RIP off in healthcare

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jerosen said:   



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.


Thank you very much for providing the link. I found the actual survey, but I wasn't able to cut and paste the methodology. The 10% number refers only to collections by third parties, i.e. collection agencies. The study excluded in-house collections. Most companies hire collection agencies as a last resort, so it wouldn't be surprising if the percentage collected is lower than internal collections. I don't know what percentage of bills are collected before they are turned over to third parties or what percentage of total bills this represents.

You know what people don't realize is that when community rating was passed in the state of Washington for example the insurance marketplace completely dried up in most of the state. The state of Washington was forced to scale back the law because it was doing far more damage than it was doing good.

Again do you expect people to understand or grasp this or for anybody in the news to even report this? No! They don't care. They want to live their fairy tale.

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

One of the problems with health insurance is that mandatory coverage for many things without the need for a large deductibles, stops it, to a large extent, from meeting the definition of "insurance".

It would be similar to car insurance that mandated that the insurance company must pay for a complete inspection every year with no deductible. A portion of the premium just becomes a pre-payment.

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.
You mean Jan 31 - Oct. 1, right?

PhrugalPhan said:   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.
You mean Jan 31 - Oct. 1, right?


Yes. And for "9 days", I was talking about just keeping insurance for one day a month in each of 9 months.

dshibb said:   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.
...


Massachusetts has 98% coverage. If they can do it then why is that laughable idea for the other 49 states?

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

One of the problems with health insurance is that mandatory coverage for many things without the need for a large deductibles, stops it, to a large extent, from meeting the definition of "insurance".

It would be similar to car insurance that mandated that the insurance company must pay for a complete inspection every year with no deductible. A portion of the premium just becomes a pre-payment.


The vast majority of 'health insurance' isn't health insurance it's prepaid healthcare.

Think about the things you join that use monthly or annual membership costs once. What do you immediately look at when you do that? You realize that once you join you'll increase your relative usage because there is now less of a per cost associated with each individual use. What else happens? You compare the usage you pay for usage in a given period of time(let's say a year) with the cost of going with the membership. What else do you notice? If there are variable costs that the provider has they're going to try to enact rules to prevent over usage and driving up their costs.

All of this applies to the health insurance market. And what the government does with mandating health insurers cover x, y, and z without high deductibles or co-pays is to make sure that the scope of this 'prepaid membership' continues to grow so that the premium keeps on rising.

jerosen said:   dshibb said:   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.
...


Massachusetts has 98% coverage. If they can do it then why is that laughable idea for the other 49 states?


Wont stay that way. Every other form of guaranteed issue/guaranteed renewable/community rating that has been passed in other states resulted in an immediate increase in the amount of people receiving coverage and then it started going back the other way. The Mass bill was just enacted too recently for you to see that effect yet.


New Jersey guaranteed renewable: 1999 to 2009 percent of uninsured 11.7 11.7 12.7 13.4 13.4 13.9 14.5 15.5 15.8 14.1 15.8

dshibb said:   jerosen said:   dshibb said:   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.
...


Massachusetts has 98% coverage. If they can do it then why is that laughable idea for the other 49 states?


Wont stay that way. Every other form of guaranteed issue/guaranteed renewable/community rating that has been passed in other states resulted in an immediate increase in the amount of people receiving coverage and then it started going back the other way. The Mass bill was just enacted too recently for you to see that effect yet.


Wasn't the Mass. law passed in '06. Thats 7 years. Seems long enough for the dust to settle.

BrodyInsurance said:   PhrugalPhan said:   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.
You mean Jan 31 - Oct. 1, right?


Yes. And for "9 days", I was talking about just keeping insurance for one day a month in each of 9 months.
If the maximum gap is < 3 months, then it's 10 days. If <= 3 months then 9 days. Regardless, it's a clever idea.

jerosen said:   dshibb said:   jerosen said:   dshibb said:   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.
...


Massachusetts has 98% coverage. If they can do it then why is that laughable idea for the other 49 states?


Wont stay that way. Every other form of guaranteed issue/guaranteed renewable/community rating that has been passed in other states resulted in an immediate increase in the amount of people receiving coverage and then it started going back the other way. The Mass bill was just enacted too recently for you to see that effect yet.


Wasn't the Mass. law passed in '06. Thats 7 years. Seems long enough for the dust to settle.


Most of it didn't take affect immediately similar to ObamaCare. For comparison you can look at states that passed legislation back in the 90s.

dshibb said:   
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.


State risk pools have been around for over 30 years and the problems still exist - so much for that "solution".

Let's play a little game, you have 10 healthy people who are paying for health insurance, their health care costs are X per year. One gets sick and his cost is now 100*X per year. He's been paying his insurance premium all along, and the point of having insurance is to distribute risk. You would have the 9 healthy people continue to only pay premiums that cover just their health care costs and send the one person who was unfortunate enough to get sick to a risk pool that has substandard coverage, higher premiums, and is subsidized by the government (guess who pays for that?).

Let me ask a question (and I know it is math and might be hard for you) - regardless of the solution, how much is now being spent on health care? 109*X...

But in your "solution", the poor guy who was playing the game all along and paying his dues now not only has to deal with being sick, he now gets crappy insurance, pays through the nose for it, and everyone else is indirectly paying a share of it anyways through the Government subsidy. Wow, that's great.

Your argument that community rating will necessarily raise the total cost of health care is red herring, the total amount spent is the same no matter the solution. The only difference is who pays for what share of it (and whether it is directly through premiums or indirectly through taxes). You argue that the poor healthy people shouldn't have to pay more - they are healthy, why should they have to pay for some unlucky bloke who got sick? Look, what's the point of paying for health insurance at all if you are healthy? Because you know there is a chance that you too could end up getting sick and you don't want to be left holding the bag if that happens. And that's the entire point of insurance, to distribute risk, yet here you are saying that people who actually do get sick should in fact be thrown out of the system and be left holding the bag. I can't help but hold a glimmer of hope that this comes your way soon, then let's see you be so smug.

Bottom line, if you have been playing the game and paying your risk premiums, then the game shouldn't get to crap on you and spit you out when you do get unlucky and get sick.

And yes, I also understand all the problems with ObamaCare and how it will encourage healthy people to not have insurance and just pay the penalty, I'm not saying it is perfect. I'm saying that I'm glad that something is finally being done to address the problems that have been plaguing families dealing with these issues for so long. I don't think this is the final solution, not by a longshot, but at least it is step towards a solution and that is better than we've had.

jerosen said:   dshibb said:   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.
...


Massachusetts has 98% coverage. If they can do it then why is that laughable idea for the other 49 states?


I don't really have any knowledge in terms of how Massachusetts works. If it is structured the exact same, it would surprise the heck out of me that it is 98%. What happens if someone chooses not to buy coverage in Massachusetts?

BrodyInsurance said:   
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.

Please say why you like that "this [raising deductibles] would cost unhealthy people more". There are plenty of "unhealthy people" whose health issues are no fault of their own, both children and adults. This is much more complex than a matter of personal financial incentives and your oft-repeated phrase "skin in the game".

We need to address healthcare costs from a variety of perspectives, and encouraging healthy habits is only one component, one that should be approached as a matter of education, not penalizing individuals.

glxpass said:   BrodyInsurance said:   
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.

Please say why you like that "this [raising deductibles] would cost unhealthy people more". There are plenty of "unhealthy people" whose health issues are no fault of their own, both children and adults. This is much more complex than a matter of personal financial incentives and your oft-repeated phrase "skin in the game".

We need to address healthcare costs from a variety of perspectives, and encouraging healthy habits is only one component, one that should be approached as a matter of education, not penalizing individuals.


Look if that is where your problem with the idea lies there are solutions to that. As it stands we implement community rating and drive down deductibles causing utilization to sky rocket and drive costs higher. Instead what if we transferred a lot of this long term liability to an asset onto peoples balance sheets at birth? I.e. what I mean is that if you're worried about poor Joe Blow being able to pay for his deductibles and co-pays why don't you just hand Joe Blow(and every American) let's say $20k in a completely locked down HSA at birth. $20k should represent substantially less than the discounted present value of per capita cost of having a deductible at $5000 vs. $0. So in terms of a government cost it would be less than what they currently do.

Furthermore that money wont be touched until they're at least 18 which means it will grow over that period of time. Then you tell me what American should worry about having a $5k deductible? Now you might say that "Well if that HSA is locked down against personal consumption what stops Joe Blow from blowing that money just like he would some 3rd party payers money?" Well you unlock at some age in the future so if he does spend it wisely on healthcare and have a lot left over he can use it for non healthcare purposes(hell even just having at is an inheritable asset would handle a lot of it).

So obviously the goals are to:
1) Make sure that people can afford the care if needed
2) Make sure they also have skin in the game, i.e. something they are giving up if they are going to receive care so that they have an incentive to not waste.

The key is reconciling these 2 things, not going full tilt for #1 and then dealing with the repercussions of ignoring #2 when it blows up in your face.

On the matter of fraud, the most common health insurance fraud I've seen is the doctor telling you don't worry about the deductible, and tacking on an extra charge for a procedure he didn't do to cover the cost of the deductible. I have no statistics on how widespread this is, but more than half the doctors I've visited or seen (I install a lot of computers at doctors' offices) will do it.

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.

Part of it is profits, part of it is cost of living differences, part of it is the U.S. being early adopters.

The cost of living index for the U.S. is about 2.5x higher for goods and 7x higher for housing than for India. If a dentist here tried to charge $50 for a root canal, he wouldn't be able to afford to live nor rent/buy a home. Malpractice liability is also a huge burden for individual doctors like a dentist. The insurance premiums alone eat up about a third of one's revenue. I suspect India isn't as sue-happy.

For newfangled equipment like MRIs, most of these technologies were developed in the U.S. and American doctors were the early adopters. Like the early adopters for HDTVs, they paid a fortune for it. The only reason you're able to enjoy $200 MRIs in India is because the cost of developing those newer, cheaper machines was paid for by the $2000 MRIs here in the U.S. (which was proportional to the cost of the older, more expensive machines when they first came out).

That the hospital hasn't upgraded to the newer, cheaper machine is due to sunk costs. The machine may be more expensive, but it's acquisition costs have already been paid for. The newer machine (which wasn't available when the older one was bought) represents additional money which needs to be spent. So it makes financial sense to continue to use the older machine until it becomes cost-effective to buy the newer one. The rapid rate of technological improvement creates the backward situation you cite (the cheaper machine being better than the more expensive machine). Not price gouging. It's just like with computers - a $500 computer you buy today is better than a $1500 computer you bought two years ago.

There are other small factors too (fraud, different standards and requirements, etc), so it's naive to attribute the entirety of the price difference to profit and gouging.

woolooloo said:   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.
I agree, but you're only looking at one side of the cost-sharing coin. The flip side is that you can't just pay for everything that's wrong with everyone. If you do that, at some point the cost of everyone's medical care would exceed the economic productivity of the country, and the economy would fall apart. There have to be limits on what's paid for. At some point you have to say, "this person's life is not worth saving." While "death panels" may be an unflattering thing to call it, functionally that's exactly what it is.

I was in Canada visiting a friend whose father was in the hospital with terminal cancer. One of the hospital staff approached him, explaining the dire situation his father was in, and perhaps it would be better for them to just let go and let him die. My friend was insulted and incensed by this. He and his father paid their taxes all their lives - now it was the government's turn to give them something in return. He wanted the hospital to do everything in its power to extend his father's life. And by trying to talk them into letting go, he felt the government was trying to shirk its responsibility to them.

I had to listen to his ranting about this the entire drive home. I listened politely, but couldn't really say much because I agreed with the hospital. His dad's prognosis was about 3 more months best case. At that point IMHO, you're doing a disservice to your fellow citizens (or insurance pool in the U.S.) by continuing to consume health care resources for a lost cause. But my friend complained loudly to the hospital, and to their credit they paid for the extra treatment he felt his father was entitled to. His father passed away a month later.

So if everyone shares your medical costs, then the flip side is that everyone also gets to have a say in whether or not you are entitled to certain medical treatment. (note: Canada lets you supplement the basic level of government-paid health care with private health insurance, for those seeking treatment above and beyond what the government has decided it will pay for.)

BrodyInsurance said:   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.

This is another thing that's bugged me - people trying to skirt around the Constitution by passing little laws which individually don't violate the Constitution, but taken as a whole do. If this is really that important, then do it the proper way - amend the Constitution to allow it. Passing a Constitutional Amendment was deliberately made hard to insure we didn't stray too far from the "tried and true" formula without widespread public consensus. If you don't have enough consensus for a Constitutional Amendment, you have no business passing these little laws which try to skirt it.

Same goes for gun control. If the evidence is really that clear that gun control is needed, then present it to the public and you'll get widespread support for a Constitutional Amendment repealing the 2nd Amendment. If your evidence is not that compelling, then you need to re-evaluate your position on the issue. It's not like this is without precedent - Prohibition was added to the Constitution, then repealed.

fongo61 said:   If there's one thing I hate more than Students abusing their Financial Aid it's how the medical industry screws the American public. $18 for one blood test strip? or $1000 for a 4 mile ride to the hospital that's insane!
You're not paying $1000 for a 4 mile ride. You're paying $1000 for having two paramedics, the ambulance, and all the equipment inside maintained and on standby, plus the communications network which routed the ambulance to your home, plus the staff required to operate all that.

For the blood test strip, it's not just a strip with some chemicals on it. It's one that had a lot of R&D going into making it work just right, sterilization with airtight packaging, and with an expiry date after which all unused strips must be thrown out even if they might still work.

I agree the prices are exorbitant, but it's not "just" a test strip or "just" a 4 mile ride.

woolooloo said:   dshibb said:   
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.


State risk pools have been around for over 30 years and the problems still exist - so much for that "solution".

Let's play a little game, you have 10 healthy people who are paying for health insurance, their health care costs are X per year. One gets sick and his cost is now 100*X per year. He's been paying his insurance premium all along, and the point of having insurance is to distribute risk. You would have the 9 healthy people continue to only pay premiums that cover just their health care costs and send the one person who was unfortunate enough to get sick to a risk pool that has substandard coverage, higher premiums, and is subsidized by the government (guess who pays for that?).

Let me ask a question (and I know it is math and might be hard for you) - regardless of the solution, how much is now being spent on health care? 109*X...

But in your "solution", the poor guy who was playing the game all along and paying his dues now not only has to deal with being sick, he now gets crappy insurance, pays through the nose for it, and everyone else is indirectly paying a share of it anyways through the Government subsidy. Wow, that's great.

Your argument that community rating will necessarily raise the total cost of health care is red herring, the total amount spent is the same no matter the solution. The only difference is who pays for what share of it (and whether it is directly through premiums or indirectly through taxes). You argue that the poor healthy people shouldn't have to pay more - they are healthy, why should they have to pay for some unlucky bloke who got sick? Look, what's the point of paying for health insurance at all if you are healthy? Because you know there is a chance that you too could end up getting sick and you don't want to be left holding the bag if that happens. And that's the entire point of insurance, to distribute risk, yet here you are saying that people who actually do get sick should in fact be thrown out of the system and be left holding the bag. I can't help but hold a glimmer of hope that this comes your way soon, then let's see you be so smug.

Bottom line, if you have been playing the game and paying your risk premiums, then the game shouldn't get to crap on you and spit you out when you do get unlucky and get sick.

And yes, I also understand all the problems with ObamaCare and how it will encourage healthy people to not have insurance and just pay the penalty, I'm not saying it is perfect. I'm saying that I'm glad that something is finally being done to address the problems that have been plaguing families dealing with these issues for so long. I don't think this is the final solution, not by a longshot, but at least it is step towards a solution and that is better than we've had.


You're response is so loaded with bull$hit it's unbelievable.

First of all it is a *fact* that community rating states pay multiples of higher premiums for everyone than even state high risk pool people in non community rating states. So you can argue around that all you want to, but that is the truth.

Second, high risk pool insurance is not 'crappy insurance'. It's governed by the same pork rules that govern private insurance. It's going to pay for whatever you need just like any other insurance and it's across the board better than some 1990s HMO.

Third, typical of a central planner you discount behavior change and you don't understand how risk is priced. Have you ever looked at buying individual insurance before. Ever notice how if you move from let's say $500 deductible to $1000 deductible the price changes astronomically, but if you move from $5000 deductible to $7000 deductible the price doesn't change much? Do you know why that is? It's because a low deductible at the front end causes a larger portion of the population to not care about getting value and spending healthcare dollars wisely(which represents huge cost differences to an insurance carrier). If you get sick you represent a bigger risk to the overall system with overutilization. If you have higher co-pays for example with a higher maximum out of pocket you will be a more active participant in obtaining value in your own healthcare as you deal with your health issues. This represents huge savings on the system overall and that is why you're absolutely wrong that the same amount of money will be spent regardless.


And this: woolooloo said: I can't help but hold a glimmer of hope that this comes your way soon

Makes you a terrible person who can't hold his own in an argument.


Lastly, if that ever happens to me I'd be happy that I was in a high risk pool state with a **lower premium** than in a community rating state with a higher premium(oh wait I don't have that choice anymore).

woolooloo said:   
And yes, I also understand all the problems with ObamaCare and how it will encourage healthy people to not have insurance and just pay the penalty, I'm not saying it is perfect. I'm saying that I'm glad that something is finally being done to address the problems that have been plaguing families dealing with these issues for so long. I don't think this is the final solution, not by a longshot, but at least it is step towards a solution and that is better than we've had.


But the legislation passed isn't going to solve the problem... health costs are continuing to rise and burden families even more. Who cares if well intentioned legislation is being passed to "deal with issues" if the unintended consequences are actually making things worse.

brettdoyle said:   woolooloo said:   
And yes, I also understand all the problems with ObamaCare and how it will encourage healthy people to not have insurance and just pay the penalty, I'm not saying it is perfect. I'm saying that I'm glad that something is finally being done to address the problems that have been plaguing families dealing with these issues for so long. I don't think this is the final solution, not by a longshot, but at least it is step towards a solution and that is better than we've had.


But the legislation passed isn't going to solve the problem... health costs are continuing to rise and burden families even more. Who cares if well intentioned legislation is being passed to "deal with issues" if the unintended consequences are actually making things worse.


He just prefers to be blissfully ignorant and believe in his fairy tale. Costs are going up. Hard working Americans are going to be burdened more not less.

glxpass said:   BrodyInsurance said:   
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.

Please say why you like that "this [raising deductibles] would cost unhealthy people more". There are plenty of "unhealthy people" whose health issues are no fault of their own, both children and adults. This is much more complex than a matter of personal financial incentives and your oft-repeated phrase "skin in the game".

We need to address healthcare costs from a variety of perspectives, and encouraging healthy habits is only one component, one that should be approached as a matter of education, not penalizing individuals.


You asked the question and then you started arguing without giving me a chance to answer. If you truly want my opinion on this instead of an argument, let me know, and I'll give it.

stanolshefski said:   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...


All states will have subsidized exchanges. The question is whether they will set up their own. If they don't the federal government will set one up for them. Again, all 50 states will have exchanges.

BrodyInsurance said:   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.


Real simple. If you don't buy insurance, you don't get the insurance subsidy. That's why subsidies are sometimes also referred to as 'soft mandates.'

dshibb said:   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.


I didn't say I believed that. I have neither the data, nor the time or inclination to roll my own forecast. What I was saying is that assuming we get to 98%, that's more than enough to make community rating work. Obviously whether or not community rating will work will depend on how high we get the coverage percentage.

enc0re said:   dshibb said:   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.


I didn't say I believed that. I have neither the data, nor the time or inclination to roll my own forecast. What I was saying is that assuming we get to 98%, that's more than enough to make community rating work. Obviously whether or not community rating will work will depend on how high we get the coverage percentage.


Assuming that does happen(which it wont) it still wouldn't be a success if financially the costs threatened to break the back of not only the average American, but also the US government. In which case that hypothetical 98% would not be able to hold, it will crack under that kind of pressure and then you'll have all of the financial problems you created + a falling coverage rate. You can see this playing out in Massachusetts as we speak. It's not sustainable. It's destroying balance sheets all over the state including the state itself.

Also I just don't get how the biggest issue for Americans is cost of healthcare and people that make a big deal out if it completely ignore that issue(like you are right now) in favor of only looking at coverage rates.


P.S. For all those people who think it's just greedy insurance companies conspiring against them(which is just hilariously dumb) 90% of individuals in Massachusetts, which now has the most expensive insurance in the country by far and rising fast, is covered by non profit insurers. They state is trying to restrict the growth of health insurance premiums in several instances and all it led to was a wholesale shutdown of the insurance market. The state is going to be forced into scaling back the bill because it's literally going to crush them if they don't.

BrodyInsurance said:   glxpass said:   BrodyInsurance said:   
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.

Please say why you like that "this [raising deductibles] would cost unhealthy people more". There are plenty of "unhealthy people" whose health issues are no fault of their own, both children and adults. This is much more complex than a matter of personal financial incentives and your oft-repeated phrase "skin in the game".

We need to address healthcare costs from a variety of perspectives, and encouraging healthy habits is only one component, one that should be approached as a matter of education, not penalizing individuals.


You asked the question and then you started arguing without giving me a chance to answer. If you truly want my opinion on this instead of an argument, let me know, and I'll give it.

I'm fine with just:

Please say why you like that "this [raising deductibles] would cost unhealthy people more". There are plenty of "unhealthy people" whose health issues are no fault of their own, both children and adults.

I look forward to your response, although I reserve the right to argue with it.

enc0re said:   BrodyInsurance said:   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.


Real simple. If you don't buy insurance, you don't get the insurance subsidy. That's why subsidies are sometimes also referred to as 'soft mandates.'


Thanks. I thought that you might have been saying something along the lines that the subsidies were only available if someone bought insurance right away (use it now or lose it). Even with the subsidies, I don't think that it changes the equation that much. The bulk of the people who qualify for the subsidy will also be exempt from the fine if they don't buy coverage. Therefore, it still makes sense for them not to buy coverage until it is actually needed. What matters is the cost after the subsidy vs. the penalty.

glxpass can I ask you a question?

Genuinely curious on your thoughts this isn't designed some trap or anything like that.

Do you think in order to keep costs under control and prevent overutilization "unhealthy people" need to have some form of incentive to discourage unnecessary expenditure?

If yes, how would that ideal incentive structure look to you?

This is the type of question that can facilitate productive dialogue and discussion which is so lacking in a topic like this.

dshibb said:   glxpass can I ask you a question?

Genuinely curious on your thoughts this isn't designed some trap or anything like that.

Do you think in order to keep costs under control and prevent overutilization "unhealthy people" need to have some form of incentive to discourage unnecessary expenditure?

If yes, how would that ideal incentive structure look to you?

This is the type of question that can facilitate productive dialogue and discussion which is so lacking in a topic like this.

I've no problem with trying to answer questions, especially if it helps to clarify.my own thinking on an issue. My main concern is that it's difficult to differentiate between people whose health issues are independent of the lifestyle they lead and people whose health issues might be attributed to unhealthy lifestyle choices. Intuitively, I feel that there isn't always a definitive answer to the question. Assuming I'm correct, is charging higher premiums or increasing one's deductible really the right approach? My gut says: "No."

I'd like to see people incentivized to adopt healthy behaviors, but I feel that trying to do so financially (or at least make that the main thrust) might be impractical, especially when we are constantly exposed to advertising that encourages us to consume unhealthy foods and promotes risky behavior. I feel the most at-risk people we have for lifestyle-related health problems are those who live at or near the poverty level and are on some kind of assistance. Unfortunately, that cycle of poverty that tends to extend from one generation to the next seems hard to break.

Essentially, I see high healthcare costs that derive from unhealthy behaviors as a societal issue. IMO, education is a necessary component of any "cure" to this problem, but not the only component. When we can figure out an integrated approach or approaches to addressing our societal problems, then I think that will at least solve some healthcare cost issues. I'm aware this all seems very idealistic, yet I think I think the recognition of common ideals is a necessary first step. With all the political partisanship seemingly driving our legislative processes, it's a challenge!

glxpass said:   dshibb said:   glxpass can I ask you a question?

Genuinely curious on your thoughts this isn't designed some trap or anything like that.

Do you think in order to keep costs under control and prevent overutilization "unhealthy people" need to have some form of incentive to discourage unnecessary expenditure?

If yes, how would that ideal incentive structure look to you?

This is the type of question that can facilitate productive dialogue and discussion which is so lacking in a topic like this.

I've no problem with trying to answer questions, especially if it helps to clarify.my own thinking on an issue. My main concern is that it's difficult to differentiate between people whose health issues are independent of the lifestyle they lead and people whose health issues might be attributed to unhealthy lifestyle choices. Intuitively, I feel that there isn't always a definitive answer to the question. Assuming I'm correct, is charging higher premiums or increasing one's deductible really the right approach? My gut says: "No."

I'd like to see people incentivized to adopt healthy behaviors, but I feel that trying to do so financially (or at least make that the main thrust) might be impractical, especially when we are constantly exposed to advertising that encourages us to consume unhealthy foods and promotes risky behavior. I feel the most at-risk people we have for health problems are those who live at or near the poverty level and are on some kind of assistance. Unfortunately, that cycle of poverty that tends to extend from one generation to the next seems hard to break.

Essentially, I see high healthcare costs that derive from unhealthy behaviors as a societal issue. IMO, education is a necessary component of any "cure" to this problem, but not the only component. When we can figure out an integrated approach or approaches to addressing our societal problems, then I think that will at least solve some healthcare cost issues. I'm aware this all seems very idealistic, yet I think I think the recognition of common ideals is a necessary first step. With all the political partisanship seemingly driving our legislative processes, it's a challenge!


Interesting answer, but you sort of answered a related question and not the one I mentioned.

There are basically 2 drivers of increasing utilization of healthcare. The first is unhealthy behaviors which you answered. The other is overuse of healthcare services by those that require maybe only some healthcare services or maybe none at all and this is what I was referring to with the question I was asking.

So once a person needs care or thinks they need care they go to a hospital. If there is no incentive for them to be *discerning* about what treatment they receive vs. all treatment that is available than costs for the system explode.

I mean do you realize how many people show up to the emergency room and all they need is some basic over the counter medicine? I've actually read studies before on just the cost of that and what percentage of emergency room visits they represent(much higher than you would think).

So given this to better frame the question I asked I'll re post it here, and sorry for not making it more clear before:

dshibb said:   
Do you think in order to keep costs under control and prevent overutilization "unhealthy people" need to have some form of incentive to discourage unnecessary expenditure?

If yes, how would that ideal incentive structure look to you?

This is the type of question that can facilitate productive dialogue and discussion which is so lacking in a topic like this.

Please say why you like that "this [raising deductibles] would cost unhealthy people more". There are plenty of "unhealthy people" whose health issues are no fault of their own, both children and adults.

First of all, just because something isn't one's fault, doesn't mean that the burden shouldn't fall on their shoulders. The choice, regardless of the subject at hand, is to either pay for the things that we use or have others pay for the things that we use.

It isn't my fault if my child has expensive medical issues. It isn't his fault either. However, if I choose to bring children into this world isn't it my responsibility to take care of them? It shouldn't be your responsibility to take care of my child.

That being said, I understand that medical issues aren't the same as many other things and we don't want someone being bankrupt because of medical conditions. High deductibles very much work out as a compromise.

It makes sense to me that those who use more medical services should pay more money than those who use less services. Doesn't that make sense to you? Imagine that all health insurance had a $10,000 deductible. If someone needed hundreds of thousands of medical care, health insurance would still be paying most of their cost. However, if you routinely have $5,000 in medical expenses a year and I have $2,000, should I be splitting this cost with you? I don't think so.

If you choose to have 12 kids and I have 2 kids, should we each be paying for 7 kids for insurance?

If I am the person who is routinely having $5,000 in medical expenses instead of $2,000, there is incentive for me to try to do things to try to become healthier. We don't need the government pushing us to do what they think is healthier.

What if someone can't afford a high deductible? Well if they can't afford the deductible, they also couldn't afford the insurance if the plan wasn't high deductible. High deductible plans come with a much lower premium.

High deductibles, in my opinion, have a few major advantages.

1)It makes health insurance "health insurance" instead of "pre-paid medical care".
2) It puts people and their doctors more in charge of their medical care than the insurance company.
3)It gets rid of most of the B.S. about what has to be covered.
4)It makes people care about costs.
5)There is a financial incentive to take care of one's health.
6)The amount of money that one pays in medical expenses is more in line with the amount of actual medical care received.
7)It makes people more personally responsible for their medical care.

BrodyInsurance said:   
4)It makes people care about costs.


Of everything Brody just said this one is probably the most important.

If you don't like high deductibles and co-pays than you better find a different way to get people to care about costs because otherwise people who don't care about cost have unlimited demand and costs explode.

dshibb said:   glxpass said:   dshibb said:   glxpass can I ask you a question?

Genuinely curious on your thoughts this isn't designed some trap or anything like that.

Do you think in order to keep costs under control and prevent overutilization "unhealthy people" need to have some form of incentive to discourage unnecessary expenditure?

If yes, how would that ideal incentive structure look to you?

This is the type of question that can facilitate productive dialogue and discussion which is so lacking in a topic like this.

I've no problem with trying to answer questions, especially if it helps to clarify.my own thinking on an issue. My main concern is that it's difficult to differentiate between people whose health issues are independent of the lifestyle they lead and people whose health issues might be attributed to unhealthy lifestyle choices. Intuitively, I feel that there isn't always a definitive answer to the question. Assuming I'm correct, is charging higher premiums or increasing one's deductible really the right approach? My gut says: "No."

I'd like to see people incentivized to adopt healthy behaviors, but I feel that trying to do so financially (or at least make that the main thrust) might be impractical, especially when we are constantly exposed to advertising that encourages us to consume unhealthy foods and promotes risky behavior. I feel the most at-risk people we have for health problems are those who live at or near the poverty level and are on some kind of assistance. Unfortunately, that cycle of poverty that tends to extend from one generation to the next seems hard to break.

Essentially, I see high healthcare costs that derive from unhealthy behaviors as a societal issue. IMO, education is a necessary component of any "cure" to this problem, but not the only component. When we can figure out an integrated approach or approaches to addressing our societal problems, then I think that will at least solve some healthcare cost issues. I'm aware this all seems very idealistic, yet I think I think the recognition of common ideals is a necessary first step. With all the political partisanship seemingly driving our legislative processes, it's a challenge!


Interesting answer, but you sort of answered a related question and not the one I mentioned.

There are basically 2 drivers of increasing utilization of healthcare. The first is unhealthy behaviors which you answered. The other is overuse of healthcare services by those that require maybe only some healthcare services or maybe none at all and this is what I was referring to with the question I was asking.

So once a person needs care or thinks they need care they go to a hospital. If there is no incentive for them to be *discerning* about what treatment they receive vs. all treatment that is available than costs for the system explode.

I mean do you realize how many people show up to the emergency room and all they need is some basic over the counter medicine? I've actually read studies before on just the cost of that and what percentage of emergency room visits they represent(much higher than you would think).

So given this to better frame the question I asked I'll re post it here, and sorry for not making it more clear before:

dshibb said:   
Do you think in order to keep costs under control and prevent overutilization "unhealthy people" need to have some form of incentive to discourage unnecessary expenditure?

If yes, how would that ideal incentive structure look to you?

This is the type of question that can facilitate productive dialogue and discussion which is so lacking in a topic like this.

I suspect our basic assumptions differ. I think the key to lowering healthcare costs lies in education rather than financial incentives. Financial incentives such as reduction of premiums, can however motivate employers to promote healthy lifestyles among their employees.

I admit this becomes much harder when dealing with the unemployed or retired, but the object is the same: to put a value on good health for its own sake.

I'd welcome thoughts on how to accomplish this. I think that's the direction we need to take.

glxpass said:   dshibb said:   glxpass said:   dshibb said:   glxpass can I ask you a question?

Genuinely curious on your thoughts this isn't designed some trap or anything like that.

Do you think in order to keep costs under control and prevent overutilization "unhealthy people" need to have some form of incentive to discourage unnecessary expenditure?

If yes, how would that ideal incentive structure look to you?

This is the type of question that can facilitate productive dialogue and discussion which is so lacking in a topic like this.

I've no problem with trying to answer questions, especially if it helps to clarify.my own thinking on an issue. My main concern is that it's difficult to differentiate between people whose health issues are independent of the lifestyle they lead and people whose health issues might be attributed to unhealthy lifestyle choices. Intuitively, I feel that there isn't always a definitive answer to the question. Assuming I'm correct, is charging higher premiums or increasing one's deductible really the right approach? My gut says: "No."

I'd like to see people incentivized to adopt healthy behaviors, but I feel that trying to do so financially (or at least make that the main thrust) might be impractical, especially when we are constantly exposed to advertising that encourages us to consume unhealthy foods and promotes risky behavior. I feel the most at-risk people we have for health problems are those who live at or near the poverty level and are on some kind of assistance. Unfortunately, that cycle of poverty that tends to extend from one generation to the next seems hard to break.

Essentially, I see high healthcare costs that derive from unhealthy behaviors as a societal issue. IMO, education is a necessary component of any "cure" to this problem, but not the only component. When we can figure out an integrated approach or approaches to addressing our societal problems, then I think that will at least solve some healthcare cost issues. I'm aware this all seems very idealistic, yet I think I think the recognition of common ideals is a necessary first step. With all the political partisanship seemingly driving our legislative processes, it's a challenge!


Interesting answer, but you sort of answered a related question and not the one I mentioned.

There are basically 2 drivers of increasing utilization of healthcare. The first is unhealthy behaviors which you answered. The other is overuse of healthcare services by those that require maybe only some healthcare services or maybe none at all and this is what I was referring to with the question I was asking.

So once a person needs care or thinks they need care they go to a hospital. If there is no incentive for them to be *discerning* about what treatment they receive vs. all treatment that is available than costs for the system explode.

I mean do you realize how many people show up to the emergency room and all they need is some basic over the counter medicine? I've actually read studies before on just the cost of that and what percentage of emergency room visits they represent(much higher than you would think).

So given this to better frame the question I asked I'll re post it here, and sorry for not making it more clear before:

dshibb said:   
Do you think in order to keep costs under control and prevent overutilization "unhealthy people" need to have some form of incentive to discourage unnecessary expenditure?

If yes, how would that ideal incentive structure look to you?

This is the type of question that can facilitate productive dialogue and discussion which is so lacking in a topic like this.

I suspect our basic assumptions differ. I think the key to lowering healthcare costs lies in education rather than financial incentives. Financial incentives such as reductionn of premiums, can however motivate employers to promote healthy lifestyles among their employees.

I admit this becomes much harder when dealing with the unemployed or retired, but the object is the same: to put a value on good health for its own sake.

I'd welcome thoughts on how to accomplish this on this one. I think that's the direction we need to take.


I don't think that is possible if we're being honest. Also notice I didn't ask for your opinion on which source of cost was the largest. I was just asking you how you would deal with overutilization cost.

So you actually think that having the ability to show up to a hospital and spend unlimited amounts of someone else's money regardless of whether or not you need is perfectly fine for the system? That there is no problem there and that doesn't matter?

I'm not trying to be difficult or anything, but surely you don't mean that unlimited demand for quantity and quality of healthcare is a non issue, right?

Look glxpass, I believe you have the capacity to really think of various solutions and ideas to address this that fit within your own moral scope of the issue. I mean seriously putting aside whatever political bull$hit that everybody else wants to go back and forth over, I actually think you and many other people on here are smart enough to come up with original ideas that better address this problem than what we currently have.

And that problem is how to reconcile these 2 things the best way we can:
1) To make sure that we have a healthcare system where we feel comfortable with moral question of people being able to get treatment
and
2) For people to act like the money that is being spent to better their health is their own

Because honestly if tomorrow people acted like $300k to extend their life by a couple of months or $10k to see a specialist for a small issue was their money most of the time they would choose something different(and the systemic cost problem would subside immediately), but at the same if a treatment was really important to them they could have the financial capacity to do it if they really wanted it. That is the question right there. And I think you're better than most people who would prefer to keep this topic within their own 'political comfort zone' because if I can put aside any sense of my political comfort zone so can you. My side of aisle has a political comfort zone about life not being fair and I tend to agree with that, but I'm willing to set that aside to acknowledge that there is something right about trying to make sure anybody can get care regardless of their means. But you should also rise to the challenge and agree that there is something important about people taking responsibility for finding relative value in the large sums of money that are spent on their behalf. Being sick should not be an excuse to spend other people's money irresponsibly while seeking care.

Now I've engaged in this type of conversation with numerous people and most refuse to rise to the challenge and that has generally speaking left me a little jaded about people's desire to put the bull$hit aside and rise to that same challenge. I guess, surprise me!

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.

too bad it's horribly biased. hated liberal garbage touted as being unbiased when it's clearly so.

you know what sucks about all of this? If there was one thing, ONE THING that should have been mandated was that everyone that gets a health plan in the usa has to get an HSA and a qualifying bank account and fund that account by a certain amount every year. This way people are FORCED to save money, can see first hand what happens when they save money seeing how it grows, but they cannot spend it unless for qualified medical expense and in the end the people wind up with a nice retirement fund if they live a healthy, uneventful life. But NOOO instead we create a law that creates a dis-incentive to save money and instead consume MORE services! I mean holy shit, could you imagine if Obama care didn't require people to get health insurance but instead gave you $500 or shit even $3000 bucks a year if you get a health plan and then that money goes into an HSA? They could even have a rewards program to go along with it so that annually, if you live healthy, meet certain health goals at your physical, you get a "prize"(Gift card, etc.) or some shit?

goku2 said:   you know what sucks about all of this? If there was one thing, ONE THING that should have been mandated was that everyone that gets a health plan in the usa has to get an HSA and a qualifying bank account and fund that account by a certain amount every year. This way people are FORCED to save money, can see first hand what happens when they save money seeing how it grows, but they cannot spend it unless for qualified medical expense and in the end the people wind up with a nice retirement fund if they live a healthy, uneventful life. But NOOO instead we create a law that creates a dis-incentive to save money and instead consume MORE services! I mean holy shit, could you imagine if Obama care didn't require people to get health insurance but instead gave you $500 or shit even $3000 bucks a year if you get a health plan and then that money goes into an HSA? They could even have a rewards program to go along with it so that annually, if you live healthy, meet certain health goals at your physical, you get a "prize"(Gift card, etc.) or some shit?

Arguably the best healthcare system in the world in terms of outcomes and improvement(determined by quality vs. cost) each year(latter being something practically every country in the world seems to struggle with) does that. That is Singapore.


Also the original idea for Massachusetts was to essentially expand and voucherize Medicaid into higher deductibles and co-pays and then have the government fund an HSA for every one of them with the savings on the coverage. The HSA part was scrapped. Voucherizing Medicaid was scrapped. And then they overlaid a sliding scale voucher on top of the Medicaid program(Medicaid at less than 150% of poverty level and voucher between 150% to 300%) where they only approved plans to work with the voucher if they had extremely low deductibles and co-pays. And people wonder why costs are now exploding in Massachusetts even though coverage rates have increased. Now the legislation on the docket is to try to introduce price controls into their healthcare market to rectify their mistake, but that isn't going to work either. The first bill lowered individual responsibility resulting in increased demand, the higher demand meant more and larger claims filed, the *non profit* health insurers costs exploded, the health insurers were forced to pass than along to consumers with sky rocketing premiums, and now they're trying to save to the insurers by introducing price controls so that they can transfer the losses onto the hospitals balance sheets, but that will only blow them up. I mean you just can't make this stuff up!

brettdoyle said:   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


The young and healthy, young adults, don't typically buy insurance, were at about 24% in 2010. That's part of the issue. You've got the oldest and typically the sickest population receiving universal care, 1.6% uninsured over the age of 65, and the youngest and healthiest typically outside the market, either because they don't qualify for coverage or because they would rather gamble than pay the cost. The young adults that do have insurance, especially now, receive it from their parents.

Back to hospital costs. For one thing, insurance for a hospital is not minor. Hospitals with an ER have to run 24/7 365 with a certain level of minimal staff.. whether there is one person who walks through the door or 30 from a bad accident one night. There are a fair amount of people using the ER as their standard level of care. Technically, hospitals can certainly turn someone away without an urgent or emergent kind of issue at the er, but their a risks involved with that, especially if someone who presented with an earache collapses the next day... again the insurance problem.

There is no magic bullet to the problem, especially when most arguments only want to address the demand side... when the supply side needs a lot of attention. There are not enough providers in this country. The average age of nurses is increasing and even though I personally know of a lot of nursing programs with long wait lists, there don't seem to be as many coming into the industry as going out.

I suspect our basic assumptions differ. I think the key to lowering healthcare costs lies in education rather than financial incentives. Financial incentives such as reduction of premiums, can however motivate employers to promote healthy lifestyles among their employees.

I admit this becomes much harder when dealing with the unemployed or retired, but the object is the same: to put a value on good health for its own sake.

I'd welcome thoughts on how to accomplish this. I think that's the direction we need to take.


I think that you are asking the impossible. What you are proposing is your results will be based upon the actions of a group. Let's try a couple of analogies.

100 people are going out to dinner at Applebee's. They are allowed to order whatever they like. The bill will be shared equally. What would you recommend to make the total bill the lowest?

100 students are in a class. The teacher tells them that they will all receive the same grade. What would you do to make this grade the highest?

100 people are sharing medical expenses. Each person is going to pay 1% of the total medical expenses. What would you do to lower this cost?

If I wanted dinner to be at the lowest possible charge, the grades to be the highest average, or the medical costs to be the lowest, I would change it from a group sharing approach and make everyone responsible for their own costs/grades.

I am relatively certain that this will do much more than any possible suggestion that you might have. Additionally, any suggestion that you might have can probably be combined with people being responsible for their own costs/grades.

I understand that a complete individual cost responsibility doesn't work for health care because we do want people who need care, but can't afford that care, to be able to get it. I am just suggesting that we make people responsible for themselves as much as possible. A high deductible plan does this. Everyone is responsible for themselves, but only up to a certain point. We recognize the necessity of some cost sharing.

This is how that would work with those other analogies.
Applebees: The price of everyone's entree's would be shared, but if someone chooses to buy drinks, appetizers, or desserts, the individual would pay themselves.
Grades: 50% of the cost will be based upon individual effort and 50% of the grade is based upon the class project.
Health Care: Everyone is responsible for their own costs. All costs above $X are shared.

but the object is the same: to put a value on good health for its own sake.
Why should we be putting a value on that? I mean that it is certainly something that I value. It doesn't have to be a value that you have. If you care more about sitting around eating bonbons and watching tv, why does that need to be an issue for everybody else? The object is to lower medical expenses. If the bill is being shared equally, valuing good health can very easily mean a huge increase in medical expenses. If someone else is footing the bill, why would you not get every single preventive medical measure done? You certainly would have zero incentive to do any cost/benefit analysis.

“The second source that Fish gave us was a chart from the U.S. Department of Health & Human Services’ Agency for Healthcare Research and Quality. That chart showed exactly what Bates said: Twenty percent of the population accounts for 80 percent of total expenditures. Maybe even more shockingly, the chart also shows that just 5 percent of the population accounts for 50 percent of all expenditures.”


Politifact

A little algebra. Assume $1MM in heath care cost for 100 people.

5 use $500K or $100,000 each
15 use $300K or $20,000 each
80 use $200K or $2,500 each

The minimum cost to insure this group is $10,000 each. So the 5 people using an average of $100K and the 15 using $30K buy insurance. Unless the penalties are large, the other 80 have a huge incentive to avoid insurance as they would be paying four times their actual costs for insurance. If this happens, the cost policy for 20 people who use 800K is 40K per person. There is now an incentive for the 15 to drop coverage. Now we have 5 people using $500K in care and their policy will cost at least $100K per year.

I left out administrative costs, profit, waste, etc. in my example. The differences in medical cost may be overstated, since some members of the high cost groups may be covered by Medicare and would therefore not be part of the same risk pool as younger people.

If the government heavily subsidizes the insurance policies for high risk patients, it increase deficits. If the government imposes community rating, the costs are shifted to healthier people “IF” they buy insurance.



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