Older Americans may have to postpone retirement under New health bill

[MichaelB]

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Originally Posted by samclem I'm mystified, too.

Then I'm in excellent company.

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Originally Posted by samclem But, I can see a window for cross-border efficiencies in provision of some medical care (not insurance). Non-rush but expensive surgeries done in a few central locations could reduce costs. Maybe even overseas. If there's a "driver" to induce such efficiencies it could happen, and it might promote competition that doesn't exist now in sparsely populated areas/expensive markets.

That's a very good idea. Both "health care from a distance" and "domestic health care tourism" have a great deal of promise, especially for severely underserved locations, but need an enabler. Health insurance companies are motivated and have much of the knowledge needed.

[audreyh1]

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Originally Posted by MichaelB I think insurers are not free to set any price, they are subject to review, approval and compliance with state regulations.

Well there was the 80% rule. Is that going away too?

[DrBrisket]

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Originally Posted by MichaelB "Free market" economics do not apply to health care. We know this, Kenneth Arrow was awarded the Nobel Prize for economics when he demonstrated it.

Dr. Arrow was not awarded a Nobel Prize for demonstrating that "free market" economics do not apply to healthcare. In academic circles, his paper “Uncertainty and the Welfare Economics of Medical Care” is important, but his Nobel Prize was awarded for “pioneering contributions to general equilibrium theory and welfare theory.” His body of academic work is quite impressive and his contributions are well beyond just one paper.

Dr. Arrow's healthcare "proof" published in 1963 is based on 5 "special characteristics of the medical-care market". The most peculiar IMHO is "pricing practices". He notes "the pricing practices of the medical industry depart sharply from the competitive norm" and "physicians [are] equivalent to a collective monopoly" through their pricing practices. Stated differently, the lack of upfront pricing and the opposition to pricing transparency have "taken distinctly coercive forms, certainly transcending market pressures, to say the least."

Further, due to what economists call "moral hazard", Dr. Arrow states, "Insurance removes the incentive .... to shop around for better prices. The market forces, therefore, tend to be replaced with direct institutional control."

The "cure" for the "5 special characteristics" according to Dr. Arrow is Single-Payer as he stated in an interview less than a year before his passing last month (linky). In this interview, he also states that the US never had a laissez-faire healthcare market.

Want to read Dr. Arrow's paper? linky

[cyber888]

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Originally Posted by scrabbler1 From my years working in the actuarial field, whenever a rule change such as changing the age ratio was introduced, it was done on a revenue-neutral basis. That is, changing the age ratio from 3:1 to 5:1 could not, in the aggregate, generate more or less revenue than before the rule change. We often filed revenue-neutral rule changes with state insurance departments and they were always approved unless the state insurance department disagreed with the underlying rule change itself. In order to accomplish that, there would be rate offsets to ensure that the rule change was revenue-neutral based on a given book of business. The amount of the rate offset would depend on how many people were in each of the rating categories and how much revenue each subgroup generated. Using your $180 and $540 rates for younger and older people, let me first demonstrate 2 extreme examples. Suppose you have 10 people, all age 20-30. To ensure revenue-neutrality, the rate for the 50-60 class would increase to $900, as you wrote. But this assumes that nobody will be in that age class so the total revenue before and after would remain at $1,800 ($180 x 10). The other extreme would assume that all 10 people are age 50-60. There, the rate for the 20-30 would drop to $108, to assure revenue-neutrality ($540 x 10, or $5,400). But neither scenario reflects the actual population, so what will happen is the rate for the age 20-30 will drop a little while the rate for the age 50-60 will increase a little, creating a 5:1 age ratio while generating the same overall revenue. Suppose there are 5 people in each age group. Without going through all the algebra, to be revenue-neutral, the rate for the younger group would drop 33% to $120 while the rate for the older group would rise 11% to $600. The total revenue generated would be $3,600 before and after the age ratio change.

Nope. That's not how insurance companies work. They will charge the most allowed by law. If you think premiums would drop, you are naive. Premiums will always go up every year.

[scrabbler1]

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Originally Posted by cyber888 Nope. That's not how insurance companies work. They will charge the most allowed by law. If you think premiums would drop, you are naive. Premiums will always go up every year.

I worked in the insurance industry for 23 years. I worked on rule change filings which included offsets the way I described them in my other post all the time. Those rule change filings were approved by state insurance departments nearly every time.

Many of the rate change filings included decreases. Rates did not always go up. Within an auto insurance filing (the ones I worked on), there were rate changes for many coverages. Most of the time, some coverages saw increases, some saw decreases.

The auto insurance industry is very competitive. This puts downward pressure on rates. Many state insurance departments rejected rate increases if they were too high or if they objected to some of our actuarial estimates contained in the methodology we used. This also kept downward pressure on rate increases.

Plainly put, you don't know what you are talking about. Sorry.

[cyber888]

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Originally Posted by samclem I guess we are just trying to awfullize this, taking the most negative view possible. Here's a take that is exactly as accurate: "Under this Republican planproposal, if you are 30 years old, you pay only, at most, 20% of what a 50-64 year old pays. Under Obamacare, it was 33% : That's a decrease in premiums of over 39% compared to the present system! And under the present system the, IRS automatically "slaps on" a fine tax of thousands of dollars if families have a lapse in coverage. Under the newly proposed system, there's no government penalty, but insurers can choose to add 30% to their premiums if you go without insurance for 60 days."

Nope, it is not awefullized. You try to tone down the 30% penalty. Insurance companies won't 'choose' as you say - they will do it 100%. They will charge the 30% penalty as allowed by law. So, if a family is paying $1000/mo, they will be paying $1,300/month.

[samclem]

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Originally Posted by cyber888 Nope, it is not awefullized. You try to tone down the 30% penalty. Insurance companies won't 'choose' as you say - they will do it 100%. They will charge the 30% penalty as allowed by law. So, if a family is paying $1000/mo, they will be paying $1,300/month.

You're probably right, they will likely choose to charge the extra 30%. People can save that 30% by keeping their insurance current and not trying to hop into the market when they get sick.

Oh, the present $2,085 fine for being uncovered? That's imposed by the IRS, it's definitely mandatory, and $2085 is the >least< it can be. It's that or 2.5% of the family's income whichever is >greater. So, it is the present government penalty I was "toning down."

[exnavynuke]

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Originally Posted by samclem You're probably right, they will likely choose to charge the extra 30%. People can save that 30% by keeping their insurance current and not trying to hop into the market when they get sick. Oh, the present $2,085 fine for being uncovered? That's imposed by the IRS, it's definitely mandatory, and $2085 is the >least< it can be. It's that or 2.5% of the family's income whichever is >greater. So, it is the present government penalty I was "toning down."

To be fair, the "least" the tax penalty can be is $0 if you meet any of the 10 exemptions to it, only one of which involves having health care all year long.

You're right though, people can save a 12 month 30% premium increase by always having insurance every year of their life. Alternatively, a 20 year old can forego insurance for 20 years and save all the money that insurance would cost him and pay a tiny fraction of those savings as a penalty for 1 year to grab insurance when they become diabetic at 40. I wonder what those young, healthy people would opt for most of the time, spending thousands "just in case" for years or decades without needing it, or spend a little bit more for a short while once they do need it.... I know in their shoes I'd choose to wait until I needed insurance to buy it under such a system.

[RetiredGypsy]

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Originally Posted by scrabbler1 The auto insurance industry is very competitive. This puts downward pressure on rates. Many state insurance departments rejected rate increases if they were too high or if they objected to some of our actuarial estimates contained in the methodology we used. This also kept downward pressure on rate increases.

Since people are people and not cars, it's unfortunate that it's impossible to take the emotional attachment out of the discussion. Because we're compassionate, we want everyone to be taken care of. Yet it seems like healthcare insurance would be a lot cheaper if it were treated like auto insurance. Especially the bit where it's aimed at the consumer, instead of lump summed into employer packages.

Isn't insurance a collection pool to mitigate uncertain risk? I've never understood why I'd want to buy insurance to pay for a medical visit I know I have to make every year, including bloodwork and whatever labs, the twice yearly dental checkups and cleanings, the basics before any medical issues are found. The same way I'd never insure for needing to get my tires rotated and replaced, oils and fluids changed, refilling the tank, whatever; maintenance that's so typical to insure against it seems to only make financial sense for a business that can charge at some profit to collect what should instead go into a savings account.

I guess ideally, any children would be attached to their parent's medical insurance from birth, to eliminate most of the pre-existing condition issues, the same way most kids get put on their parent's auto insurance when they start to drive.

[Fedup]

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Originally Posted by exnavynuke To be fair, the "least" the tax penalty can be is $0 if you meet any of the 10 exemptions to it, only one of which involves having health care all year long. You're right though, people can save a 12 month 30% premium increase by always having insurance every year of their life. Alternatively, a 20 year old can forego insurance for 20 years and save all the money that insurance would cost him and pay a tiny fraction of those savings as a penalty for 1 year to grab insurance when they become diabetic at 40. I wonder what those young, healthy people would opt for most of the time, spending thousands "just in case" for years or decades without needing it, or spend a little bit more for a short while once they do need it.... I know in their shoes I'd choose to wait until I needed insurance to buy it under such a system.

Your post exaggerates a bit. Young people is covered up to age 26. Not a 20 year old. But I think the penalty is not high enough. It should be like Medicare, 30% per year and it should continue every year as long as you miss it.
This is one reason my husband enrolled in Medicare part B. The unknown is too great, he might as well enroll. He doesn't need it now but maybe he will need it later.

[RetiredGypsy]

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Originally Posted by Fedup He doesn't need it now but maybe he will need it later.

Seems to sum up the risk/benefit analysis of getting insurance pretty well.

[Fedup]

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Originally Posted by RetiredGypsy Seems to sum up the risk/benefit analysis of getting insurance pretty well.

He has private insurance. The debate was whether he needs Medicare part B. But now he has it, I think it simplifies the paper effort. Maybe not now, but when he is in the elder stage , I know he is still a young person, then less hassle about copay and stuff. His doctors office often messes up on copay. I think we suppose to pay $25 or $30, but they always said it's $35. It's that kind of hassle I want to avoid.

[Fedup]

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Originally Posted by samclem I guess we are just trying to awfullize this, taking the most negative view possible. Here's a take that is exactly as accurate: "Under this Republican planproposal, if you are 30 years old, you pay only, at most, 20% of what a 50-64 year old pays. Under Obamacare, it was 33% : That's a decrease in premiums of over 39% compared to the present system! And under the present system the, IRS automatically "slaps on" a fine tax of thousands of dollars if families have a lapse in coverage. Under the newly proposed system, there's no government penalty, but insurers can choose to add 30% to their premiums if you go without insurance for 60 days."

Right now, Its very unfair for young people. Use myself and my kids as an example. I enter identical information regarding zipcode, income, etc, the only difference is age. My kid is 26 and I'm 57. It turns out under coveredca, my kid pays $268 per month with zero subsidy, while I would pay $509 and that's included $100 subsidy. Older people in this neighborhood is in the super rich category. Even I can't afford a decent house there. So why should these young kids subside the older people who have enough time to accumulate savings and such.

[Surewhitey]

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Originally Posted by Al in Ohio I have spent time in Canada. That's way overblown. The vast majority of Canadian's love their healthcare system and in fact have greater satisfaction with their care. Also the Canadian med system is proven to have less mis- diagnoses and lab errors. Emergency care and routine care wait times are only slightly longer (days) while appointments for specialists for elective procedures can take 4 weeks or longer. Very few Canadians travel south in actuality for care in the US. They truly laugh at our health care system in comparison to theirs. They like the Netherlands have 3 out of 3 of the above criteria pretty close. I am pretty sure there are more, but those more well traveled will weigh in is my guess.

For the most part you are correct. I do know 10+ Canucks from various provinces and some have had wait times for knee surgery, but they eventually do get it. The thing is, they pay for it in so many ways. Income tax, liquor tax...so many taxes. If you put a dollar figure on the taxes, they're paying much more than we would if we really are honest about it, IMO. BTW, many of them go to Mexico for dental as this is not covered under their plan...same for prescriptions.

My company is self-insured and they work hard to communicate expenses and increases and how to minimize them. Last year our increase was only 6%, compared to DW's 24%...seems to work so far, anyhoo.

My $.02

[Al in Ohio]

Thanks for the input. I have heard more in the US are getting dental work done in Mexico also. I suppose the training and results are comparible, but that's a long trip to the dentist!

[growing_older]

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It seems entirely plausible that the new rules would discourage older workers from retiring

I'm certainly in this group. Even the uncertainty about the new rules is keeping me employed. I'm essentially uninsurable, so the best I will be able to do is COBRA and that would run out well before age 65 and Medicare, so I cannot risk being stuck at an age where I cannot get any medical insurance.

I see the medical bills from the last few years paid by my insurance and notice that the amounts paid on my behalf by insurance company are expensive, but might possibly be in a range that I could simply pay them (like self-insurance). However the non-insurance paid bills, the occasional out of network provider or uncovered procedure, seems to cost nearly 10x what insurance pays. I cannot possibly afford to pay these non-negotiated fees on my own, so I must have insurance.

So my concerns are not about subsidies or playing games to manage my income and qualify for reduced rate. I'm concerned just about the crazy pricing of health care, and my absolute dependency on insurance to keep that in check. If insurance is not available to me, medical care is priced to be unaffordable. If I am insured, the amounts the medical provider accepts from insurance would be affordable to me. But without ACA rules on pre-existing conditions, I will not be able to buy insurance at all.

[Surewhitey]

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Originally Posted by Al in Ohio Thanks for the input. I have heard more in the US are getting dental work done in Mexico also. I suppose the training and results are comparible, but that's a long trip to the dentist!

It's called vacation dentistry. We go so often, we'll get our cleanings done and buy meds and that will pretty much pay for our trip down and sit on the beach while we recoup. Have met many who do this from Canada for as much as dentures, root canals, etc.

[Fedup]

Pre-existing conditions rules will not be going away with the new proposed health plan.

[ivinsfan]

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Originally Posted by LastOfTheBoomers I'm trying to run the numbers for DW and I Current ACA plan is 1103 a month or 13236 a year. We are over the cutoff by about $19k - pesky LTCG at end of year gets us. If I divide the current premium by 3 and then multiply by 5 it becomes 1838 a month. Multiply that by 12 and then subtract the new tax credit - the result is 14560 So the yearly cost goes up 1326 I guess this is the worst case scenario. Has anyone else ran their numbers? Frankly if they kept the current ACA plan and did the HSA enhancements that would work out pretty well.

Worse case, not even close..private individual plans are increasing by double digits numbers every year so that number you are using is meaningless..

[ivinsfan]

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Originally Posted by MichaelB I think insurers are not free to set any price, they are subject to review, approval and compliance with state regulations.

If only this was true, in fact as the competition and number of companies offering polices in each state gets smaller, the insurance carriers find out they carry a pretty big stick. In MN several threatened to pull out and in fact the state offered them a BIGGER increase then requested to keep them in the offering pool.