This isn't tinfoil hat stuff I'm about to write. In this post I'm going to attempt to point out why I think the US is on a collision course with a complete and total collapse of the economy, and it all boils down to one single issue: health care. Also, a quick note ahead of time: This isn't all about me. The part about me and my experience is just the setup.
Anyone that lives here in the US will realize why health care here is such a big issue. Every year premiums go up and up, coverages shrink, and out of pocket costs keep rising. As an example, a 20 minute CT scan of my abdomen the other day costed $1603....AFTER insurance discount.
First, an introduction to the way health insurance works for those not familiar. In the US we use private insurance companies for coverage to pay for health care. If you aren't insured, doctors can charge your whatever they want. Insurance plans help by stepping in to contract with various doctors, providers, etc. and those contracts set 'discounted rates', which determines how much a provider is allowed to charge. They are able to do this because they are a union of sorts. They represent large groups of people. If you don't accept plan XYZ, you probably won't get any business from someone in that group. As an example of this, if I weren't insured, that CT scan could have easily been $10,0000. Instead, the contracted rate was determined to be $1,603. The insurance company then determines how that payment will be structured. In a high deductible health plan, you have a fixed amount you must pay before any type of coverage kicks in. There are also other plans where you pay a fixed amount ('co-pay') or a percentage ('co-insurance') or maybe a structure that factors in all 3. After your amount is billed, the insurance companies pay the rest (notice I said 'billed' and not 'paid'...this will become important later). Note that there are some other factors at play as well related to your primary care provider, but we'll ignore those in this post.
For those of us that are employed, we typically can receive insurance at a discounted rate, and of that rate, the employer can opt to pay a percentage of that. These premiums are typically taken out of our paychecks on a pre-tax basis.
Now my employer happens to be transparent with how much all this costs. For good reason, an employee should know how much their total benefits package is worth. Your pay may be say, $50,000, but between health insurance, life insurance, 401k, etc. you could easily be worth $80,000/year to the employer. Now I'm fudging some numbers a bit here to remain anonymous, but let's just say I have a great job. I earn a 6 figure salary, yet I have a high deductible health plan. We use something called an HSA card at our company. HSA cards are credit cards that can only be used for medical expenses, and eventually, retirement. My employer contributes to that as well. In addition, my employer pays a generous 90% of all health care premiums for this high deductible plan (the average is 50%).
Going back to last year. I had a VERY bad year. I nearly died due to a surgical mistake and multiple corrections were required. The insurance company close to 1 million on my behalf. The issue is that our company is a startup, so we aren't that big of a company, and the insurance company paid out more money just in my case than they've taken in premiums from all the employees over the past 3 years COMBINED. This was just me. Two other people had similar medical problems last year. This means that they've effectively lost money from us since the day we signed up with them. Coming up on our open enrollment period (the only time you can switch insurers, this prevents you from hopping between providers from month to month or cancelling after a month of coverage) our provider elected to more than double our premiums. We had to find another carrier, and we did. The problem is, MY issues haven't been resolved. The new carrier is going to face an even worse situation. Their plans and premiums are the same as the old one. I've already hit my deductible and I'm very close to hitting my max out of pocket.
This isn't just about myself or the company I work for. This is happening everywhere, and it's coming to a head. Some people estimate that within 10-15 years, insurance premiums will exceed most peoples' paychecks. On top of that, hospitals/doctors have been pushing back, refusing such steep discounts. I was lucky enough to be an industry that tracks this data back in the day and we already saw this happening. Premiums were going up drastically on a yearly basis (and this was well before 'obamacare'). Doctors were beginning to push back more and more. The demand in healthcare is simply too high for supply to catch up, so this trend will continue.
As you can read from the lengthy post I've written so far, you'll instantly see the problem. Eventually healthcare will be completely un-affordable. Now people have made suggestions. A few of these are below, along with the drawbacks of each one.
My favorite suggestion (and the most popular one from democrats and independents) is the concept of going to single payer. A single insurance company that everyone enrolls in. The problem is, that, thanks to case law, you can't force a private practicing business entity to accept this single payer insurance. They have rights too, and one of those is a right to refuse service. This means single payer won't work. You can sign up for single payer, but good luck finding a doctor to treat you. In addition, hundreds of thousands or even millions of jobs will be lost. This could toss our economy into a recession or depression.
Another popular suggestion is to crack down on the pricing of hospitals, doctors, etc. This is actually VERY difficult to do and will likely get thrown out in court. Even if it doesn't, it will worsen the core issue: shortage of health care. Less people will choose to be doctors, and you'll have to wait months to get treatment. An example of this is a psychiatrist. All the psychiatrists in my network are not accepting new patients. You have to go out of network and pay hundreds of dollars to see one.
Another one that got brought up briefly is raising the HSA per year contribution limit. Right now you can contribute something like $6900 per year to your HSA. That's it. Some republicans want to triple that limit High Deductible Health Plans cost significantly less (half in my case) than traditional health plans, so the theory is the money goes into your HSA instead of the towards the insurance company and you use that to pay for your high deductible.. The issue? Deductibles are rising faster than HSA limits, and co-insurances are creeping up. A person making $24,000/year cannot contribute as much to their HSA as a person making $240,000/year.
So how does this bring us to collapse? Well, we can't solve health care. It's not possible. The constitution, along with interpreted case law forbids it. The government can't control the people, and a corporation is considered a person. This is backed by case law. Medical costs will keep rising (and with good reason, we have some very real and very hard problems to solve...like Cancer). It's a law of economics. There is no way to make it work. Eventually the poor, providing services to the middle class and the rich, will be unable to even get a broken bone fixed. (I came from a life of poverty, my family has been sued multiple times for being only able to pay $10/mo towards their medical bills...they won the $10/rate, but at that rate, they will never pay off their debt...they become entrapt. They could file bankruptcy, but they don't want to, and you can only do that every 10 years for chapter 7 anyway) Eventually middle and upper middle classes will be affected. They already are. I'm considered upper middle class and health care is an issue for me.
The only real solution I can think of is to kill off medicare AND social security completely along with part of federal taxes. Turn the entire deduction into a percentage of income system, and dump a fixed amount back into an HSA account that everyone would be mandated to have. Make the laws more strict on HSA so that it can ONLY be used for healthcare (prescription meds, doctors visits, etc.) until the age of 65 (technicalities exist that allow you to use it for anything, but at a 20% tax penalty). Keep the percentage adjusted with inflation of healthcare costs...and add a catchup bonus to anyone that falls critically ill. even that is only a bandaid.
Anyone have any thoughts? How do we fix this mess? I have to go for now, duty calls, but, thoughts?
Anyone that lives here in the US will realize why health care here is such a big issue. Every year premiums go up and up, coverages shrink, and out of pocket costs keep rising. As an example, a 20 minute CT scan of my abdomen the other day costed $1603....AFTER insurance discount.
First, an introduction to the way health insurance works for those not familiar. In the US we use private insurance companies for coverage to pay for health care. If you aren't insured, doctors can charge your whatever they want. Insurance plans help by stepping in to contract with various doctors, providers, etc. and those contracts set 'discounted rates', which determines how much a provider is allowed to charge. They are able to do this because they are a union of sorts. They represent large groups of people. If you don't accept plan XYZ, you probably won't get any business from someone in that group. As an example of this, if I weren't insured, that CT scan could have easily been $10,0000. Instead, the contracted rate was determined to be $1,603. The insurance company then determines how that payment will be structured. In a high deductible health plan, you have a fixed amount you must pay before any type of coverage kicks in. There are also other plans where you pay a fixed amount ('co-pay') or a percentage ('co-insurance') or maybe a structure that factors in all 3. After your amount is billed, the insurance companies pay the rest (notice I said 'billed' and not 'paid'...this will become important later). Note that there are some other factors at play as well related to your primary care provider, but we'll ignore those in this post.
For those of us that are employed, we typically can receive insurance at a discounted rate, and of that rate, the employer can opt to pay a percentage of that. These premiums are typically taken out of our paychecks on a pre-tax basis.
Now my employer happens to be transparent with how much all this costs. For good reason, an employee should know how much their total benefits package is worth. Your pay may be say, $50,000, but between health insurance, life insurance, 401k, etc. you could easily be worth $80,000/year to the employer. Now I'm fudging some numbers a bit here to remain anonymous, but let's just say I have a great job. I earn a 6 figure salary, yet I have a high deductible health plan. We use something called an HSA card at our company. HSA cards are credit cards that can only be used for medical expenses, and eventually, retirement. My employer contributes to that as well. In addition, my employer pays a generous 90% of all health care premiums for this high deductible plan (the average is 50%).
Going back to last year. I had a VERY bad year. I nearly died due to a surgical mistake and multiple corrections were required. The insurance company close to 1 million on my behalf. The issue is that our company is a startup, so we aren't that big of a company, and the insurance company paid out more money just in my case than they've taken in premiums from all the employees over the past 3 years COMBINED. This was just me. Two other people had similar medical problems last year. This means that they've effectively lost money from us since the day we signed up with them. Coming up on our open enrollment period (the only time you can switch insurers, this prevents you from hopping between providers from month to month or cancelling after a month of coverage) our provider elected to more than double our premiums. We had to find another carrier, and we did. The problem is, MY issues haven't been resolved. The new carrier is going to face an even worse situation. Their plans and premiums are the same as the old one. I've already hit my deductible and I'm very close to hitting my max out of pocket.
This isn't just about myself or the company I work for. This is happening everywhere, and it's coming to a head. Some people estimate that within 10-15 years, insurance premiums will exceed most peoples' paychecks. On top of that, hospitals/doctors have been pushing back, refusing such steep discounts. I was lucky enough to be an industry that tracks this data back in the day and we already saw this happening. Premiums were going up drastically on a yearly basis (and this was well before 'obamacare'). Doctors were beginning to push back more and more. The demand in healthcare is simply too high for supply to catch up, so this trend will continue.
As you can read from the lengthy post I've written so far, you'll instantly see the problem. Eventually healthcare will be completely un-affordable. Now people have made suggestions. A few of these are below, along with the drawbacks of each one.
My favorite suggestion (and the most popular one from democrats and independents) is the concept of going to single payer. A single insurance company that everyone enrolls in. The problem is, that, thanks to case law, you can't force a private practicing business entity to accept this single payer insurance. They have rights too, and one of those is a right to refuse service. This means single payer won't work. You can sign up for single payer, but good luck finding a doctor to treat you. In addition, hundreds of thousands or even millions of jobs will be lost. This could toss our economy into a recession or depression.
Another popular suggestion is to crack down on the pricing of hospitals, doctors, etc. This is actually VERY difficult to do and will likely get thrown out in court. Even if it doesn't, it will worsen the core issue: shortage of health care. Less people will choose to be doctors, and you'll have to wait months to get treatment. An example of this is a psychiatrist. All the psychiatrists in my network are not accepting new patients. You have to go out of network and pay hundreds of dollars to see one.
Another one that got brought up briefly is raising the HSA per year contribution limit. Right now you can contribute something like $6900 per year to your HSA. That's it. Some republicans want to triple that limit High Deductible Health Plans cost significantly less (half in my case) than traditional health plans, so the theory is the money goes into your HSA instead of the towards the insurance company and you use that to pay for your high deductible.. The issue? Deductibles are rising faster than HSA limits, and co-insurances are creeping up. A person making $24,000/year cannot contribute as much to their HSA as a person making $240,000/year.
So how does this bring us to collapse? Well, we can't solve health care. It's not possible. The constitution, along with interpreted case law forbids it. The government can't control the people, and a corporation is considered a person. This is backed by case law. Medical costs will keep rising (and with good reason, we have some very real and very hard problems to solve...like Cancer). It's a law of economics. There is no way to make it work. Eventually the poor, providing services to the middle class and the rich, will be unable to even get a broken bone fixed. (I came from a life of poverty, my family has been sued multiple times for being only able to pay $10/mo towards their medical bills...they won the $10/rate, but at that rate, they will never pay off their debt...they become entrapt. They could file bankruptcy, but they don't want to, and you can only do that every 10 years for chapter 7 anyway) Eventually middle and upper middle classes will be affected. They already are. I'm considered upper middle class and health care is an issue for me.
The only real solution I can think of is to kill off medicare AND social security completely along with part of federal taxes. Turn the entire deduction into a percentage of income system, and dump a fixed amount back into an HSA account that everyone would be mandated to have. Make the laws more strict on HSA so that it can ONLY be used for healthcare (prescription meds, doctors visits, etc.) until the age of 65 (technicalities exist that allow you to use it for anything, but at a 20% tax penalty). Keep the percentage adjusted with inflation of healthcare costs...and add a catchup bonus to anyone that falls critically ill. even that is only a bandaid.
Anyone have any thoughts? How do we fix this mess? I have to go for now, duty calls, but, thoughts?
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