What is it about pooled risk that people don't understand?
10
Health care in the US speaks volumes of just how the system is rigged against the poor and middle class citizens who struggle every day trying to make ends meet. A single payer system would bring in millions of people and the burden would be shared. We are a nation divided and the chasm continues to grow as so many of the citizens remain clueless and support a system that keeps them i chains. A nation that has huge numbers of unhealthy people with little or no access to a healthcare is wasting a huge resource. For no other reason than this, I am supporting Sanders.
7
The United States pays substantially more for health care per person than any other civilized country in the world. We also cover fewer citizens that any other civilized country in the world. We are the only country that has such a thing as medical bankruptcy. We are the only country with for profit health insurance. We are the only country with for-profit medicine. We have many medical industry CEO's as well as physicians making over a million dollars a year. Our medical-industrial complex is an absolute disgrace. The system is broken. The fix will require too many fat cats having to take a hair cut, therefore, there will be no fix. Good luck citizen.
24
Health costs in this country are partially out of control because of the price of drugs that we are convinced we need to ameliorate our health issues caused by poor nutrition and lack of exercise.
On the subject of big pharma...the Chinese have a very cost effective way to deal with many common health problems - the system is called Traditional Chinese Medicine and its practitioners are present throughout this country: they are acupuncturists and herbalists.
If these TCM practitioners had a lobby as effective as chiropractors we would all be much healthier because my ACA policy would pay for 10 acupuncture visits a year instead of to a chiropractor.
I believe Dr. Andrew Weill was the first to make this point.
On the subject of big pharma...the Chinese have a very cost effective way to deal with many common health problems - the system is called Traditional Chinese Medicine and its practitioners are present throughout this country: they are acupuncturists and herbalists.
If these TCM practitioners had a lobby as effective as chiropractors we would all be much healthier because my ACA policy would pay for 10 acupuncture visits a year instead of to a chiropractor.
I believe Dr. Andrew Weill was the first to make this point.
What Ms. Sanger-Katz is pleased to call "Health Insurance" is something that never has existed, nor ever will exist. It is no more possible to "insure" good health than to insure eternal life (notwithstanding Blaise Pascal's willingness to bet his stack on it!). Medical Insurance on the other hand is a businesslike method of protecting ones financial assets against ruinous medical expenses, according to the risk presented by the insured. This risk can be rather precisely estimated for a properly chosen pool of insured. The scheme promulgated by law in the ACA, has nothing to do with insurance properly so-called. It is simply a form of Eminent Domain whereby the financial value of an asset, good health, is seized, without however, any requirement of fair compensation. In order to grotesquely enlarge the pool, policy holders are required to obtain absurd forms of coverage, like pre-natal care for men, that they will never need.
3
You said, "Medical Insurance on the other hand is a businesslike method of protecting ones financial assets against ruinous medical expenses, according to the risk presented by the insured. This risk can be rather precisely estimated for a properly chosen pool of insured."
So, those good old individual policies that didn't cover prenatal care for men before Obamacare must have saved men a lot of money. Right?
So, those good old individual policies that didn't cover prenatal care for men before Obamacare must have saved men a lot of money. Right?
From the BCBS report: “Medical costs associated with caring for the new individual market enrollees were, on average, 19 percent higher than employer-based group members in 2014 and 22 percent higher in 2015.” This is a prime example of adverse selection - those purchasing ACA-qualified plans in the individual market, whether within or outside of the exchanges, must pay more than the cost of employer-sponsored insurance.
The flaw lies with our fragmented, multi-payer system of financing health care - a system that was perpetuated by the Affordable Care Act.
If we improved Medicare and then used it to cover everyone, adverse selection would be eliminated because we would all be in the same risk pool. Coverage would be affordable for each individual and family because it would be based on equitable tax policies.
The flaw lies with our fragmented, multi-payer system of financing health care - a system that was perpetuated by the Affordable Care Act.
If we improved Medicare and then used it to cover everyone, adverse selection would be eliminated because we would all be in the same risk pool. Coverage would be affordable for each individual and family because it would be based on equitable tax policies.
20
The people currently covered by employer provided health insurance would not be pleased with your proposal of "Medicaid for all." That is why the Democrats did not propose single payer.
The reason the exchange plans are in a death spiral is because they comprise two different groups of people. The ones who were previously insured were people who had assets to protect and thus bought health insurance while they were healthy and were able to retain it even of they got sick or incurred high medical expenses. This group is now paying substantially higher premiums because they have been combined with a group that waited until they were sick to obtain insurance and so were priced out of health insurance.
The only way that the Obamacare exchanges would work is if all of the healthy people currently covered under employer provided health insurance were included, which would bring the pool to 200 million instead of 11 million, with the bulk of the incremental folks being healthy.
The reason the exchange plans are in a death spiral is because they comprise two different groups of people. The ones who were previously insured were people who had assets to protect and thus bought health insurance while they were healthy and were able to retain it even of they got sick or incurred high medical expenses. This group is now paying substantially higher premiums because they have been combined with a group that waited until they were sick to obtain insurance and so were priced out of health insurance.
The only way that the Obamacare exchanges would work is if all of the healthy people currently covered under employer provided health insurance were included, which would bring the pool to 200 million instead of 11 million, with the bulk of the incremental folks being healthy.
2
You said, " they have been combined with a group that waited until they were sick to obtain insurance and so were priced out of health insurance." Prior to Obamacare, those who were sick were not "priced out of health insurance". They were not allowed to buy health insurance due to pre-existing conditions.
Another way to think about this is that the premiums of individual policy holders were artificially low before Obamacare because most of the sick population was excluded from coverage.
Another way to think about this is that the premiums of individual policy holders were artificially low before Obamacare because most of the sick population was excluded from coverage.
13
50% of medical expenditures are made on behalf of 5% of the population.
There are much more socially constructive ways to spend scarce dollars than providing every person with every medical test and procedure. It's a totally unsustainable, low yield model.
Those who feel that medical care is so essential should establish a huge charity that they can contribute large percentages of their income toward the vastly underperforming Medical Industrial Complex. Put your money where your mouth is. Don't spend other people's money.
I'd much rather my money go toward environmental protection and kids' than to Big Pharma, Big IVF, big Med Device, etc. Regressive.
There are much more socially constructive ways to spend scarce dollars than providing every person with every medical test and procedure. It's a totally unsustainable, low yield model.
Those who feel that medical care is so essential should establish a huge charity that they can contribute large percentages of their income toward the vastly underperforming Medical Industrial Complex. Put your money where your mouth is. Don't spend other people's money.
I'd much rather my money go toward environmental protection and kids' than to Big Pharma, Big IVF, big Med Device, etc. Regressive.
5
To quote Jimmy Carter: "The measure of a society is found in how they treat their weakest and most helpless citizens". The ACA was at least a foot in the door of providing at least a modicum of healthcare to its citizens. No, it is not surprising that the new health insurance customers are sicker than others,because many had been priced out of the market, and are now receiving care that they went without. What does it say about us as a nation that we can spend trillions on unwinnable wars, but begrudge spending on healthcare? Why cannot some form of single payer insurance even be discussed? Why do people in Canada have to pay far less than we per person for good healthcare? Our healthcare costs are spinning out of control. If costs are not controlled soon, no one will be able to afford healthcare but the wealthiest among us.
As for the insurance market stabilizing, what does that matter to a family whose insurance deductible and insurance premium per month, leave them with essentially catastrophic coverage? For many insurance coverage is not giving them healthcare coverage. We need to rethink our priorities.
As for the insurance market stabilizing, what does that matter to a family whose insurance deductible and insurance premium per month, leave them with essentially catastrophic coverage? For many insurance coverage is not giving them healthcare coverage. We need to rethink our priorities.
19
Saying that insurers "miscalculated who would buy their insurance" is a bit disingenuous.
The ACA plans were designed and priced on the assumption that existing plans that did not conform to the ACA's requirements would be discontinued at the end of 2013. The coverage offerings and associated pricing were not "guesses" -- they were actuarially developed based on the assumption that non-compliant plans would be gone and that there would be a number of (relatively) young and healthy people who would have to switch plans as a result.
Then at the end of 2013 -- after the coverage and prices for the new plans were approved by regulators -- the Obama administration realized that it was being held to the letter of "if you like your plan, you can keep it" and decided to allow the non-conforming plans to stay in place. As a result, many of the "better" risks whose presence was needed to make the pricing work never signed up, because they were able to keep their cheaper, non-compliant coverage.
With most of those plans no longer "grandfathered", 2016 will be a key year for the viability of these plans. They should see a change in the makeup of their insured population, with more young and health people covered that should bring down costs. I don't often defend health insurers, but they really shouldn't get all the blame for the mess -- last minute rule changes can have unanticipated consequences.
The ACA plans were designed and priced on the assumption that existing plans that did not conform to the ACA's requirements would be discontinued at the end of 2013. The coverage offerings and associated pricing were not "guesses" -- they were actuarially developed based on the assumption that non-compliant plans would be gone and that there would be a number of (relatively) young and healthy people who would have to switch plans as a result.
Then at the end of 2013 -- after the coverage and prices for the new plans were approved by regulators -- the Obama administration realized that it was being held to the letter of "if you like your plan, you can keep it" and decided to allow the non-conforming plans to stay in place. As a result, many of the "better" risks whose presence was needed to make the pricing work never signed up, because they were able to keep their cheaper, non-compliant coverage.
With most of those plans no longer "grandfathered", 2016 will be a key year for the viability of these plans. They should see a change in the makeup of their insured population, with more young and health people covered that should bring down costs. I don't often defend health insurers, but they really shouldn't get all the blame for the mess -- last minute rule changes can have unanticipated consequences.
6
Hi JM,
You're right on the money with your assessment. Add the medical loss ratio requirement to the non-compliant plans and you have a perfect storm of adverse selection. I also have an issue with provider reimbursement rates and lack of competition in certain metropolitan areas where it's become a "sellers market" for providers.
You're right on the money with your assessment. Add the medical loss ratio requirement to the non-compliant plans and you have a perfect storm of adverse selection. I also have an issue with provider reimbursement rates and lack of competition in certain metropolitan areas where it's become a "sellers market" for providers.
It also does not say how much of the illness was preventable had those people had access to healthcare all along. Nor does it measure how much of that illness is due to secondary illness in response to the stress of long term financial distress, insecure jobs with insufferable conditions and expectations because employment is so hard to come by. Since employers have no stake in healthcare now, they feel no pressure to "create efficiency" by saving in health insurance with secure work in safe conditions that pays the cost of living. Unteathered to the welfare of workers, employers are able to exact great costs that are more than mere pushing social insurance onto the plate of workers. They are adding to the net total damage workers need that insurance to help them with.
13
One of the defects of ObamaCare is that it provides for no-copay preventative care--an annual physical--but the deductible has to be met before actual treatment is covered. An annual physical does no good if you cannot afford treatment.
7
These people who have more medical problems and require more medical services are basically a risk pool, somewhat like they have for poor auto drivers. Charge them more, just like auto insurance. Change your lifestyle and get healthier. What a scam.
1
The uninsured person who trips, falls, and breaks bones just needs a healthier lifestyle. The uninsured woman who suffers from chronic "woman's problems" needs a healthier lifestyle. The uninsured person who suffers from an inherited condition just needs to have a healthier lifestyle. The list goes on and on.
28
GMHK, complete with flag icon, writes: "These people who have more medical problems ..."
Such good news! All my daughter has to do is change her lifestyle and her genetic disorder will go Poof! No more expensive trips to the endocrinologist, no more cardiac tests. No more psychiatric medications, physical therapy, occupational therapy.
She works part-time (the best she can do). If she must pay more for insurance, hey--maybe she could work more hours per day and more days per week... if that causes even more back strain, shoulder spasms, and neck pain (low-wage jobs can be pretty strenuous), well, heck. You can hate her for using even more PT and OT.
She's one of those "Those People," after all. She's not You and thus deserves every bad thing that happens and merits no help.
Such good news! All my daughter has to do is change her lifestyle and her genetic disorder will go Poof! No more expensive trips to the endocrinologist, no more cardiac tests. No more psychiatric medications, physical therapy, occupational therapy.
She works part-time (the best she can do). If she must pay more for insurance, hey--maybe she could work more hours per day and more days per week... if that causes even more back strain, shoulder spasms, and neck pain (low-wage jobs can be pretty strenuous), well, heck. You can hate her for using even more PT and OT.
She's one of those "Those People," after all. She's not You and thus deserves every bad thing that happens and merits no help.
31
GMHK, have you heard of cancer? Type 1 diabetes? Parkinson's? Alzheimer's? Multiple sclerosis? Think for 3 seconds before you post.
16
Of course the new enrollees are sicker they haven't had access to care....but with needed treatment, they will likely improve. The problem is, under private insurance (and in particular employer-based insurance) -- the insurer isn't likely to stick around long enough for the enrollee to get better.
And therein lies the problem with private insurance and social needs under our current system. Insurers can get all the patients -- but as soon as things get too "expensive" for the insurers they high-tail it out of town...leaving patients high and dry. It's a pattern we've seen with Medicare, Medicaid and now those of us who use the individual markets are suffering the same fate.
And therein lies the problem with private insurance and social needs under our current system. Insurers can get all the patients -- but as soon as things get too "expensive" for the insurers they high-tail it out of town...leaving patients high and dry. It's a pattern we've seen with Medicare, Medicaid and now those of us who use the individual markets are suffering the same fate.
10
Alternatively, 37Rubydog, the patient will get better and -- if they don't have a chronic condition requiring on-going care -- they will likely drop their coverage once their treatment is completed. With no true mandate, and with penalties that are typically less than the cost of coverage, there's no incentive for people to buy coverage they don't "need."
Other than a single-payer system -- administered either by the government or a not-for-profit company -- I'm not sure what the answer is.
Other than a single-payer system -- administered either by the government or a not-for-profit company -- I'm not sure what the answer is.
1
Agreed. Moral hazard is a problem....as are semantics -- if we move to a single payer or true non-profit system where the mandate has teeth....will people revolt against paying premiums if they are referred to as taxes
Have you ever noticed that the cost of treatment in a non-profit hospital is no lower than in a for-profit hospital and that their administrators are paid just as much as in for-profit hospitals?
Michelle Obama was paid $350,000 per year for a part time job at a non-profit hospital. The problem in medical costs has nothing to do with capitalism, it has to do with cronyism.
Michelle Obama was paid $350,000 per year for a part time job at a non-profit hospital. The problem in medical costs has nothing to do with capitalism, it has to do with cronyism.
2
When it’s based on ability to pay rather than risk, it’s not really insurance anymore. But it’s not exactly all-inclusive advance payment either, because you’ll still be charged for services.
6
What is sick is denying health care to all. Certainly the con artists in the Republican party and insurance companies have orchestrated the health care debacle, but we are to blame, too, for being willing patsies for so long. When are we going to become a civilized nation?
18
"He described the new report’s findings as unremarkable, and the coming price increases as a “market correction.”"
Market correction - when it affects someone else.
Price increase - when it affects you.
Market correction - when it affects someone else.
Price increase - when it affects you.
11
Exactly. Middle income and individually insured have become the first targets of the post-ACA insurers rate increases. Between premium and deductible, in 2010 I payed $5500 before my insurer payed a cent. In 2016, my least expensive option increased that number to $12,800. For the first time in 20 years I am uninsured, and for the privilege of being priced out of the market by ill conceived legislation, my government adds on a fine, excuse me, tax.
8
You can avoid the fine, excuse me tax, by arranging your withholding so that you owe $1 in taxes at year end.
(1) what you paid in 20120 was SIX years ago. Health insurance was going up 10-11% per year for at least 4 of those years and then about 7-8% since then. That $5500 in 2010 would now be $9564 now
(2) you are SIX years older! Guess what your premiums go simply because you get older - that would be a 20-30% bump alone from 2010.
Gee now we are at $11477 - 12,433
(3) doubt you are a 'idle income'
The "Middle" as in the exact middle with 50% having more and 50% having less - is around $50,000 for a household.
With even with only 2 people in a $50K household, you would qualify for subsidies as that 315% Federal Poverty Level
The "Middle" as in the exact middle with 50% making more and 50% making less - is around $27,000 for a worker.
For 1 person with a true middle income-wage of $27,000 that is around 230% Federal Poverty Levels -- and you would get pretty sizeable premium subsidies and your out-of-pocket (deductibles, copays etc) would be capped $5200+/-.
No way are you 'middle income' if your premium would be $12800 and you owe a penalty because it is LESS than 8% of your gross income. (No penalty if the premium would be more than 8% - only pay if it would be 8% or less)
If $12,400 is 8% or less of your income, you have an income of $155,000++++!!!!
Quitcherwhining. You are in the TOP 7% of all household in the US
More kevetching by the very very well-to-do who have the delusion their upper 10% income is the 'average/middle' income in the US.
(2) you are SIX years older! Guess what your premiums go simply because you get older - that would be a 20-30% bump alone from 2010.
Gee now we are at $11477 - 12,433
(3) doubt you are a 'idle income'
The "Middle" as in the exact middle with 50% having more and 50% having less - is around $50,000 for a household.
With even with only 2 people in a $50K household, you would qualify for subsidies as that 315% Federal Poverty Level
The "Middle" as in the exact middle with 50% making more and 50% making less - is around $27,000 for a worker.
For 1 person with a true middle income-wage of $27,000 that is around 230% Federal Poverty Levels -- and you would get pretty sizeable premium subsidies and your out-of-pocket (deductibles, copays etc) would be capped $5200+/-.
No way are you 'middle income' if your premium would be $12800 and you owe a penalty because it is LESS than 8% of your gross income. (No penalty if the premium would be more than 8% - only pay if it would be 8% or less)
If $12,400 is 8% or less of your income, you have an income of $155,000++++!!!!
Quitcherwhining. You are in the TOP 7% of all household in the US
More kevetching by the very very well-to-do who have the delusion their upper 10% income is the 'average/middle' income in the US.
3
I notice here in California large signs in doctor's offices stating they do not accept Covered California (California's name for ACA) insurance.
Why is that? Some animals are still not equal to other animals.
Why is that? Some animals are still not equal to other animals.
21
What we need to see now, if it's even possible to gather meaningful data, is whether there was a cost savings in terms of fewer (often uncompensated) expensive emergency room and advanced illness visits because those individuals who would have sought basic care in the er or let their medical conditions get out of hand instead sought earlier, proper treatment in a clinic. The idea was to reduce high er and severe illness management costs, and that hospitals would then decrease the uncompensated costs they have to roll into the baseline expenses they charge insurance companies and that get reflected in premiums. Has this offset happened? Is anyone looking?
12
It has been reported. ER use is up.
1
In key respects it does not reflect valid or accurate comparisons.
First, BCBS did not pay the higher costs for newly enrolled individuals that they reported. Look at the Notes to the report and you will see their disclaimer " The impact of the federal risk adjustment program for the individual market is not reflected in this report." What does that mean? It means they didn't subtract from their cost the significant portion of the $10 billion dollar payment by the federal government for 2014+2015 to offset the higher cost of sick people they had excluded from coverage prior to 2014.
Second, BCBS' "analysis" used allowed cost, which is the amount after discount. They compared costs in the individual market to those in the employer market. The employer market has bigger discounts/lower costs than the individual market just due to negotiating power. And, they did not say they excluded large employers from their comparison, so they probably did not. Large employers have bigger discounts than small employers.
Prior to 2014 the sick were not offered renewals so they move to the uninsured group. That will not happen going forward, so costs of the "old" and the "new" will become similar.
BCBS is really just reporting "once the Affordable Care Act required insurers to offer insurance to sick people, a lot more sick people signed up."