Aetna pulling out of ACA

[ShokWaveRider]

Simply put, Health insurance should be NON profit as it is in most other civilized countries. Making money on the back of other people's health issues is not humane.

[Whisper66]

Quote:

Originally Posted by ShokWaveRider Simply put, Health insurance should be NON profit as it is in most other civilized countries. Making money on the back of other people's health issues is not humane.

And groceries should be non profit as making money on the hunger of others is not humane.


Sent from my iPhone using Early Retirement Forum

[ziggy29]

Quote:

Originally Posted by athena53 It's interesting, though, that the cost-shifting to the consumer (mostly in the form of very high deductibles) is having the anticipated effect.

Precisely. I think people are becoming more and more aware that stuff isn't "free" because it is covered by insurance or the government. The attitude that says "don't worry, consumer, insurance will pay it" doesn't fly so well any more. People are seeing what is happening with runaway health care costs. Insurance rates are going way up. Insurers are pulling out of ACA Marketplace plans. Deductibles, copays and out of pocket maximums are rising several times faster than inflation. Formularies are being cut back.

All these things are happening in large part because of the sort of things this company is doing (there are, of course, several other significant factors that are not the fault of providers or drugmakers). A few decades ago we didn't really notice if insurance was paying when employers were still eating all the rising costs and our copays, if any, were like $5 or $10 per visit. But now, it's blatantly obvious what actions like these are doing to continue to make the US health care market the most unaffordable and dysfunctional in the industrialized world. Ask yourself this: Why aren't these prices being jacked up like this in Canada, or the UK, or Germany, or Japan (among many, many others)? IMO it's because our model uniquely allows the US consumer and insurance company to subsidize the rest of the world, since they can providers and drugmakers can pretty much charge whatever the hell they want here.

[ShokWaveRider]

Quote:

Originally Posted by Whisper66 And groceries should be non profit as making money on the hunger of others is not humane. Sent from my iPhone using Early Retirement Forum

You can control what you eat, you cannot typically control when and if you get sick.

You statement simply does not hold water, and it lacks sensitivity. Try asking a family that has a child with a debilitating ailment, such as Cerebral Palsy, or other birth defects.

[ziggy29]

Quote:

Originally Posted by Whisper66 And groceries should be non profit as making money on the hunger of others is not humane.

If farmers, ranchers and supermarkets were doing what drugmakers and some providers are doing, I might agree with you.

[easysurfer]

Signs of Obamacare open enrollment isn't far away as I'm already hearing on the radio commercials from BCBS with "testimonials" that having BCBS during an emergency was a life saver as cost was covered 100%. I suppose perhaps in certain circumstances, but the ad to me seems more like from 30 years ago than today' climate.

I'm scratching my head though as since selling policies on the exchange for the insurances companies are so unprofitable why does BCBS stick around there? From the goodness of their heart?

I like to complain about the high premiums as much as the next person, but come sign up this year BCBS may be my only choice .

[samclem]

Quote:

Originally Posted by Whisper66 And groceries should be non profit as making money on the hunger of others is not humane.

If we had "food insurance" where I could pay about 20% of the cost and my employer or the government would chip in the rest, you can bet our food would be very expensive. And I'd be eating a lot of lobster. Then, we'd have a crisis and somebody would propose price caps and limiting the options. So, we'd get expensive bread and water, and we'd probably have shortages of those.

Obviously, health care is a more complicated issue. But there are ways to devise a fairly rational market for health care (and insurance) that allows those with pre-existing conditions to be subsidized by others and still keeps the link between customer and price, and encourages efficient use of the money spent. There are even ways to do it that respect the traditional bounds of the constitution. But, it's pretty obvious that the present construct isn't getting the job done, and the trend is apparently not on a favorable slope. Rationally, we'd do something about it. We'll see if that happens.

[explanade]

Quote:

Originally Posted by ziggy29 Precisely. I think people are becoming more and more aware that stuff isn't "free" because it is covered by insurance or the government. The attitude that says "don't worry, consumer, insurance will pay it" doesn't fly so well any more. People are seeing what is happening with runaway health care costs. Insurance rates are going way up. Insurers are pulling out of ACA Marketplace plans. Deductibles, copays and out of pocket maximums are rising several times faster than inflation. Formularies are being cut back. All these things are happening in large part because of the sort of things this company is doing (there are, of course, several other significant factors that are not the fault of providers or drugmakers). A few decades ago we didn't really notice if insurance was paying when employers were still eating all the rising costs and our copays, if any, were like $5 or $10 per visit. But now, it's blatantly obvious what actions like these are doing to continue to make the US health care market the most unaffordable and dysfunctional in the industrialized world. Ask yourself this: Why aren't these prices being jacked up like this in Canada, or the UK, or Germany, or Japan (among many, many others)? IMO it's because our model uniquely allows the US consumer and insurance company to subsidize the rest of the world, since they can providers and drugmakers can pretty much charge whatever the hell they want here.

But I don't know if stories like Martin Skurili or Epipen are going to lead to any kind of reforms.

Those cases are singled out as if they're outliers when they're more typical than we'd like to believe.

So no politician is pledging to do anything about high drug prices or health care costs. They might have some hearings which are eventually forgotten but that's about it.

Health care is about 17% of GDP. Maybe if it hits 25% or greater, more people will feel the pinch.

[aja8888]

Quote:

Originally Posted by athena53 Few people notice the cost of an expensive med when the co-pay is $10.

Most people paying a $10 co-pay for a med are not told what the actual retail "price" (cost?) of the med is. I also doubt if that retail price is the same from pharmacy to pharmacy.

[timo2]

Quote:

Originally Posted by pb4uski Timo.... you obviously do NOT get it. Heather Bresch is CEO of a pharmaceutical company, NOT a health insurance company.

Yes, I was conflating big pharma and health insurance. Sorry for that.

The next logical step in the price war is health insurance companies now need stop covering epi pens.

[MichaelB]

Health care costs and insurance are indeed more complicated. Nobel Prize winning economist Kenneth Arrow shows us why a "free market" approach does not work in health care in his paper "Uncertainty and the Welfare Economics of Medical Care" .

The issue we have is not only how to prevent costs from rising, it is also how to deal with costs that are now unaffordable for so many. And how to reconcile a system where insurers demand that the population be subject to a "must insure" regulation but won't accept to the same extent a "must insure" requirement.

Health insurance makes this problem much more complex. Providers (physicians and hospitals) and patients have enough in common to find ways to satisfy most objective of cost and quality. Insurers, however, disrupt that and have an extraordinary objective that is not shared by either patient or provider and effectively prevents the two from reaching a common ground. This is a tough nut to crack.

[Gotadimple]

Quote:

Originally Posted by aja8888 Most people paying a $10 co-pay for a med are not told what the actual retail "price" (cost?) of the med is. I also doubt if that retail price is the same from pharmacy to pharmacy.

Most people don't look at the paperwork they get from the pharmacy. A good PBM (pharmacy benefits manager) will show the cost of the drug and tell you how much you saved by using your insurance. Or if you want a comparison, run your rx through Goodrx.com to see the prices at local pharmacies - before insurance.

[Texas Proud]

Quote:

Originally Posted by ShokWaveRider Simply put, Health insurance should be NON profit as it is in most other civilized countries. Making money on the back of other people's health issues is not humane.

Just to be clear, they are not 'NON' profits... they are tax exempt entities...

My sister worked for one for many years and they made many millions of dollars each and every year.... and also spent lavishly on the board members and top execs to the point of a scandal maybe 20 or so years ago...

They were not cheap... they were not that charitable either even though they were supposed to be...

[Texas Proud]

Quote:

Originally Posted by ziggy29 Precisely. I think people are becoming more and more aware that stuff isn't "free" because it is covered by insurance or the government. The attitude that says "don't worry, consumer, insurance will pay it" doesn't fly so well any more. People are seeing what is happening with runaway health care costs. Insurance rates are going way up. Insurers are pulling out of ACA Marketplace plans. Deductibles, copays and out of pocket maximums are rising several times faster than inflation. Formularies are being cut back. All these things are happening in large part because of the sort of things this company is doing (there are, of course, several other significant factors that are not the fault of providers or drugmakers). A few decades ago we didn't really notice if insurance was paying when employers were still eating all the rising costs and our copays, if any, were like $5 or $10 per visit. But now, it's blatantly obvious what actions like these are doing to continue to make the US health care market the most unaffordable and dysfunctional in the industrialized world. Ask yourself this: Why aren't these prices being jacked up like this in Canada, or the UK, or Germany, or Japan (among many, many others)? IMO it's because our model uniquely allows the US consumer and insurance company to subsidize the rest of the world, since they can providers and drugmakers can pretty much charge whatever the hell they want here.

One of the problems that I have it that there has been no 'savings' to the consumer...

If the cost is being put to the consumer and the insurance is not paying for these items anymore, then the premiums should be lower.... but they are not.. in fact, they are going up at near record amounts...

[athena53]

Quote:

Originally Posted by aja8888 Most people paying a $10 co-pay for a med are not told what the actual retail "price" (cost?) of the med is. I also doubt if that retail price is the same from pharmacy to pharmacy.

Both grocery chains we've used over the last 13 years (not national but large local presence) did show the "usual and customary" price, which is pretty much what the uninsured pay and not necessarily what an insurer might negotiate. Still, I doubt most people looked at that unless they were on the hook for it.

[explanade]

Speaking of Aetna, here is there explanation of health care costs:

The Facts About Rising Health Care Costs

The pie chart is pretty consistent with those from other sources, showing hospitals, doctors and pharma as having the three biggest slices. They talk about profit margins in different parts of the health care sector:

Quote:

Insurance industry profits are not a significant driver of health insurance premiums. A Yahoo Finance analysis places the health insurance sector’s average profit margin in 2012 at just 4.5 percent. By comparison, major drug manufacturers have an average profit margin of 16.7 percent; medical instrument and supply companies, 13.6 percent; biotechnology, 11.9 percent; and medical appliance and equipment companies, 13.7 percent.22 Administrative costs represent less than 2 percent of health care spending growth. Private insurance administrative costs are actually comparable to Medicare’s administrative costs when comparing similar services. In 2009, private payers expended $12.51 per member per month versus $13.19 for Medicare.23 Importantly, private insurer administrative costs include fraud detection, disease management, wellness programs, and investments in information technology.

I don't know about their administrative costs being as low as Medicare but it's certainly lower than other players like pharma and hospitals.

[Texas Proud]

One thing that I will say.... hospitals must be making a killing as there are MANY that have been built in the past few years or are being built close to where I live... and I do not think we have a shortage of hospitals...


So far, nothing has been done to change the cost structure.... it is only set up so I pay almost everything out of pocket unless some huge cost comes and my health insurance premiums have skyrocketed... so, more cost for premiums and more cost for health care... what a deal....

[samclem]

Quote:

Originally Posted by MichaelB Nobel Prize winning economist Kenneth Arrow shows us why a "free market" approach does not work in health care in his paper "Uncertainty and the Welfare Economics of Medical Care" .

I think it might be fairer to say that this 1963 paper points out the challenges of applying free market principles to health care, as Arrow never says free market principles can't be made to work in supplying this service. But he certainly points out the need to account for the unique characteristics of this particular service/good.

A comment from the paper that bears on our ongoing "situation:"

Quote:

"I propose here the view that, when the market fails to achieve an optimal state, society will, to some extent at least, recognize the gap, and nonmarket social institutions will arise attempting to bridge it. . . . It has always been a favorite activity of economists to point out that actions which on their face achieve a desirable goal may have less obvious consequences, particularly over time, which more than offset the original gains."

As our experience with the ACA continues, it is clear that in significant areas Arrow's "gap" is growing, and the "less obvious consequences" grow more obvious to everyone willing to look.

Anyway, the US has had virtually no experience with a free-market health care system , or a free-market insurance system. Some nations use something that comes a lot closer than we are doing, and they include government involvement to address some of the challenges that Arrow identifies. The Swiss model could serve as a useful basis for us going forward. Universal coverage, consumer-driven choice of insurers, good results, and they spend only about 12% of their GDP on health care (we spend about 17%). If put in terms of "equivalent dollars" per person, they spend 25% less--for better coverage that is truly universal. But, as enticing as it might be to go that route and as potentially beneficially to us all, we aren't starting with a clean sheet, we're starting with this thing we created.

[ziggy29]

Quote:

Originally Posted by Texas Proud One thing that I will say.... hospitals must be making a killing as there are MANY that have been built in the past few years or are being built close to where I live... and I do not think we have a shortage of hospitals...

Not so sure. Hospitals have to eat (write off) a LOT of ER debts that patients can't pay (poor and uninsured). By law they are required to treat patients regardless of ability to pay, but you can't draw blood from a rock and if they can't pay.... the costs are just shifted to the rest of us.

[ShokWaveRider]

Quote:

Originally Posted by ziggy29 Not so sure. Hospitals have to eat (write off) a LOT of ER debts that patients can't pay (poor and uninsured). By law they are required to treat patients regardless of ability to pay, but you can't draw blood from a rock and if they can't pay.... the costs are just shifted to the rest of us.

Another reason why a National System will work to reduce costs.