Senator Wyden's "health care plan for all Americans"

[REWahoo]

Isn't it OK for me to have differing views than most of the other people in the forum?

I don't think the fact that you have differing views is the issue, as few of us agree on everything. The point is you appear to be a one-dimensional, one-topic poster which is very suspect and quickly grows old.

 

[mykidslovedogs]

OOps! Well, I had a few days off and the topics that I saw out on your forum got me all fired up, so I just wanted to get my points of view across, which i guess I already have... I would love to hear from some more people who have ideas about how to fix the problems. I hear a lot of complaining and a lot of animosity towards the insurance industry with very few concrete thoughts about how to begin to fix the issue.

When people start talking about the evil insurance companies, it gets me all fired up, because I am not a believer in conspiracies or corporate greed. I believe that corporations do what they need to be profitable and to stay in business, and all of it (pricing, etc..) is influenced by the laws of supply and demand as well as the impacts of goverment regulation.

Anyways, I have to go back to work this week, so you all probably won't be hearing much from me anymore. Thanks for listening...I hope some of my ideas hit home for some of you. I'll check in every now and then. If anyone needs help or advice about health insurance in the state of Colorado, let me know. I'll do the best I can....

 

[Martha]

You should keep an eye on Massachusetts...the law recently change and as of (I think) July 1st everyone must have or purchase insurance. Companies (with more than 10 employees) must contribute or pay (a pitifully small) "tax" of $295 per employee. For those that can't afford it (based on a multiple of Fed poverty levels and family size and income), there is a sliding scale reimbursement or premium assistance. It'll be interesting to watch and see what happens. I live in Mass, and would like to see it work out, so I have more than a passing interest - hope it doesn't become a real budget buster.

Yes, I am really curious as how this is going to work in MA.

 

[Martha]

Martha--In reference to the buy up. At our last jobs both my wife adn I hadinsurance from our respective employers. Hers cost half as much as mine did in monthly premiums. Hers also had more co-pays and deductibles than mine. In the end hers was more expensive if we needed it. Since everyone in our family is relatively healthy we would opt to go with her plan since it has cheaper monthly payments.

If soemone decides their family is healthy enough to warrant a cheaper plan, but are willing to take on the higher 'use fees' then they should be allowed to opt into this plan and receive the difference in cost between that and the basic plan. Conversely if someone is not so healthy, they could opt into a higher cost plan, but have less use fees resulting in a savings for them.

I still don't like univsersal health care.

I don't have a problem with different deductible levels. Minnesota does that with its risk pool. You can chose anywhere from a $500 deductible to a $10,000 deductible.

 

[MasterBlaster]

If insurance carriers remain predominant in the system, $.35 of every $1.00 spend on health care will still go toward administrative costs and profits.

Rich_in_Tampa:

The 35 % for administration and profits must include all of the caregivers/hospitals/labs etc. It can't just include the insurance aspects. Otherwise this number is way way too high.

To then conclude that there is 35 percent that could potentially be wrung out of the system is perhaps misleading.

Do you have a reference to your number ??

 

[donheff]

Anyways, I have to go back to work this week, so you all probably won't be hearing much from me anymore. Thanks for listening...I hope some of my ideas hit home for some of you. I'll check in every now and then. If anyone needs help or advice about health insurance in the state of Colorado, let me know. I'll do the best I can....

That statement just convinced me that Ha Ha was correct.

 

[Martha]

Rich_in_Tampa:

The 35 % for administration and profits must include all of the caregivers/hospitals/labs etc. It can't just include the insurance aspects. Otherwise this number is way way too high.

To then conclude that there is 35 percent that could potentially be wrung out of the system is perhaps misleading.

Do you have a reference to your number ??

Rich can probably give you several sources. I have read that admin costs are about 1/3 of the health care dollar. Attached is a link to an abstract of New England Journal of Medicine article which shows admin costs at 31%. The article dates from 2003 and my understanding is that the costs have increased. Unfortunately, the abstract doesn't break down what exactly are admin costs, but I am sure you are right that not all can be wrung out of the system. If we could cut it down to closer to what Canada pays for admin costs (17%) that would be great.

http://content.nejm.org/cgi/content/abstract/349/8/768

 

[MasterBlaster]

Martha:

OK, so that 35% is for ALL administration. Not just for insurance.

Rich_in_Tampa had implied that by doing some sort of medical re-arrangement that got rid of the insurance aspect that 35% could be saved. That number is just way too high.

So if we take the Canada model maybe there is 10 or 15% savings to be had. That seems more plausible.

 

[Martha]

Quite a bit of information here.

http://wyden.senate.gov/Healthy_Americans_Act/HAA_Cost_Coverage_Report.pdf

Thanks! I just printed it off and am reading it. Far more complete than the bits and pieces we have been talking about.

The premiums for the insurance would be paid through people's annual income tax filings. Poor people's premiums would be subsidized. Employers also will pay an assessment ranging from 2 to 25% of the national average premium for the minimum benefits package, depending on size and revenues. What I like about this is it is an easy way to get everyone covered if premiums are collected through the tax system.

 

[Rich_by_the_Bay]

To then conclude that there is 35 percent that could potentially be wrung out of the system is perhaps misleading.

Do you have a reference to your number ??

I re-read my post and don't believe I said or meant that all adminstrative costs could be wrung out of the system. Just that 35% of every dollar spent is spent on administration, and that this is very, very high compared to other systems. Drastic reductions are possible within reasonable scenarios. 30%-35% is unprecedented world-wide.

http://content.nejm.org/cgi/content/abstract/349/8/768

"Methods For the United States and Canada, we calculated the administrative costs of health insurers, employers' health benefit programs, hospitals, practitioners' offices, nursing homes, and home care agencies in 1999. We analyzed published data, surveys of physicians, employment data, and detailed cost reports filed by hospitals, nursing homes, and home care agencies. In calculating the administrative share of health care spending, we excluded retail pharmacy sales and a few other categories for which data on administrative costs were unavailable. We used census surveys to explore trends over time in administrative employment in health care settings. Costs are reported in U.S. dollars.

Results In 1999, health administration costs totaled at least $294.3 billion in the United States, or $1,059 per capita, as compared with $307 per capita in Canada. After exclusions, administration accounted for 31.0 percent of health care expenditures in the United States and 16.7 percent of health care expenditures in Canada. Canada's national health insurance program had overhead of 1.3 percent; the overhead among Canada's private insurers was higher than that in the United States (13.2 percent vs. 11.7 percent). Providers' administrative costs were far lower in Canada.

Between 1969 and 1999, the share of the U.S. health care labor force accounted for by administrative workers grew from 18.2 percent to 27.3 percent. In Canada, it grew from 16.0 percent in 1971 to 19.1 percent in 1996. (Both nations' figures exclude insurance-industry personnel.) "

Other estimates range even higher, but this article is considered to be accurate if conservative. Of course, there will always be some administrative cost - it would be naive to claim otherwise. The absolute difference of 14% of all health care dollars between the US and Canada is a staggering amount of money.

Hope that clarifies.

 

[mykidslovedogs]

That statement just convinced me that Ha Ha was correct.

What!? It's true. I am a very busy person. I don't get it. This is the first time I have ever joined a forum and I thought it would be fun to put some of my opionions out there, and maybe spark some debate.....Oh well, guess you can't win for losin'..... I thought there might be some people out there that agree with my opinions.

 

[BarbaraAnne]

I, for one, would like to hear what you have to say, mykids...

It's good to hear all sides of this discussions and you are obviously informed.

Please stick around...

 

[donheff]

What!? It's true. I am a very busy person. I don't get it. This is the first time I have ever joined a forum and I thought it would be fun to put some of my opionions out there, and maybe spark some debate.....Oh well, guess you can't win for losin'..... I thought there might be some people out there that agree with my opinions.

Your opinions are interesting but as Ha Ha said, you sound like a shill. Come clean with us about who you work for and we will be more comfortable. We have no problem with FinanceDude who is a financial Adviser -- but he was, and is, out front about it.

If you are just a guy who is interested in health care system - I apologize.

 

[Martha]

What!? It's true. I am a very busy person. I don't get it. This is the first time I have ever joined a forum and I thought it would be fun to put some of my opionions out there, and maybe spark some debate.....Oh well, guess you can't win for losin'..... I thought there might be some people out there that agree with my opinions.

I just think people like to know other people's backround to evaluate where they are coming from. Our culture at this forum favors those who tell a little about themselves before jumping into discussions. But I do appreciate that you have kept the discussion civil. You and I will probably disagree consistently as to the effectiveness of the "free market" and the need for a safety net. Nevertheless, values and politics aside, it is helpful to have an insurance agent participate in the health care discussions as you may have information regarding underwriting and cost (at least for Colorado) that is not readily available.

If you have a chance, I suggest reading the Lewin Group's cost and coverage estimates for the "Healthy Americans Act" that FIRE@51 linked to above. This plan keeps insurance companies in the mix, has a simple payment system, and provides near universal coverage. I am intrigued. The downside for you personally would be no more agent commissions.

How much of your business is health insurance? Group and individual? Do you sell other insurance products as well?

 

[mykidslovedogs]

Your opinions are interesting but as Ha Ha said, you sound like a shill. Come clean with us about who you work for and we will be more comfortable. We have no problem with FinanceDude who is a financial Adviser -- but he was, and is, out front about it.

If you are just a guy who is interested in health care system - I apologize.

Don - I am a self employed insurance agent licensed in the State of Colorado. I do not have my insurance tied to my company. I have an individual insurance plan, just like I stated before. I haven't been dishonest in any of my posts.

 

[mykidslovedogs]

How much of your business is health insurance? Group and individual? Do you sell other insurance products as well?

We sell primarily small and medium sized group benefit plans including health, life, dental, vision, disability, longterm care, and cafeteria plans. We are beginning to move into the individual and family market due to our foresight about the future of group benefits.

 

[mykidslovedogs]

I just think people like to know other people's backround to evaluate where they are coming from. Our culture at this forum favors those who tell a little about themselves before jumping into discussions. But I do appreciate that you have kept the discussion civil. You and I will probably disagree consistently as to the effectiveness of the "free market" and the need for a safety net. Nevertheless, values and politics aside, it is helpful to have an insurance agent participate in the health care discussions as you may have information regarding underwriting and cost (at least for Colorado) that is not readily available.

Martha,

In the state of Colorado, there are three main reasons why employer-sponsored benefits are twice as expensive as individual plans.

1.) They are guaranteed issue - Anyone with any health history can qualify without pre-existing condition limitations.

2.) Maternity coverage is mandated whether you need it or not.

3.) Adverse selection - Since prices are so high, the healthy tend to drop out of the group market leaving a large number of unhealthy people in the risk pool.

I read the Healthy Americans Act, and it has good intentions except for the following negative consequences:

1.) As you stated before, it doesn't address what happens to the unemployed. Since the unemployed might still have to have an indivdual plan, you can't eliminate individual products from the market.

2.) I don't think community rating is going to make the pricing that much better in the group market, because pricing already reflects guaranteed issue coverage and mandated maternity coverage, and community rating is not going to change that..it might bring the premiums down a little, but I don't believe it will be a significant difference. Sure, you take adverse selection out of the mix, but pricing will still have to take into account guaranteed issue and guaranteed maternity coverage. Therefore, you may be FORCING a large number of people to pay for coverage that they don't want, when they could have bought a cheaper plan on their own.

Why do I say this? Because currently, many small employers don't pay more than 50% of the employee's premium so SOME employees can still buy individual coverage for less than their half of the premium costs in the group market (especially if the employer only offers one plan choice and that plan happens to be a high-end plan). Are we going to FORCE employers to now pay 100% of the employee premium as well as 100% of the premiums for their dependents? If not, then are we going to FORCE all Americans to pay more for their dependents than they could have paid in the individual market? A lot of my clients save a fortune right now by placing their one or two healthy children on an individual plan vs. paying the difference for the family rate on a group plan.

3.)The "Standard" plan is a pretty rich plan, and compared to many other types of plans (high deductible, etc..., it is pretty pricey. If I am healthy, and I don't need such a rich benefit, why should I be forced to buy into it? Granted, my employer might pay 50% of the premiums for my coverage but my half might still be more expensive than an individual high deductible policy might be.

These are just some of my thoughts....my opinions...

 

[donheff]

We sell primarily small and medium sized group benefit plans including health, life, dental, vision, disability, longterm care, and cafeteria plans. We are beginning to move into the individual and family market due to our foresight about the future of group benefits.

That wasn't so hard, was it? Sounds like this area is your work and your passion and you just want to speak from your experience. Sorry for the cold shoulder. Don't just stay with what you know - join in some other threads.

 

[Martha]

Martha,

In the state of Colorado, there are three main reasons why employer-sponsored benefits are twice as expensive as individual plans.

1.) They are guaranteed issue - Anyone with any health history can qualify without pre-existing condition limitations.

2.) Maternity coverage is mandated whether you need it or not.

3.) Adverse selection - Since prices are so high, the healthy tend to drop out of the group market leaving a large number of unhealthy people in the risk pool.

Give me figures on the extent the healthy drop out of the group market and go to the individual market. I haven't read about that as a significant trend. We do have young, single healthy people sometimes forgoing insurance, but that effects group and individual markets the same. Also, I have read various studies indicating that people tend not to be on individual policies for very long. Same for the risk pools oddly enough. People don't stay on them long term.

True, individual plans are cheaper for young healthy people who are not going to have children, but the older you get the more expensive they are. The compromise is to pay a bit more when you are young and healthy to get coverage for you and your family for life.

I read the Healthy Americans Act, and it has good intentions except for the following negative consequences:

1.) As you stated before, it doesn't address what happens to the unemployed. Since the unemployed might still have to have an indivdual plan, you can't eliminate individual products from the market.

The unemployed work directly through the state administrator to sign up for insurance and premiums are paid through their taxes. If they are low income enough not to have to file tax returns, the assumption is that their premium would be totally subsidized.

2.) I don't think community rating is going to make the pricing that much better in the group market, because pricing already reflects guaranteed issue coverage and mandated maternity coverage, and community rating is not going to change that..it might bring the premiums down a little, but I don't believe it will be a significant difference. Sure, you take adverse selection out of the mix, but pricing will still have to take into account guaranteed issue and guaranteed maternity coverage. Therefore, you may be FORCING a large number of people to pay for coverage that they don't want, when they could have bought a cheaper plan on their own.

The groups in the Wyden plan will be 10,000 or more. These size groups are the cheapest to insure because of spreading the risk. The Lewin report gives estimates for estimated costs of insuring groups of that size. Yes, some people who are very young and healthy may pay more through taxes than they would an individual policy. But, they are guaranteed coverage for life. Additionally, you don't pay your entire premium, part is subsidized by charges to employers which I mentioned in a previous post. Remember, the individual/family nongroup market is only 4% of the entire market. In contrast we have 15+% of people in the US who are unisured. So we force a few people to pay more in taxes to get more heath insurance than they want--doesn't look like a huge problem to me.

Why do I say this? Because currently, many small employers don't pay more than 50% of the employee's premium so SOME employees can still buy individual coverage for less than their half of the premium costs in the group market (especially if the employer only offers one plan choice and that plan happens to be a high-end plan). Are we going to FORCE employers to now pay 100% of the employee premium as well as 100% of the premiums for their dependents? If not, then are we going to FORCE all Americans to pay more for their dependents than they could have paid in the individual market? A lot of my clients save a fortune right now by placing their one or two healthy children on an individual plan vs. paying the difference for the family rate on a group plan.

Are you sure you read Wyden's plan? This is not how it works. Employers pay a charge based upon their revenues and the number of FTE jobs. This charge is pretty small for small employers. See the Lewin report.

3.)The "Standard" plan is a pretty rich plan, and compared to many other types of plans (high deductible, etc..., it is pretty pricey. If I am healthy, and I don't need such a rich benefit, why should I be forced to buy into it? Granted, my employer might pay 50% of the premiums for my coverage but my half might still be more expensive than an individual high deductible policy might be.

These are just some of my thoughts....my opinions...

If you don't require everyone to participate we are back to adverse selection problems. By requiring all to participate costs will go down in the system. Yes there likely tradeoffs, but given the guarantee of health insurance throughout your life, guaranty that your family will be covered, an easy payment system with a tax credit, I think the tradeoffs could be worth it. I like the subsidy system with no premium due if you make less than the poverty level, and premiums phased in after that. We also may have insurance companies competing on price rather than competing for the healthy.

I still have not formed a final opinion, but the Lewin analysis was encouraging.

 

[sgeeeee]

But david-in-SC already told us all we need to know - its a "typical liberal (socialistic) plan"...enough said. How can you dispute a well thought out argument like that?

Yeah . . . let's all start pooping right now.

 

[sgeeeee]

. . .By the way, I think it's better to annuitize than to pay off your mortgage.....

Well, that does it. I was reading your posts but if that's the way you feel, then you have no credibility. You probably waste dryer sheets too, don't you.

 

[mykidslovedogs]

Give me figures on the extent the healthy drop out of the group market and go to the individual market. I haven't read about that as a significant trend. We do have young, single healthy people sometimes forgoing insurance, but that effects group and individual markets the same.

Here is some statistical information that you might find helpful:

http://www.nahu.org/legislative/uninsured/uninsuredfactsheet.pdf

 

[mykidslovedogs]

And here is another article that might interest you:

http://www.nahu.org/legislative/market_reform/revised_markets_paper.pdf

 

[mykidslovedogs]

And here's some information on that Massachusetts reform:

I have no opion yet on how this is going to turn out:

http://www.nahu.org/legislative/market_reform/MassachusettsHealthCareReform.pdf

 

[mykidslovedogs]

Are you sure you read Wyden's plan? This is not how it works. Employers pay a charge based upon their revenues and the number of FTE jobs. This charge is pretty small for small employers. See the Lewin report.

Oops! I must have clicked the wrong link cuz I read the summarized version and not the full version. But, here are a coupls things I still don't get about the HAA plan. How in the world did they come up with the figures for the estimated National Average Premium? Those figures seem very low for such a rich plan with a low $250.00 deductible and only $15.00 office visit and the $10.00 copay for up to 90-day supply of generic prescriptions. I think they might be underestimating the risk to insurers on loss ratios, but, then again, I don't have any statistics to back that up.

If employers are only going to pay a percentage of the National Average Premium, then it Is going to be the higher income families making up for the difference and being forced to pay extra for coverage for their dependents that they would not have otherwise had to pay. I didn't see where these folks would have an income tax reduction in other areas, so I am assuming that they will pay more for their health insurance AS WELL as pay the same or more taxes that they already pay.

Why not get rid of Medicaid as the HAA proposes, but instead of FORCING people to participate, just provide tax incentives, similar to what the HAA proposes, for buying insurance and allow people to choose their own plans? If you don't participate, you don't get the tax break. Providing tax incentives would likely help eliminate a HUGE percent of the uninsured market. With a larger population of insureds, rates would inevitably come down, making risk-pool coverage much more affordable for the "uninsurable". I realize that this may not seem fair to the uninsurable, but they account for such a tiny segment of the population...Besides, the government could still offer risk-pool coverage on a national, instead of state level and subsidize it on a sliding scale. Surely, a system like that would be much less costly for the folks paying the majority of taxes (those making over $50,000/yr.). This is because many of the the people who are healthy (the majority of people) will choose plans that are less expensive than the HAA proposed "Standard Plan". They would have incentive to do that, because their taxes would be lower if they choose a higher deductible plan.