The real reason insurance companies don't like the ACA...

[ivwshane]

Interesting read and I've certainly never heard of this. Anyone have any insight to offer?

http://m.huffpost.com/us/entry/8735042

Before we jump into their financial statements, let's first take a moment to understand the insurance business. Insurance is a bet you make with a large company that something bad will happen to you. It's a strange bet, because both you and the company hope you'll lose. Just to make sure you'll lose, insurance companies hire high-priced financial talent to guarantee their odds of winning; they know exactly how to rig the game.
So imagine my surprise when I started analyzing insurance company financial records and found that the big insurance companies have spent years getting out of the commercial health insurance business. This explains why they're rejecting Obamacare: it turns out the last thing they really wanted was millions of new commercial customers to insure.

But if you don't qualify for Medicare or Medicaid, insurance companies are a lot less interested in you. Commercial membership for these companies are up only about 13 percent since 2005, and with those policies, they've found a way to make someone else write the checks. Most commercial policies that insurance companies now manage are Administrative Service Contracts (ASCs) which aren't even actual insurance.

With ASCs, insurance companies aren't motivated to get the best deal on the price of a medical service because it's not their money. They still knock a lot off the sticker price but, in health care, it's hard to know a good deal because hospital markups are insanely high.

How does this affect you? If you're an employee, expect your employer-sponsored premiums to keep going up because the insurance company that runs your employer's ASC has no motive to negotiate good prices for your health care. Employers don't realize this, because they're not experts in health care costs. That pretty much guarantees rising health costs.

This seems to explain a lot for why costs continue to rise despite more people in the pool which should be spreading the costs making everyone's piece smaller.

 

[waggy]

I recall people saying that was one very good possibility of happening and getting flamed...

 

[ivwshane]

I recall people saying that was one very good possibility of happening and getting flamed...

I'd love to see that post.

 

[TheVrolok]

Sounds reasonable.

 

[theeedude]

Private insurance based health care system just doesn't work. It's like trying to put a square peg in a round hole.

 

[kage69]

Private insurance based health care system just doesn't work. It's like trying to put a square peg in a round hole.

I used to adamantly disagree with this. Not any more.

 

[Fenixgoon]

I used to adamantly disagree with this. Not any more.

agreed. one painful experience for me was enough to know how abysmal it is and how much easier and cheaper single payer would be.

 

[Knowing]

A system that links the highest healthcare spenders to some multiple of the lowest while guaranteeing certain expenditures is necessarily going to result in price increases across the board, and that's before you factor in the increased demand for subsidized services.

Color me surprised that there's another mechanism stopping this abortion of legislation from "working" "properly."

 

[Jhhnn]

Meh. The author overlooks the likelihood that insurance co's won't pay any more for procedures provided under ASC's than under the regular insurance they offer. The agreement may well stipulate that. Why would they? It's all settled in advance- hospitals know what the insurance co will pay as part of their network agreement. Insurers need to do that well to be competitive in that side of the market & with HMO's as well. ASC plans are then priced below traditional because of reduced risk.

The author also uses numbers in misleading ways-

One of my patients got a bill for nearly $135,000 covering a hospitalization at UCSF last February. Thanks to an ASC, her husband's employer paid about a third of that (over $45,000). But UCSF's financial records show that they normally get only about 27 percent on their bills, so $37,000 might have been enough.

They *average* 27% on their bills. That includes a lot of medical bankruptcies & huge write-offs to induce the non-insured to pay something.

There's this-

Take my own case. My wife's ASC (through Blue Shield) was billed $4,716 for my colonoscopy. Blue Shield knocked it down to only $2,750 -- Which is over 4 times what Medicare pays for the same procedure. And my wife's employer is a hospital (UCSF). Why would a hospital allow such a terrible deal for a medical procedure? Probably because the employee benefits manager at USCF doesn't consult with the hospital's billing manager. So even a hospital can get taken by this system because, like many large businesses, they often write checks without taking the time to ask enough questions.

The question posed is absurd. The reason why the hospital favors that payment schedule is that they'll make more money from other group plans performing the procedure than they'll ever lose on their own group in the process.

That's a no-brainer.

 

[DrPizza]

This seems to explain a lot for why costs continue to rise despite more people in the pool which should be spreading the costs making everyone's piece smaller.

That is rather interesting, and perhaps explains why others are whining about insurance costs increasing, but I haven't seen a huge increase at all. My insurance, as I understand it, is a large pooled risk of a bunch of schools; and the plan is managed by an insurance company.

 

[fskimospy]

A system that links the highest healthcare spenders to some multiple of the lowest while guaranteeing certain expenditures is necessarily going to result in price increases across the board, and that's before you factor in the increased demand for subsidized services.

Color me surprised that there's another mechanism stopping this abortion of legislation from "working" "properly."

Dramatic declines in the uninsured population at a lower cost than initially estimated seems to be 'working' to me by any reasonable standard. Color me surprised that you neglected to mention any of that.

By the way, great job with your prediction of terrible construction sector growth for the US. lol.

 

[SMOGZINN]

You know how I know insurance companies like that ACA? It passed.

 

[HumblePie]

I'd love to see that post.

Go read my original posts about when the ACA was coming out and I said this would happen. That the ACA does nothing to assure the first part of the title, affordability, at all.

Insurance has always been a scam. Hospitals administrators are scammers as well because they have to be.

The ONLY way the ACA would have ever started on the track to making affordable healthcare would be based off several things.

1) hospitals HAVE to post prices and profit margins for every possible procedure they can do. That info has to be made public.
2) hospital suppliers HAVE to do the same.

Those two things would have done far more for healthcare affordability for the average person than forcing everyone to be on insurance. That was the dumbest fucking thing ever.

 

[HumblePie]

You know how I know insurance companies like that ACA? It passed.

They like it because nothing in the law stated that they had to drop prices, just accept more people. Even those that require healthcare costs all the time. So they just raise, raise, raise to make up for it and then some.

 

[werepossum]

Go read my original posts about when the ACA was coming out and I said this would happen. That the ACA does nothing to assure the first part of the title, affordability, at all.

Insurance has always been a scam. Hospitals administrators are scammers as well because they have to be.

The ONLY way the ACA would have ever started on the track to making affordable healthcare would be based off several things.

1) hospitals HAVE to post prices and profit margins for every possible procedure they can do. That info has to be made public.
2) hospital suppliers HAVE to do the same.

Those two things would have done far more for healthcare affordability for the average person than forcing everyone to be on insurance. That was the dumbest fucking thing ever.

Agreed, but the ACA was never about reducing health care costs; that was simply the Big Lie told to the dumb masses to make supporting it politically viable. The ACA was about insuring the uninsured. On average, the uninsured are either less able to pay the premiums or more likely to need above-average services, so everyone with at least half a brain knew that everyone's insurance costs (on average) had to go up. That doesn't make it necessarily bad though; it should not be acceptable to have Americans unable to access health care between the very affordable and life-saving. So far, the cost increases seem to me to be reasonable given the results, although some people really, really took it in the shorts so that other people could get it cheap or free.

We can always address health care costs in another bill, but I doubt there is much that can be done before we go to single payer. At that point, government will impose rationing to drive down costs. One could make an argument that government-imposed rationing would be inherently more fair than our current system of rationing.

One more thing: It's sad that our leaders have to lie to us and tell us that OUR costs will go down just to make us willing to help our fellow Americans who are poor and/or have expensive pre-existing conditions.

 

[HumblePie]

I will also say, hospitals like to charge for many things you don't even know they are charging for until much later.

For example, with the recent birth of my kid I asked several hospitals what the price would be submitted to my insurance company for services rendered on a normal vaginal birth with no complications and a 2 day stay. I wanted to know the full price of everything so I could calculate my portion. Most hospitals I asked wouldn't even give me that price. They said it was too complicated to tell me. Bullshit.

A few did. The one I went with stated that the price after negotiations with my insurance company was always around $3000 for a normal vaginal birth with a 2 day stay and no complications. I then made sure to ask if that included all care for the birth, my wife, and the baby. I was told it did. I asked this during a open house walkthrough meeting the hospital offers at the beginning of each month to prospective parents. I recorded it with a room full of people. Yes I am this anal about stuff for a reason.

So in the recording it is clearly heard what I asked for and what I was told.

I decided to go with that hospital as my portion of the bill would be about $1000 to have my kid.

Have the kid and everything works out just fine. Normal vaginal birth, no complications, and 2 day stay. I get the bill about a month later from my insurance company which shows original cost of $12,000~ that was negotiated down to $3000~ and my portion was exactly what I had calculated.

So I setup a payment plan and pay it off.

Then I get another bill 4 months after that. It was for $2000 on my part for the care of my child for those 2 days. I said, "Fuck you!" to the hospital and refused to pay it. They kept trying to tell me after they charge separately for birth and baby care. I said no no no.. I have on record a recording from one of the finance people that work for you that stated differently. It went back and forth. They kept offering me "lower" portions I could pay, but I adamantly refused to pay them a dime on that other bill. In the end, they lost.

Still, if I hadn't done what I had done I would be up shit creek without a paddle and probably on the hook for another $2K. It was pure bullshit. This is why most hospitals don't like to give up front prices to customers because they can just keep tacking on more stuff to drive up their bills to charge customers.

 

[Double Trouble]

Interesting read and I've certainly never heard of this. Anyone have any insight to offer?

http://m.huffpost.com/us/entry/8735042



This seems to explain a lot for why costs continue to rise despite more people in the pool which should be spreading the costs making everyone's piece smaller.

Employers don't realize this, because they're not experts in health care costs.

Yeah, because multibillion dollar corporations are in the habit of not trying to reduce one of their large expense items, and surely they won't hire the expertise to understand the process.

Seriously, people believe this tripe?

 

[ivwshane]

So in your original post you specifically mentioned ASC's and you talked about how their use would increase and how their use would cause prices to keep rising?

Go read my original posts about when the ACA was coming out and I said this would happen. That the ACA does nothing to assure the first part of the title, affordability, at all.

Insurance has always been a scam. Hospitals administrators are scammers as well because they have to be.

The ONLY way the ACA would have ever started on the track to making affordable healthcare would be based off several things.

1) hospitals HAVE to post prices and profit margins for every possible procedure they can do. That info has to be made public.
2) hospital suppliers HAVE to do the same.

Those two things would have done far more for healthcare affordability for the average person than forcing everyone to be on insurance. That was the dumbest fucking thing ever.

 

[ivwshane]

They like it because nothing in the law stated that they had to drop prices, just accept more people. Even those that require healthcare costs all the time. So they just raise, raise, raise to make up for it and then some.

Absolutely false. The law specifically states that 80% of costs have to go towards actual health care with anything over that being required to be refunded.

https://www.healthcare.gov/health-care-law-protections/rate-review/

 

[ivwshane]

Yeah, because multibillion dollar corporations are in the habit of not trying to reduce one of their large expense items, and surely they won't hire the expertise to understand the process.

Seriously, people believe this tripe?

By all means show us how every company using this service had had an expert to keep costs down. Otherwise you are making a pretty big assumption. You are also assuming companies know that they are being ripped off.

 

[HumblePie]

Absolutely false. The law specifically states that 80% of costs have to go towards actual health care with anything over that being required to be refunded.

https://www.healthcare.gov/health-care-law-protections/rate-review/

That was later added, not part of the original ACA bill that was signed in. There were parts of the bill that allowed for this stuff to be added later. But initial rates for many people shot up by quite a bit when the ACA was first started.

As far as the 80%/20% rule addition, there isn't any oversight yet. So there it is completely honor based upon the insurance companies. So yah....

 

[crashtech]

I don't believe the way healthcare is expected to be delivered even represents an insurable risk anymore. It's just a matter of time before either a new payroll tax or a much increased Medicare tax will fund baseline healthcare for most Americans.

 

[theeedude]

We already pay enough taxes to cover everyone. Other developed countries provide universal government health care for what we spend on just Medicare and Medicaid.

 

[crashtech]

We already pay enough taxes to cover everyone. Other developed countries provide universal government health care for what we spend on just Medicare and Medicaid.

You are kidding yourself if you think that will happen here without a massive government takeover of the entire healthcare system. Perhaps that is what you mean, though.

 

[HumblePie]

You are kidding yourself if you think that will happen here without a massive government takeover of the entire healthcare system. Perhaps that is what you mean, though.

Pretty much, and in response to both this post and your previous one...

That will never happen. The insurance scheme makes way too much money that is currently setup and as such they have lobbyists that made laws to protect their industry as it is. The current crappy system isn't going anywhere so long as dollars count for more than votes. That is the case with many a crappy system we have in place in this country.