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Old 06-07-2013, 05:52 AM   #41
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In this PPACA setup, the biggest subsidies flow from healthy people (who are charged relatively more than the value of what they are expected to receive) to sick people and from higher income people (who receive no subsidies) to those who have lower incomes. It might be that the healthy and those with high incomes, as the "billpayers", will feel they should get an extra vote in telling people how to live, but I doubt very much they'll get this.

And, drivers of cars subsidize the increased healthcare costs of motorcycle riders.
Any data to back up your claims of the healthy, wealthy car drivers providing the biggest subsidies vs the gov't? (not challenging, just asking)

I think it remains to be seen how much the gov't will be forking over. I wonder what percentage of the population (of many income ranges) will be receiving some subsidy...THIS FI person plans to!
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Old 06-07-2013, 06:57 AM   #42
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Money flowing from those paying premiums to those receiving insurance benefits is not a subsidy, it is the purpose of insurance. The only individuals paying more are smokers, all others are paying the full cost. Some get premium assistance, but this is paid by taxpayers and not other premiums.

The biggest subsidy, much greater than the total value of premium assistance, is the tax break given to everyone receiving insurance through employment. It is the single largest tax break and far greater than all the premium subsidies that will be paid once the healthcare reform is fully implemented.
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Old 06-07-2013, 08:03 AM   #43
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The biggest subsidy, much greater than the total value of premium assistance, is the tax break given to everyone receiving insurance through employment. It is the single largest tax break and far greater than all the premium subsidies that will be paid once the healthcare reform is fully implemented.
And a great incentive it is for one to seek employment.
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Old 06-07-2013, 08:37 AM   #44
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Money flowing from those paying premiums to those receiving insurance benefits is not a subsidy, it is the purpose of insurance. The only individuals paying more are smokers, all others are paying the full cost.
Some people will pay >more< than full cost. A healthy person in a group plan today is often paying lower rates (total premiums--employer and employee) for the same coverage than he/she will pay under PPACA. The higher rates these people will pay under the new law go to subsidize the artificially low rates to be paid by sick people. That's how community rating works, right? And why we went through all this drama to make everyone enroll, so they could carry the load for others. I'm not saying it is bad or good, but that's how this system is set up.

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Some get premium assistance, but this is paid by taxpayers and not other premiums.
It is a subsidy, which is what we are talking about.


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The biggest subsidy, much greater than the total value of premium assistance, is the tax break given to everyone receiving insurance through employment. It is the single largest tax break and far greater than all the premium subsidies that will be paid once the healthcare reform is fully implemented.
Since you brought it up: Whether it is a subsidy or not (this goes to the point of "tax expenditures", etc), it definitely warps the pricing structure of insurance, hides its true cost, and causes inefficiencies in the labor market. The failure to address this is another problem with the present legislation. But I'm not sure why this is something we think should be discussed in a thread about PPACA's implementation, this legislation is what it is, and highlighting its deficiencies risks the pig.

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Any data to back up your claims of the healthy, wealthy car drivers providing the biggest subsidies vs the gov't? (not challenging, just asking)
I'm just looking at who pays and their bang-for-the-buck. If a sick, low-income earner engaged in high risk behaviors is paying $0 for health insurance and a high income healthy person who has lower risk factors is paying $10K plus per year, we can look at their respective costs and benefits and make a rough judgement of whose risk is being pushed where.
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Old 06-07-2013, 08:55 AM   #45
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I'm just looking at who pays and their bang-for-the-buck. If a sick, low-income earner engaged in high risk behaviors is paying $0 for health insurance and a high income healthy person who has lower risk factors is paying $10K plus per year, we can look at their respective costs and benefits and make a rough judgement of whose risk is being pushed where.
+1
A healthy low income person is still getting the subsidy an unhealthy one gets while an unhealthy high income earner, say who smokes, is paying more.
It remains to be seen what an unhealthy one who smokes will pay.

To not acknowledge this is the basic premise on affordability "for all" is to not understand why it was set up the way it was. Risk is being pushed towards those that can pay whether that is thru taxation or premiums in order to afford giving subsidies to those that don't or simply can not pay.

Not saying I agree or disagree. It's the way it is. Some call it a transfer of wealth. Some call it the right thing to do.

Fundamentally I think everyone should have access to good and appropriate health care. For me the basic problem is the industry was way out of hand before this started. A two night stay in the hospital costing over $20,000 for pneumonia or some other non surgical reason was and is ridiculous. Not to mention anything requiring surgery.
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Old 06-07-2013, 09:15 AM   #46
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Charging higher rates for smokers, obese people and others with specific poor lifestyle or living habits has been practiced in the workplace for over a decade and now is not uncommon. Employers are encouraging employees to enroll in wellness programs and monitoring weight, and giving premium discounts for these things. Any group plan that gives a discount for smoking cessation, weit loss or wellness enrollment had the higher rate built into the premium.
Encouraging someone to participate in a wellness program for a token benefit is a far cry from determining at policy commencement that this person is a high risk (and charging a higher premium) because of smoking, alcohol use, obesity, sedentary lifestyle, etc. This has NOT been done before.

Although I agree that people should bear their own risks for using drugs, smoking, not exercising or being obese, it is a slippery slope we should not allow the government to control. Next step will be DNA screening for same reasons. Then high sugar drinks will be banned (like our friend Bloomberg tried and failed to do in NY).
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Old 06-07-2013, 09:17 AM   #47
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Some people will pay >more< than full cost. A healthy person in a group plan today is often paying lower rates (total premiums--employer and employee) for the same coverage than he/she will pay under PPACA. The higher rates these people will pay under the new law go to subsidize the artificially low rates to be paid by sick people. That's how community rating works, right? And why we went through all this drama to make everyone enroll, so they could carry the load for others. I'm not saying it is bad or good, but that's how this system is set up.
The rate the insurance company charges is subject to MLR at the group level, so there is no subsidy anywhere. different rates between plans have many explanations but cross subsidy is not one, given the MLR restrictions.

Within any insured group the lucky ones, those that don't collect, subsidize the unlucky ones, those that do. That isn't really a subsidy, though, it's more of a reason to buy insurance.

Individuals that are unable to pay the full premium receive assistance from the taxpayer via the Federal Gov't, not other group members.
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Old 06-07-2013, 09:19 AM   #48
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Just an observation on the smoking/BMI issue as a reason to charge more. My mother and father were both smokers; she died at 70 from lung cancer and he at 77 from emphysema. Their end of life choices (hospice, no heroics and premium profits for the healthcare industry courtesy of Medicare) appeared reasonably low cost. Now, fast forward to today with MIL who lives with us and was not a smoker. At 87 has enjoyed hospital stay after hospital stay, 7-8 drug prescriptions, and continued SS payments. So cost to society (well, and us for providing food, board, transport, etc) for her much greater. As for the BMI issue, I'd think the cost for treating the multitude of health problems associated with obesity would be more significant and longer term than a doomed smoker.

All the above merely my observation and opinion; no data to back it up. Just seems like a smoker will generally incur an earlier, lower cost demise with termination of medicare and SS costs sooner than a high BMI individual who can use the healthcare system to sustain themselves a good while with many chronic conditions. For whatever that observation is worth!
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Old 06-07-2013, 09:35 AM   #49
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For me the basic problem is the industry was way out of hand before this started. A two night stay in the hospital costing over $20,000 for pneumonia or some other non surgical reason was and is ridiculous. Not to mention anything requiring surgery.
Have you noticed that this issue has not been addressed in the new and wondrous legislation?

Ha
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Old 06-07-2013, 09:56 AM   #50
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All the above merely my observation and opinion; no data to back it up. Just seems like a smoker will generally incur an earlier, lower cost demise with termination of medicare and SS costs sooner than a high BMI individual who can use the healthcare system to sustain themselves a good while with many chronic conditions. For whatever that observation is worth!
I believe that was the argument the big tobacco company's used with the Chinese government officials.
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Old 06-07-2013, 10:01 AM   #51
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Within any insured group the lucky ones, those that don't collect, subsidize the unlucky ones, those that do. That isn't really a subsidy, though, it's more of a reason to buy insurance.

Individuals that are unable to pay the full premium receive assistance from the taxpayer via the Federal Gov't, not other group members.
If "unable to pay" is restated to ''"payment is made by those who are unable to look poor enough by manipulating reported income, or those who while able bodied choose not to work, and by those who are not working or are marginally producing income, then I see you point. How successful would the campaign to get this bill have been if it had been presented as "a really big help to early retirees"?

Although narrowly defined the resource flow from healthy plan participants to unhealthy ones may not ordinarily be called a subsidy, economically it is. With adequate underwriting (making underwriting illegal is one goal of this legislation) this flow would not exist, and all that would be left would be luck, which is as you say the purpose of insurance. Distributing random costs. It may be a social goal to do no ordinary underwriting, but cost control must be paired with this, which it is not, and a predictable smashup will occur, though it will be spun away as best the powers can spin it.

A roofing company or a crab boat owner pays higher disability rates on its workers than an actuarial partnership, so insurance comes down to distributing the cost of random events. The rest is redistribution, no matter what its supporters choose to call it.

Ha
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Old 06-07-2013, 10:25 AM   #52
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Although narrowly defined the resource flow from healthy plan participants to unhealthy ones may not ordinarily be called a subsidy, economically it is. With adequate underwriting (making underwriting illegal is one goal of this legislation) this flow would not exist, and all that would be left would be luck, which is as you say the purpose of insurance. Distributing random costs. It may be a social goal to do no ordinary underwriting, but cost control must be paired with this, which it is not, and a predictable smashup will occur, though it will be spun away as best the powers can spin it.

A roofing company or a crab boat owner pays higher disability rates on its workers than an actuarial partnership, so insurance comes down to distributing the cost of random events. The rest is redistribution, no matter what its supporters choose to call it.

Ha
The exchange prices we have seen so far are close to those of large group policies (where there is limited underwriting), so there is not any meaningful evidence of redistribution among the insured population eligible to use the exchange. There is significant redistribution, but from the taxpayer to the "qualified subsidy recipient", needy or clever. It is just one of many transfers that result from a lack of cohesive healthcare policy,and is not the largest by far.

Allowing different underwriting standards to apply across different groups of the population, with the insurers in charge of the application and having a financial interest in the outcome is a clear conflict. It's probably not a root cause of the out of control cost of healthcare in the US but it assures a very discriminatory access to coverage.
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Old 06-07-2013, 10:35 AM   #53
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Have you noticed that this issue has not been addressed in the new and wondrous legislation?

Ha
Yes, Ha, I have noticed it is not addressed. What I wrote actually was my personal experience. Ended up in the ER. ER doc told me I had to be admitted. Didn't want to as I felt it could be treated at home. After all, I had been at home with it, walking around, shopping with my daughter, etc.

He then told me if I did not do what he said, my insurance would not cover the ER visit. Then he wouldn't release me until he did a CT scan of my brain. No darn reason for that CT scan. I don't know if the ER doc was correct or not but I did not appreciate the implied threat.

Hospitals putting pressure on the doctors to help the hospitals make a profit has been a huge part of the problem. 60minutes did a segment on that in the last year or two that I believe has been discussed here.
That speaks to controlling costs.

I'm sure a lot of us here have had similar experiences.
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Old 06-07-2013, 11:02 AM   #54
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And a great incentive it is for one to seek employment.
+1
My thoughts exactly. With food stamps, subsidized housing, welfare, SSN and now health care, why SHOULD anyone be bothered to work. What are we doing to the younger generations!! For that matter, what have we already done to the?

It's the disincentive to take responsibility for oneself to the extent one can that bothers me tremendously.
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Old 06-07-2013, 11:30 AM   #55
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The PPACA allows the premium to be increased by up to 50% for a smoker but each state is free to implement as they wish, or not implement at all. The insurers are still subject to the same MLRs so the additional premium could end up being returned to all policyholders.
I think smoking should be a pre-existing condition..........
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Old 06-07-2013, 11:33 AM   #56
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The exchange prices we have seen so far are close to those of large group policies (where there is limited underwriting), so there is not any meaningful evidence of redistribution among the insured population eligible to use the exchange. There is significant redistribution, but from the taxpayer to the "qualified subsidy recipient", needy or clever. It is just one of many transfers that result from a lack of cohesive healthcare policy,and is not the largest by far.
Uh...no............
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Old 06-07-2013, 12:12 PM   #57
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+1
My thoughts exactly. With food stamps, subsidized housing, welfare, SSN and now health care, why SHOULD anyone be bothered to work. What are we doing to the younger generations!! For that matter, what have we already done to the?

It's the disincentive to take responsibility for oneself to the extent one can that bothers me tremendously.
Agree completely. Many sociologists and political scientists have pointed out that there are two leisure classes in modern welfare societies. The very top, and the very bottom. It amuses me that the "poor" are usually referred to as "those less fortunate than us". But this is a matter of judgment. ERs, who above all appreciate the value of leisure and strive to leave the working world as early as they can, will never rival the "poor", who play during school while we losers are hitting the books, then go straight to hanging out on the corner, going to cock fights and drinking and smoking if men, or if women having the babies that middle class people often feel that they cannot afford to have. All this with good incomes in guaranteed services and cash from the Great Father the State.

Sounds like we strivers are the less fortunate. Someone should be directing charitable giving to us.

Ha
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Old 06-07-2013, 12:37 PM   #58
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I think smoking should be a pre-existing condition..........
+1
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Old 06-07-2013, 12:37 PM   #59
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Agree completely. Many sociologists and political scientists have pointed out that there are two leisure classes in modern welfare societies. The very top, and the very bottom. It amuses me that the "poor" are usually referred to as "those less fortunate than us". But this is a matter of judgment. ERs, who above all appreciate the value of leisure and strive to leave the working world as early as they can, will never rival the "poor", who play during school while we losers are hitting the books, then go straight to hanging out on the corner, going to cock fights and drinking and smoking if men, or if women having the babies that middle class people often feel that they cannot afford to have. All this with good incomes in guaranteed services and cash from the Great Father the State.

Sounds like we strivers are the less fortunate. Someone should be directing charitable giving to us.

Ha
+1... But you forgot to mention free cell phones, too! The current system would work just fine in the "theoretical world". Unfortunately, human nature can be modified with incentives and disincentives that create the problems you describe above.
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Old 06-07-2013, 01:29 PM   #60
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Agree completely. Many sociologists and political scientists have pointed out that there are two leisure classes in modern welfare societies. The very top, and the very bottom. It amuses me that the "poor" are usually referred to as "those less fortunate than us". But this is a matter of judgment. ERs, who above all appreciate the value of leisure and strive to leave the working world as early as they can, will never rival the "poor", who play during school while we losers are hitting the books, then go straight to hanging out on the corner, going to cock fights and drinking and smoking if men, or if women having the babies that middle class people often feel that they cannot afford to have. All this with good incomes in guaranteed services and cash from the Great Father the State.

Sounds like we strivers are the less fortunate. Someone should be directing charitable giving to us.

Ha
That may be where we are headed although may take a bit longer to get there.
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