would have skin in the game and personal financial incentive to take care of their health and a stake in the actual cost of medical bills.

enc0re said:   To the posters arguing that many families will drop out: don't forget that up to 400% of the poverty line, there will be a use it or lose it subsidy to buy private insurance. You're forgetting to include that in the individual cost-benefit examples.

I'm guilty of not including lots of things. It is much more likely to be young single people who opt out than families. Families almost always have medical expenses. Please explain what you mean by "use it or lose it". Thanks.

enc0re said:   To the posters arguing that many families will drop out: don't forget that up to 400% of the poverty line, there will be a use it or lose it subsidy to buy private insurance. You're forgetting to include that in the individual cost-benefit examples.

Right now, you can only get subsidies if your state runs a health care exchange and you buy through a health care exchange. Most states aren't setting up a state exchange (or partnership), so there will be no subsidies in those states:

http://www.freedomworks.org/files/imagecache/full/BlockExchanges...

Also, if there are no subsidies, then there is no employer mandate:

http://johnrlott.blogspot.com/2012/11/no-health-insurance-exchan...

woolooloo said:   dshibb said:   
Cost Shifting:
-Introduce cost shifting into the insurance marketplace through community rating(no pre-existing conditions) so that healthcare costs of older and unhealthier people get shifted onto younger people through insurance premiums(and an insanely low maximum premium multiple between the old and young) and when this takes full affect prevent younger people from running for the exits by assessing a penalty for not having insurance(which is likely still going to be lower than the insanely higher premiums those younger people will have to pay which means government revenue goes up, coverage rates fall, charity care rises of which the government will continue to default on and pass onto everybody else for more cost shifting at the hospital).


I take it you and no one in your family has a pre-existing condition. You can call it cost shifting, I'll call it cost sharing. I'll gladly pay a little more in insurance to cover you if you are unlucky enough to get a lifelong chronic condition as long as I get the same consideration. It is insane to bankrupt people who win the shit lottery with a costly medical condition.

Sure, some people get medical conditions like diabetes because they don't take care of themselves, or cancer because they smoke. But most people who fall into the pre-existing condition trap are just unlucky and it can just as likely happen to you - then how will you feel about it? Insurance is supposed to be the transfer of risk in exchange for a payment. Yet the entire system is rigged so that once you get a disease, even though you were making those payments they do everything they can to strip you of your coverage or make it impossibly expensive to continue. And that's just BS and I'm glad ObamaCare is finally putting an end to it.


You don't understand the issue at all. There are dozens of different solutions to handle pre-existing conditions. The most successful one in the US has been state high risk pools. The worst solution is community rating(no-pre existing conditions). When implemented it increases *everybody's* insurance premiums higher than just what the high risk people would pay for their states high risk pool.

So yes you don't know what you're talking about. There is a reason why everybody's insurance in New Jersey is 4 times more expensive than across the border in Pennsylvania and New Jersey isn't even a full community rating.

The problem with people like you is that you think with your emotions and that prevents you from seeing better solutions to the same problems.

dshibb said:   ryeny3 said:   dshibb said:   So I got my answer back. I get what she said in terms of charity care and actually made more sense of some other things she's told me, but in terms of the financial/managerial accounting of that I get some of what she said, but she lost me a bit:

1) The process for accounting for charity care cases for the purposes of receiving government money is governed almost entirely by state by state very complicated protocol. First you have to maintain the 30% rule for donated funds in order to be eligible for anything. It is then handled primarily on a case by case basis "Where you have to prove the patients financial inability to pay based upon an exhausted quantity of criteria." That process is very time consuming and costly. In many instances the potential cost of going through, the probability of receiving government funds, vs. the amount that could be received render the process as a money loser. This made more sense out of a comment my sister made about the state of Maine's charity care program when she said that her company made it quite clear "Don't even bother to file any charity care cases with the state of Maine they haven't paid one in 2 years"(that was a few years ago). The physical loss incurred for the charity care 'claim' to the state in question is also determined by protocol and requires it to be 'proven'. I read that to mean that essentially you have to argue your case and the state in question will just determine what you should get(which will probably have to do more with their financial position than anything else).

2) Operationally from a financial standpoint a hospital traditionally uses their 'cash factor' to value the non payment case. The cash factor is usually around 30%. I asked so is that the estimated value of that debt--30 cents on the dollar? She said, "No, it's set by contractual arrangement". I asked her to explain that and she was just like "it's complicated", "contractual arrangements with the government, etc." and I didn't get it. So I then asked how does the hospital handle it from an a managerial accounting standpoint. So after whatever you can collect, get in donations from benefactors, collect from the government, etc., how do you apply what's left? "Bad debt of course" hospitals don't ever assess things on an that level of individual basis. "They always go from aggregate down to individual." So you take the aggregate non paid off bills, subtract whatever you were able to collect, subtract total donations, subtract total government money received, and you have bad debt. You can then take that bad debt number and divide it up among the remaining patients who have the capacity to pay and you have your number for which makes complete sense I guess. She also said that operationally all hospitals treat it a little bit differently based on what are local factors they're experiencing, the local risks, issues they have, etc.


So not quite the simple answer I thought it could be, but hopefully this sheds some light on it.
Thank you and your sister. It's very helpful.

If it read this correctly, it sounds like the average uninsured patient might be more profitable than insured patients. Basically, a hospital bills a very high amount knowing that some will pay the full bill, some will negotiate a better rate, and some won't pay anything. If average hospital bill for an uninsured patient is $10,000 and the hospital expects to collect about 30% or $3,000 plus any donations or government assistance is added in, I wouldn't be surprised if not only Medicaid but private insurance pays even less than $3,000. "IF" every uninsured patient was coerced or incentivized to purchase health insurance, it's possible that hospitals total revenue for providing the same care would decline. Since some people because of their immigration status won't be required to have insurance and the possibility that these individuals are too poor to make more than a minimal payment for their care, the numbers look even worse.


I'm almost positive that isn't correct. Based on the way she was speaking and what I could understand that is not at all what I gathered.

Notice how when I asked her if she was saying the value of said debt was 30 cents on the dollar and she said no. So she clearly wasn't giving me an average collection rate(at least I don't think and if it was it could just refer to the 30% of benefactor donations), and furthermore she gave me that as a response to how they determine whether to use the medicare reimbursement rate, the insurance rate, etc. I don't know what she meant by 'cash factor' maybe someone else can better explain it(she's busy and not the type that likes to talk shop so there is a limit to how much I can press her).

But based on how she responded it the 30% cash factor was implied as a tool to understand how they figure the amount lost and not some recovery rate they used to value the receivable(If she did say Yes, I would have corrected her and pointed out that wasn't what I was asking).




I found a reference that average collection rates for hospitals is 10%.

Seems likely. I wouldn't expect hospitals would have a lot of luck collecting 5-6 figure bills from people without insurance the vast majority of the time.

BrodyInsurance said:   The IRS and Tresury considers a single day of coverage per month as a full month, so you would be exempt if you had coverage from January 1 to October 1 and no coverage for the rest of the year.

Go from January 31 to October 31st and we're down to 8 months of coverage.

Depending upon the rules and the PITA factor, one might only need coverage for 9 days.
When I linked the exemptions from the tax, I started to post a couple of strategies before I got busy. Since this is FWF, it only took a few minutes for people to come up with some great suggestions.

If the gap is less than 3 months, then it would be 10 days.

enc0re said:   It's true that we don't have a 100% mandate. However, between the tax penalties, employer coverage, and the Medicaid expansion; it's expected that we'll have 98% coverage. Assuming for a second that we get close to that, it's universal enough to make guaranteed issue and community rating work.

And you believe that? LOL, seriously it's hilarious how people will just take whatever positive projections people *selling* a bill make.

You know this is also an area where I benefit from having someone close to me who works in structuring and consulting on benefits for companies(including many of them that people on here would recognize). There research and the advice they're giving to companies is completely different than what the sellers of Obamacare are saying.

First of all, you are looking at pretty much the wholesale dropping of all corporate provided healthcare for companies with less than 50 employees. See since there is no penalty for companies of that size who don't provide health insurance it creates a rather interesting dynamic. First if you have a portion of employees who would qualify for exchange subsidy than the value those employees would place on employer provided health insurance falls relative to receiving extra compensation. So eventually(it wont happen all at once) small under 50 person businesses will just drop their plans and look at competing stronger on just salary and not concern themselves with benefits.

Next, you want to know what the biggest advice that is being given out? Hire independent contractors. See the companies are just saying f&ck you to the whole thing and whatever they can hire as independent contractors they're going to do it.

The smart group benefits people are literally trying to hedge their bets into other related markets because they know the damage this bill is doing to the market.


Furthermore, as I pointed out before the penalty is too low relative to let's say insurance pricing in Mass, Maine, New Jersey, etc. as it stands today. Those are the states who this bill is modeled after. So once those pressures take hold on the national insurance marketplace the mandate 'tax' becomes a smaller and smaller relative to the premium amount. Eventually, you'll see many people just prefer to pay the tax instead of getting the insurance.


Next time don't believe the bull$hit that people trying to sell a bill try to tell you will happen. Because if that was true we would have been out of Afghanistan and Iraq in 2005, we would have 5% GDP growth today with 4% unemployment, and we would have significantly cheaper premiums and more insured today after each successive healthcare bill for the last 50 years promised cheaper premiums and more coverage(when that never happened).



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