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Old 12-12-2007, 08:49 AM   #21
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Health insurance underwriting serves the financial interests of the carrier and will virtually always lead to discrepancies in availability of insurance, exaggerated premiums for some, and system gaming. I am not aware of any evidence that underwriting lowers costs overall, though it may do so for a specific carrier in specific markets.

Largely the result is cost shifting toward the insured, affluent population in the form of entitlement programs, taxes, grotesque pricing schemes (the $70 tylenol pill in the hosptial), and disruption of career and personal life planning due to exaggerated dependence on sources of health insurance outside the workplace.

If the playing field is leveled to the point of defining basic levels of coverage, and if underwriting were eliminated, carriers could compete on the basis of price, efficiency, marketing skills, customer satisfaction, prevention add-ons, and all the other free market issues, albeit with oversight. Those without means would still need subsidization but not necessarily a separate entity like Medicaid.

It's not a "socialized medicine" or political thing - just reflects the unique characteristics and imperatives of health insurance as compared to other types of insurance.
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Old 12-12-2007, 08:51 AM   #22
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Originally Posted by kcowan View Post

So the employer is saying that if an employee happens to earn a cheaper category, he is willing to share the savings with them. This seems to be pretty democratic to me.

Any other argument seems to lean towards socialism.

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a cheaper category? Classification by health may have nothing to do with what you do and your lifestyle. Type 1 diabetes is an example.

The problem with the US private insurance market is that the unhealthy are too expensive, no one wants to cover them and pay for their care and they can't afford to pay for their own care. But if we all share the cost it works out ok. We need people who are healthy to contribute to the system. However, if you are healthy today, you may not be tomorrow so it is in your interest to participate.

Not undemocratic to me, given that democratic implies social equality and fairness.
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Old 12-12-2007, 04:51 PM   #23
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The problem with the US private insurance market is that the unhealthy are too expensive, no one wants to cover them and pay for their care and they can't afford to pay for their own care. But if we all share the cost it works out ok. We need people who are healthy to contribute to the system. However, if you are healthy today, you may not be tomorrow so it is in your interest to participate.
I told myself I wouldn't post in any more healthcare discussions.....

Those who pose more risk to the insurance company should pay more. It's common practice in the banking and mortgage industries. The amount of risk we pose to a mortgage company dictates the interest rate we end up paying on the loan.

Should we argue, if we have bad credit, that because somebody else with good credit has applied for the same type of loan we should be given the same rate of interest that they qualify for? That logic doesn't make sense to me.
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Old 12-12-2007, 07:03 PM   #24
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Those who pose more risk to the insurance company should pay more. It's common practice in the banking and mortgage industries. The amount of risk we pose to a mortgage company dictates the interest rate we end up paying on the loan.

Should we argue, if we have bad credit, that because somebody else with good credit has applied for the same type of loan we should be given the same rate of interest that they qualify for? That logic doesn't make sense to me.
Eyerishgold, I realize your position is not meant to be absolute or insensitive, and I get the gist of what you're saying. But it's a slippery slope.

Should an individual who has type 1 (childhood onset) diabetes and thus faces greater challenges in all ways, should be asked to pay a high premium for the rest of their life, or else face poverty after their first major complication? Or someone with cerebral palsy requiring everything from bladder care to a wheel chair should be faced with higher premiums? Or an upstanding adult who suffered a heart attack or stroke (many have no lifestyle risk factors) should be sentenced to crushing premiums forever?

Peoples' impairments and risks, especially when they happen through no fault or decision of the victim, are not cars or mortgages or houses. I don't think a prosperous country should treat them as such. Want to rate my auto policy because I bought a motorcycle? Fine. Want to rate my health insurance premiums because I developed cancer and survived? I don't support that, and careful what you wish for.

I also think it's bad business to do so. Their needs go on well after they are medically bankrupt, and who ends up paying?

Trust me, horrible things happen every day to people like you and me who did nothing "wrong." Things most people can't even pronounce, let alone imagine. Any one of them would make you instantly uninsurable the day they occur. To say, "too bad, I'm healthy, I win, you lose" may not be the best solution.
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Old 12-12-2007, 07:05 PM   #25
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I told myself I wouldn't post in any more healthcare discussions.....

Those who pose more risk to the insurance company should pay more. It's common practice in the banking and mortgage industries. The amount of risk we pose to a mortgage company dictates the interest rate we end up paying on the loan.

Should we argue, if we have bad credit, that because somebody else with good credit has applied for the same type of loan we should be given the same rate of interest that they qualify for? That logic doesn't make sense to me.
Same thing with auto insurance.

Quote:
Earn a cheaper category? Classification by health may have nothing to do with what you do and your lifestyle. Type 1 diabetes is an example.
I'd say that you can't look at it as just any one health issue. I do think that a person with Type 1 diabetes who eats healthful food, exercises, doesn't smoke, etc. should have a lower premium than a person who has it but doesn't do those things.
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Old 12-12-2007, 07:56 PM   #26
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Originally Posted by Eyerishgold View Post
I told myself I wouldn't post in any more healthcare discussions.....
Me too.



Quote:
Should we argue, if we have bad credit, that because somebody else with good credit has applied for the same type of loan we should be given the same rate of interest that they qualify for? That logic doesn't make sense to me.
The good credit--bad credit example reminds me of redlining. No matter how good you were with money or how much you made, if you lived in the wrong neighborhood you paid a higher interest rate. Or paid more for insurance. Or couldn't get a loan at all.

Yes, credit decisions should be about risk, but with fairness. So if you personally make bad money decisions, you can get penalized. But if you neighborhood is poor or the wrong color, you should not get penalized.

I agree that insurance is about risk. That is why the insurance model does not work especially well for health care. Insurance companies don't want to cover people who will cost more than their premiums. People are limited in their ability to control how much health care they need. So we address this with all sorts of rules. If we decide to keep insurance companies as a mechanism to pay for health care, do as Rich suggests and drop underwriting and let the companies compete on price, not on who they will insure.


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I'd say that you can't look at it as just any one health issue. I do think that a person with Type 1 diabetes who eats healthful food, exercises, doesn't smoke, etc. should have a lower premium than a person who has it but doesn't do those things.
This does sound more appealing. But who will be the health care police? Who is going to look in my fridge and see if I went out for a walk today?
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Old 12-12-2007, 08:18 PM   #27
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This does sound more appealing. But who will be the health care police? Who is going to look in my fridge and see if I went out for a walk today?
I'd do it, but I already have a job. A partial solution to the problem would be tagging food items that we purchase and feeding credit card, etc. information back to insurance companies.

Personally, I think we should have catastrophic health care insurance only and everything else should be paid by us. It's easy to say that I could follow that system now if I wanted to. Yes, it's true that I could, but I'd also get caught up in the health care prices that are artificially high due to meddling by insurance companies.

If we subsidized healthy foods or just didn't subsidize junk, we'd be giving a similar advantage to people. Maybe it's just that simple, paying the lower price upfront instead of waiting until you pay a premium or stand at the doctor's counter.
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Old 12-12-2007, 08:24 PM   #28
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But if we all share the cost it works out ok.
Really? The only things I can think of that we share the cost on and 'it works out ok' are the things we can't do alone (roads, military, police, fire, etc).

Let's all put in $X/week, and grocery stores wouldn't have check outs - just take what you need. Same with gas stations. If people take too much, just raise the collection rate. Would that 'work out ok'?

Why should health care be different? If we all share the cost, where is the individual incentive to keeps costs constrained? That's part of the problem with current health insurance.

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... given that democratic implies social equality and fairness.
I thought democratic meant we had an equal say in how things are run ('rule by the people' says my dictionary)? Perhaps you meant 'socialism'?

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Old 12-12-2007, 08:37 PM   #29
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IA partial solution to the problem would be tagging food items that we purchase and feeding credit card, etc. information back to insurance companies.
I can only hope that you're kidding. Too Orwellian for me.

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Personally, I think we should have catastrophic health care insurance only and everything else should be paid by us.
That's an idea with merit - it explains the popularity of high deductible policies with health savings accounts. The issue is what to do about first-dollar health care costs for people with low incomes. Government?
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Old 12-12-2007, 08:38 PM   #30
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R
I thought democratic meant we had an equal say in how things are run ('rule by the people' says my dictionary)? Perhaps you meant 'socialism'?

-ERD50
I refer to Webster's definitions:


1: of, relating to, or favoring democracy2often capitalized : of or relating to one of the two major political parties in the United States evolving in the early 19th century from the anti-federalists and the Democratic-Republican party and associated in modern times with policies of broad social reform and internationalism3: relating to, appealing to, or available to the broad masses of the people <democratic art>4: favoring social equality : not snobbish
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Old 12-12-2007, 09:03 PM   #31
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I can only hope that you're kidding. Too Orwellian for me.
I have a little bit of that feeling in me as well, but it would be up to the people to participate.

Quote:
I refer to Webster's definitions:
Agreed. Also, I think it's dependent upon how you interpret "social equality" and "fairness". As it so happens, I just read an article that has a section about what "fairness" is. The author, a Chinese economist, provides 4 explanations of the term.
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Old 12-12-2007, 09:12 PM   #32
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Originally Posted by starter82
Personally, I think we should have catastrophic health care insurance only and everything else should be paid by us.



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Originally Posted by Rich_in_Tampa View Post
That's an idea with merit - it explains the popularity of high deductible policies with health savings accounts. The issue is what to do about first-dollar health care costs for people with low incomes. Government?
Isn't that the idea behind some of the 'donut hole' plans? The 'provider' (who/whatever that may be) pays the catastrophic costs, and also the first $X in costs, up to some fairly low limit.

The idea is that people would go in and get things taken care of before they got worse, and would get preventative care, because it was paid for. This helps to reduce expenses down the road by encouraging good habits now.

My dental policy is like that. Cleaning and check ups 2x/year are essentially no cost. But a fairly steep co-pay for work beyond that. Hey, we all need incentives to see the dentist, right?

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Old 12-12-2007, 09:15 PM   #33
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I refer to Webster's definitions:
4: favoring social equality
Well, maybe it is just semantics - but I take 'social equality' to mean equal opportunity, not equal outcomes.

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Old 12-12-2007, 09:22 PM   #34
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Are we talking about equity or equality?
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Old 12-12-2007, 09:28 PM   #35
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Are we talking about equity or equality?
Thanks, I patched it before the edit timer kicked in.

I need one of those 'post what I meant, not what I typed' features instead of a lame old spell checker!

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Old 12-12-2007, 09:36 PM   #36
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Isn't that the idea behind some of the 'donut hole' plans? The 'provider' (who/whatever that may be) pays the catastrophic costs, and also the first $X in costs, up to some fairly low limit.
Definitely elements of that. Except in your description "provider" means perhaps the employer or sponsor, while in most discussions "provider" means the doctor, dentist, podiatrist, etc.
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Old 12-12-2007, 09:45 PM   #37
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Well, maybe it is just semantics - but I take 'social equality' to mean equal opportunity, not equal outcomes.

-ERD50
I did not propose "equal outcomes." The concept doesn't really apply to the health care sector anyway and words like "democracy" and "socialism" don't advance the discussion, they just polarize it. That said, the choice doesn't have to be a choice between everyone getting the same result or everyone being on their own. Instead, as a society we decide what we value and how best to get there. We value education so we support public education. We see the need for a strong infrastructure so we pay for roads and bridges.

Our society does seem to see the value of treating people for their illnesses and helping people be healthy and productive members of society. We tried health insurance and employer provided insurance. But the market has not worked well because the insurance market does not want to pay for people who cost a lot of money. To address part of that issue, Medicare was enacted and insurance companies were thrilled. Other bandages are placed on perceived wounds (hospitals have to treat emergencies, various programs exist to provide care for kids, etc). But the health care sector is in trouble and I hope we value the health of our citizens enough to realize that national intervention is required.
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Old 12-12-2007, 09:52 PM   #38
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Definitely elements of that. Except in your description "provider" means perhaps the employer or sponsor, while in most discussions "provider" means the doctor, dentist, podiatrist, etc.
Yes, I meant 'provider' of the 'insurance'. -ERD50
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Old 12-12-2007, 10:13 PM   #39
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Our society does seem to see the value of treating people for their illnesses and helping people be healthy and productive members of society.
I agree and support that myself.

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We tried health insurance and employer provided insurance. But the market has not worked well because the insurance market does not want to pay for people who cost a lot of money.
I thought a large part of the problem was that since people were isolated from the real costs for so long ('my insurance covers it'), there isn't much real competition and cost control in the industry. I agree that if we are going to have some form of insurance, the companies shouldn't have too much leeway in excluding people from coverage - but they should be able to reduce their exposure to people voluntarily engaging in health-risky lifestyles. But as already mentioned, that's a tricky one.

Didn't the government kind of get us into this mess to start with? Wasn't it when the govt decided that money spent by companies for health insurance would be tax exempt, that the health insurance industry grew, and we found ourselves 'golden handcuffed' to our employers? Maybe I have that wrong, but it seems I've heard that explanation before - I have not followed the health coverage debate very closely. But if that is mostly true, it does make me skeptical of further govt involvement - but maybe this is an area it is needed.

I do know enough to know that it certainly is complex, and somebody will see 'unfairness' in any proposal, and they will probably be right. It is a tough nut to crack.

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Old 12-12-2007, 10:47 PM   #40
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I think the golden handcuffs started during WWII, when there were wage freezes and companies were looking for alternate ways to reward good employees - but I don't have a cite for that at the moment.
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