The state of healthcare on the working poor

[thraashman]

No it's not. The free market system would reduce costs and provide better healthcare.

In its ideal form perhaps, just like socialism in its ideal form would have everyone happy and equal. But because both those exist in the real world where some people are lazy, some are greedy, and some are just bad people; an unregulated free market ends up with companies that let people die en masse to make a couple extra dollars. We've seen it happen in the US when we don't properly regulate businesses and they do things that massively ruin lives.

 

[Incorruptible]

In its ideal form perhaps, just like socialism in its ideal form would have everyone happy and equal. But because both those exist in the real world where some people are lazy, some are greedy, and some are just bad people; an unregulated free market ends up with companies that let people die en masse to make a couple extra dollars. We've seen it happen in the US when we don't properly regulate businesses and they do things that massively ruin lives.

It sounds like you're advocating for socialism. The free market is the only system that works. The US was built on the free market.

If you like socialism so much then go move to Europe.

 

[Texashiker]

My point was that you were claiming cost increases were due to the ACA, which is implausible considering that cost increases have slowed since implementation.

With the implementation of the 80/20 rule (costrofit ratio), insurance companies have a vested interested in driving up the cost of health care.

Under the new health care law 80% of the money insurance companies collect has to go towards medical payments, 20% goes to actual profit.

If a cancer treatment cost $80k, charge $20k for profit, for a total of $100k.

But if that cancer treatment cost $800k, then profit goes up to $200k, for a total of $1 million.

The 80/20 rule has forced insurance companies to issue refunds in California. But I wonder how long that is going to last?

In other words, the more health care cost, the more profits insurance companies will make.

 

[fskimospy]

With the implementation of the 80/20 rule (costrofit ratio), insurance companies have a vested interested in driving up the cost of health care.

Under the new health care law 80% of the money insurance companies collect has to go towards medical payments, 20% goes to actual profit.

If a cancer treatment cost $80k, charge $20k for profit, for a total of $100k.

But if that cancer treatment cost $800k, then profit goes up to $200k, for a total of $1 million.

I don't think you understand how this works. The 80/20 ratio is for the collection of premiums, not for the cost of procedures. If the cost of cancer treatment goes up that makes things worse for the company, not better.

If your argument is that they will increase premium prices in order to make more profit, well that's covered by competition through the insurance exchanges. If they raise their prices too much they will lose their customers.

 

[IronWing]

It sounds like you're advocating for socialism. The free market is the only system that works. The US was built on the free market.

No it wasn't. The US was built on socialism, corporatism, and corruption. From canals to railroads to mining to power generation to roads to modern farming to banking to modern medicine, government handouts, subsidies, and outright theft of public resources led the way.

 

[Texashiker]

If your argument is that they will increase premium prices in order to make more profit, well that's covered by competition through the insurance exchanges. If they raise their prices too much they will lose their customers.

The health insurance industry "as a whole" has a vested interest in driving up the cost of medical care.

As payments to hospitals go up, the insurance companies can charge higher premiums.

 

[fskimospy]

The health insurance industry "as a whole" has a vested interest in driving up cost.

No, the insurance industry as a whole has a vested interest in driving DOWN costs, as that is money out of their pocket. They have a vested interest in driving up PREMIUMS, but that is true for literally every industry in the history of the world. Every industry wants to drive up the price that people pay them for their services.

When multiple people compete in a marketplace, this competition lowers prices despite every actor independently wanting higher prices. If you are saying that the insurance industry is working together to increase prices this is in fact a crime and we should immediately prosecute.

 

[glenn1]

My point was that you were claiming cost increases were due to the ACA, which is implausible considering that cost increases have slowed since implementation. While there is already evidence that the ACA is helping to lower insurance premium costs through increased competition, I was just pointing out that your statement lacked factual support.

No, I said they are going up, not that they already have. It's been on the books for such a short period of time that the effects aren't much in evidence yet (for good or bad). Your example of quoting projected premiums will be fine, when and if those rates actually materialize and are sufficient to support a healthy market. Which also significantly depends on having enough enrollees whose policies are economically positive for the issuer (e.g. relatively young and healty policyholders with low expected costs), so consumer adoption is a key success driver where achievement is still very much TBD.

Fact is, there's plenty of "ifs" in all the above presumptions. What is not really in question is that healthcare markets are subject to supply and demand like everything else. And given that a primary goal of Obamacare is expanding the pool of healthcare covered people, my point that prices will go up seems relatively secure to the level of being a tautology. That the government will be paying subsidies for the poor is already a proof of the concept that higher costs are there, but consumers may not pay them directly.

Also, some of the extra Obamacare demand has not yet materialized; for example, the pre-existing health condition "shall issue" decree is experiencing a slow adoption rate, probably because the subsidies aren't yet in place. Once you have more than 114K enrollees whose premiums paid won't cover their costs, you'll see the inflationary stresses build in the system.

 

[glenn1]

No, the insurance industry as a whole has a vested interest in driving DOWN costs, as that is money out of their pocket. They have a vested interest in driving up PREMIUMS, but that is true for literally every industry in the history of the world. Every industry wants to drive up the price that people pay them for their services.

When multiple people compete in a marketplace, this competition lowers prices despite every actor independently wanting higher prices. If you are saying that the insurance industry is working together to increase prices this is in fact a crime and we should immediately prosecute.

That would be true in an unregulated market. However, it looks like Obamacare is trying to turn the health insurance market into the equivalent of a regulated utility, where prices are a legislatively approved level of costs+allowed profit. In that case, driving up costs generally that they'd simply pass-thru to customers would be valid strategy.

 

[fskimospy]

That would be true in an unregulated market. However, it looks like Obamacare is trying to turn the health insurance market into the equivalent of a regulated utility, where prices are a legislatively approved level of costs+allowed profit. In that case, driving up costs generally that they'd simply pass-thru to customers would be valid strategy.

First, such collusion would be a crime. Second, driving up costs generally would be a valid strategy if the entire industry were able to do so collectively, but driving up costs is most certainly individually irrational.

So I guess I would amend my statement to "absent the insurance industry electing to commit multiple felonies, this is not an issue".

 

[Wreckem]

<serious thread>

My stepson works for a major reseller of home building supplies. Instead of leaching off the system he pays for health insurance through his job. The family qualifies for medicaid, but they choose not to use it.

A couple of months ago there was a change in the insurance policy. Instead of paying your typical $20 - $30 copay, he has to pay for the whole visit himself until he reaches a certain amount.

My oldest grandson has some bad allergies and has been getting a lot of ear infections lately. After several trips to the family doctor, the doctor referred the child to a ear nose and throat specialist.

The first visit was something like $167 out of pocket.
Next visit to have tubes put in kids ears is going to be something like $300
Then a follow up visit for another $167

My wife and I told my stepson to sign up for medicaid.

My stepson is trying to do the right thing by providing for his family. But it seems the company is working against its employees to force them onto public assistance.

If I understand it right, under the new obamacare people will be forced to buy healthcare. How are the working poor supposed to afford expensive copays, buy the insurance, and pay for everyday living expenses?

Thats how insurance works. Co-pay is just for the visit, not anything extra they do during the visit.

 

[fskimospy]

No, I said they are going up, not that they already have. It's been on the books for such a short period of time that the effects aren't much in evidence yet (for good or bad). Your example of quoting projected premiums will be fine, when and if those rates actually materialize and are sufficient to support a healthy market. Which also significantly depends on having enough enrollees whose policies are economically positive for the issuer (e.g. relatively young and healty policyholders with low expected costs), so consumer adoption is a key success driver where achievement is still very much TBD.

Sure. So you agree that there isn't evidence to support what you said?

Fact is, there's plenty of "ifs" in all the above presumptions. What is not really in question is that healthcare markets are subject to supply and demand like everything else. And given that a primary goal of Obamacare is expanding the pool of healthcare covered people, my point that prices will go up seems relatively secure to the level of being a tautology. That the government will be paying subsidies for the poor is already a proof of the concept that higher costs are there, but consumers may not pay them directly.

There is a ton more to the law other than simply increasing the number of covered people. Furthermore, subsidizing premium cost is not an admission of increased costs, it is an attempt to shift how government spends money on health care for the poor.

 

[Texashiker]

Thats how insurance works. Co-pay is just for the visit, not anything extra they do during the visit.

My daughter went to the same specialist, and our out of pocket was $30.

That $167 my stepson paid was for the first visit and no procedures.

No, the insurance industry as a whole has a vested interest in driving DOWN costs, as that is money out of their pocket. They have a vested interest in driving up PREMIUMS, but that is true for literally every industry in the history of the world. Every industry wants to drive up the price that people pay them for their services.

But the new health care law prevents insurance companies from driving down cost, as it also drives down their profit margin.

 

[glenn1]

First, such collusion would be a crime. Second, driving up costs generally would be a valid strategy if the entire industry were able to do so collectively, but driving up costs is most certainly individually irrational.

So I guess I would amend my statement to "absent the insurance industry electing to commit multiple felonies, this is not an issue".

They wouldn't need to commit a crime as they'd have the government's full support and enthusiastic backing; it would be "we're increasing benefits!" rather than "you'll be paying higher premiums for the coverage that we retain a percentage of." No need to collude to raise specific prices when you can raise prices generally by allowing (or pushing consumers toward) more expensive options in the name of "choice."

 

[fskimospy]

They wouldn't need to commit a crime as they'd have the government's full support and enthusiastic backing; it would be "we're increasing benefits!" rather than "you'll be paying higher premiums for the coverage that we retain a percentage of."

That really doesn't make any sense. Not only would the government not be enthusiastic about premium price increases, but premium increases are most certainly not viewed as 'increasing benefits' now.

No need to collude to raise specific prices when you can raise prices generally by allowing (or pushing consumers toward) more expensive options in the name of "choice."

This doesn't make any sense either. An individual insurer that pushes its customers to undergo more expensive medical procedures will either have uncompetitive premium prices or will swiftly go out of business. The only way this would work is if all insurers collectively pushed their customers towards more expensive procedures simultaneously, which is again, a crime.

 

[thraashman]

It sounds like you're advocating for socialism. The free market is the only system that works. The US was built on the free market.

If you like socialism so much then go move to Europe.

Well at least you prove that you have no reading comprehension yet again. Notice how I drew a parallel to free market and socialism as their ideals. Then, because the topic at hand was free market, I pointed out how in practice a pure free market doesn't work because people ruin it. Now, anyone with a brain could also see I was pointing out that a pure socialist society also doesn't work (because people are greedy or lazy or just bad people). And the US doesn't have a pure free market. We have bits of free market, bits of socialism, chunks of corporatism and many other things. We're a melting pot of both cultures and ideas.

An attempt at a pure free market would invariably lead to a distopian environment where corporations ruled the country. The closest I'm aware of was the robber barons era of America. We've seen what attempts at purely communist environments lead to (they're never really socialist environments in attempt), places like Cuba and North Korea. A melting pot leaning capitalist ends up being the US and a melting pot leaning socialist ends up like Europe.

Here's a clip from an HBO series that should make one think about how just claiming how America is the greatest country doesn't necessarily make it true.
https://www.facebook.com/photo.php?v=116533608533163

 

[Incorruptible]

No it wasn't. The US was built on socialism, corporatism, and corruption. From canals to railroads to mining to power generation to roads to modern farming to banking to modern medicine, government handouts, subsidies, and outright theft of public resources led the way.

No it wasn't. Why are you insulting Capitalism when you benefit from it?

 

[Texashiker]

No it wasn't. Why are you insulting Capitalism when you benefit from it?

Capitalism only works when greed is kept at bay.

 

[glenn1]

Sure. So you agree that there isn't evidence to support what you said?

The evidence doesn't exist yet to prove or disprove either of our positions; we are both working at the level of abstract theory.

There is a ton more to the law other than simply increasing the number of covered people. Furthermore, subsidizing premium cost is not an admission of increased costs, it is an attempt to shift how government spends money on health care for the poor.

The goal of Obamacare is to expand healthcare insurance coverage to the population. By intent and defintion you are adding to the demand side of the equation, so prices will go up unless you've repealed the most consensus-accepted principle in economics. The additional costs are either borne by forcing the young and healthy into buying uneconomic (for them) healthcare policies or people with government subsidizes.

Your attempt to conflate government spending on healthcare with future spending on health insurance is irrelevant; it makes little difference whether the government prepays for healthcare via "health insurance" or after care is delivered. Indeed paying fee-for-service after the fact is likely cheaper because then you don't need to also assume the opportunity cost for all the other insurance coverages not used. If your argument is that providing health "insurance" would lead to the poor using more primary care that's less costly, then the government could do that directly rather through a hugely inefficient "insurance" system that just pads costs.

 

[glenn1]

This doesn't make any sense either. An individual insurer that pushes its customers to undergo more expensive medical procedures will either have uncompetitive premium prices or will swiftly go out of business. The only way this would work is if all insurers collectively pushed their customers towards more expensive procedures simultaneously, which is again, a crime.

Obamacare mandates what coverage is included. Lobby Congress to force inclusion of some new benefit (e.g. inpatient mental health, orthodontist care, etc) or improved benefit (3 days inpatient after birth instead of 2) and it becomes an industry standard by default they can pass along costs for.

 

[fskimospy]

The goal of Obamacare is to expand healthcare insurance coverage to the population. By intent and defintion you are adding to the demand side of the equation, so prices will go up unless you've repealed the most consensus-accepted principle in economics. The additional costs are either borne by forcing the young and healthy into buying uneconomic (for them) healthcare policies or people with government subsidizes.

Your statement would only be true if expanding insurance coverage was the only thing the bill did. Since that is incorrect, your statement just isn't comprehensive enough to actually address the consequences of the bill.

Your attempt to conflate government spending on healthcare with future spending on health insurance is irrelevant; it makes little difference whether the government prepays for healthcare via "health insurance" or after care is delivered. Indeed paying fee-for-service after the fact is likely cheaper because then you don't need to also assume the opportunity cost for all the other insurance coverages not used. If your argument is that providing health "insurance" would lead to the poor using more primary care that's less costly, then the government could do that directly rather through a hugely inefficient "insurance" system that just pads costs.

While I agree that the insurance system is inefficient, you are talking about future costs relative to what we have now, which is that same insurance system. My argument about spending on health care vs. spending on health insurance is absolutely not irrelevant unless you believe that the care profiles of people with and without insurance are identical, which they most certainly are not.

If your argument is that the most efficient way to cover everyone is by the government adopting a universal fee for service model I agree with you, that's what I've been advocating for for a long time. That's irrelevant to this discussion however.

 

[fskimospy]

Obamacare mandates what coverage is included. Lobby Congress to force inclusion of some new benefit (e.g. inpatient mental health, orthodontist care, etc) or improved benefit (3 days inpatient after birth instead of 2) and it becomes an industry standard by default they can pass along costs for.

Now you're arguing something completely different than what Texashiker was saying. If you think that companies try to change government regulations in order to increase profits regardless of their actual utility, all I can say is 'no duh'.

 

[glenn1]

Your statement would only be true if expanding insurance coverage was the only thing the bill did. Since that is incorrect, your statement just isn't comprehensive enough to actually address the consequences of the bill.

Somehow the GAO has already managed to weigh in on the early adoption of insurance expansion, and it's not good for your position. Or maybe those were exactly the consequences you had in mind?

While I agree that the insurance system is inefficient, you are talking about future costs relative to what we have now, which is that same insurance system. My argument about spending on health care vs. spending on health insurance is absolutely not irrelevant unless you believe that the care profiles of people with and without insurance are identical, which they most certainly are not.

If your argument is that the most efficient way to cover everyone is by the government adopting a universal fee for service model I agree with you, that's what I've been advocating for for a long time. That's irrelevant to this discussion however.

My position would actually be mandatory catastropic insurance for all (I'm agnostic on whether to pay for it from taxpayer funds as a universal benefit) and changing the current employer-linked health insurance tax benefit into a "Health Savings Account" type vessel. That provides:

1. True health insurance for all (low rate coverage against only truly unforeseen medical events instead of what is effectively pre-paid medical expense accounts administered by insurance companies.

2. A client-driven system of medical care delivery where patients and doctors make rational economic cost-benefit decisions instead of central planning from an insurance plan or government.

Basically anything we can do to break open the black box of medical costs and spending in this country is a good thing. The problem isn't that consumers are paying for healthcare rather than the government, it's that most of the actors don't know or care about costs.

 

[sunzt]

:raises hand:
Question!

Why should the employer be paying for his medical coverage in the first place?

 

[sm625]

Who pays for the coverage is beside the point. The point is that the medical cartels have established a strong monopoly and have used the levers of government to strengthen their position and drive up prices to absurd levels. And no one is even interested in breaking that monopoly or lowering prices. People only argue over who should pay.