Speaking of ACA

[NW-Bound]

Just a few days ago, I read something similarly about how doctors behave when they themselves become patients.

When their own life is on the line, doctors want overtesting and overtreatment just like layman patients.

 

[ziggy29]

Perhaps also another aspect of cost is the copious testing that's become part of most diagnoses these days.

I read this piece recently, from an actual Doctor who is aware of the over-testing issue, and a fascinating story of how the tables were turned on him when he was caught up as the patient:

https://www.healthaffairs.org/doi/f...d=ori:rid:crossref.org&rfr_dat=cr_pub=pubmed&

tl;dr, when you are sick or in pain, and they keep saying "eh let's check just in case" it's very hard to say no, and your $500 visit becomes a $9000 visit.

I have a friend who reported on FB just this morning that her doctor called her in the middle of the night (!!!) to tell her that her lab work had just come in and one of the numbers was dangerously high. She went in for an IV first thing this morning per the doc's recommendation, had the procedure, and it turned out the lab result was a false positive reported on her blood work and was actually normal.

The unnecessary scare aside, no doubt she will be stuck with the bill, especially if her deductible hasn't been met.

 

[ziggy29]

When their own life is on the line, doctors want overtesting and overtreatment just like layman patients.

They probably don't have plans with $7,000 individual deductibles.

 

[MichaelB]

Just a few days ago, I read something similarly about how doctors behave when they themselves become patients.

When their own life is on the line, doctors want overtesting and overtreatment just like layman patients.

Here's a brand new study that reaches a different conclusion. From the abstract

To do so, we compare the care received by a group of patients that should have the best possible information on health care service efficacy—i.e., physicians as patients—with a comparable group of non-physician patients, taking various steps to account for unobservable differences between the two groups. Our results suggest that physicians do only slightly better in adhering to both low- and high-value care guidelines than non-physicians – but not by much and not always.

Study here https://www.nber.org/papers/w26038

 

[copyright1997reloaded]

One difference is that corporate group coverage is not age rated, but most states do allow age rating for plans purchased through their exchanges. So a young person leaving a corporate plan will often get a price break when switching to an ACA plan, while an older person doing the same will suffer some sticker shock.

For our specific plan, a couple that is currently 63/64 pays 55% more than one that is 53/54. Looking at it year-by-year, I've found that about 1/3 of our premium increases have been age related and 2/3 not.

Even in non-community rated sates (where age can be a factor in price setting), there are ACA limits on the differential that are less than what would occur using actual cost data. That range (for most states) is 3:1, i.e. if a 21 year old was paying x, a 65+ person would be required at most to pay 3X. Note that the federal table allows for further discounts under age 21, e.g. age 16 would be .86x.

I know this for a fact as I created a ACA premium database "for fun" when the government site wasn't working. I was able to use ACA excel spreadsheets and created the database in under three hours - you could enter you state, age, and it would spit out non-subsided premium data for any state w/i the federal program. It utilized the federal (and special case states) to calculate premium differentials based on age.

Some states further limit: NY, VT do not allow age factor (at all). Mass had a 2x range limit. A few others use the 3:1 but have different curves (e.g. Utah).

As I stated in my earlier post, old and/or unhealthy adults get good deal under ACA (even w/o income subsidy) while younger, healthy adults pay more than they should. (In addition to taxpayers who pay for the low income subsidies.)

 

[MichaelB]

As I stated in my earlier post, old and/or unhealthy adults get good deal under ACA (even w/o income subsidy) while younger, healthy adults pay more than they should. (In addition to taxpayers who pay for the low income subsidies.)

The US health insurance markets are over-segmented and age is just one facet of that. As pointed out by cathy63, the examples of successful insurance markets in the US, Medicare and Employer large group, either do not segment by age, or do so on a limited basis.

This segmentation by age, location, gender, health status, etc, are all schemes designed by insurers to lower the price of their product for one segment at the expense of another. Insurance is about sharing risk, and segmenting by age (or other factors) does just the opposite. It effectively allows the insurer to push the higher risk users out of the group. This favors the insurers, not the individually insured.

Health care for younger people is outrageously expensive. It is even more so for the rest of us. That’s the primary cause of high insurance premiums.

Trying to force down the insurance premiums without reducing the cost of health care is like looking to have a healthier diet but not changing any of the food we eat.

 

[scrabbler1]

This segmentation by age, location, gender, health status, etc, are all schemes designed by insurers to lower the price of their product for one segment at the expense of another. Insurance is about sharing risk, and segmenting by age (or other factors) does just the opposite. It effectively allows the insurer to push the higher risk users out of the group. This favors the insurers, not the individually insured.

As someone who worked in the actuarial field for 23 years, specializing in personal auto insurance, I have to take some exception to this, especially the use of the word "scheme."

A general principle of insurance is to properly rate each risk as best as possible as to avoid having non-homogeneous risks in the same group of risks. Doing so ends up having lower rated risks subsidizing higher rated risks.

For example, in personal auto, we try to group the more urban risks together while grouping the suburban risks together and the rural risks together. Combining non-homogeneous risks by rating territory together ends up having the lower-rated rural risks too high, subsidizing the urban risks.

This is why insurance companies charges drivers under age 25 more while charging older drivers (mainly those between ages 25 and 65) less. Not doing this would force older drivers to pay more to subsidize the younger ones. These rating differentials are reviewed annually.

This is why insurance companies charge drivers with bad driving records more than drivers with good driving records. Again, not doing this would force better drivers to pay more to subsidize the lousier ones. These rating differentials are reviewed annually.

There are limits, of course, to how far this can go. Insurance companies could not charge different rates by race, even if it could be justified by the data, because it would be discriminatory. Some states do not allow different rates by gender, though many do (mainly for drivers under 30).

In the more urban areas, there is a flattening of the class rating tables so that the "double-whammy" effect of being a young driver in an urban area, for example, is lessened.

Auto insurance, like health insurance, is highly regulated by the individual states. State regulators are free to allow or to disapprove of rate changes as well as rating class differentials, and in my 23 years in the auto insurance field they did each of them all the time.

I realize that in health insurance, the ability to charge different rates for various groups of people is limited compared to auto insurance. But some rating variables are permitted, such as geography and age, and if you smoke or don't. But to call these legitimate rating distinctions "schemes" puts an unwarranted negative slant on them. They are not designed to kick people out of the insurance system.

 

[ziggy29]

As someone who worked in the actuarial field for 23 years, specializing in personal auto insurance, I have to take some exception to this, especially the use of the word "scheme."

We tend to think of the word "scheme" in the pejorative, but that's not really what it means.

One definition I pull up quickly is "a large-scale systematic plan or arrangement for attaining some particular object or putting a particular idea into effect." Nothing inherently negative about that.

 

[MichaelB]

As someone who worked in the actuarial field for 23 years, specializing in personal auto insurance, I have to take some exception to this, especially the use of the word "scheme."

We tend to think of the word "scheme" in the pejorative, but that's not really what it means.

One definition I pull up quickly is "a large-scale systematic plan or arrangement for attaining some particular object or putting a particular idea into effect." Nothing inherently negative about that.

Thanks, Ziggy. scrabbler, choose any word you want. Approach, strategy, tactics, blueprint, process.

Health insurance is something every single person requires from before conception (needs a healthy mother) to death, without exception. The risk pool is the entire universe. This is unique to health insurance and not the case in any other type of insurance.

Large group insurance does not segment by age, it requires enrollment of the entire universe and applies one single risk assessment. Community rated Medicare does the same. This insurance is pricey but costs the same for everyone and works well.

US individual and small group health insurance is built on a model of exclusion. Prior to the ACA, it simply excluded some individuals. It still does, by selling products to some residents (groups, seniors) and not others (individuals) in the same geography.

Age based segmentation is a practice that allows insurers to define a segment that excludes most people but allows them to offer an artificially low price for one segment where they want to compete. This effectively makes their product unaffordable to the other segments, so demand is low, which is totally acceptable to the insurers. It's a design point.

All this segmentation allows the insurers to pick apart the market to select and sell where they want to, even though the need is universal. It is a destructive force. Employer large group and Medicare, which cover more than 1/2 the coutry, show that age segmentation is not needed.

 

[ShokWaveRider]

Thanks, Ziggy. scrabbler, choose any word you want. Approach, strategy, tactics, blueprint, process.

Health insurance is something every single person requires from before conception (needs a healthy mother) to death, without exception. The risk pool is the entire universe. This is unique to health insurance and not the case in any other type of insurance.

Large group insurance does not segment by age, it requires enrollment of the entire universe and applies one single risk assessment. Community rated Medicare does the same. This insurance is pricey but costs the same for everyone and works well.

US individual and small group health insurance is built on a model of exclusion. Prior to the ACA, it simply excluded some individuals. It still does, by selling products to some residents (groups, seniors) and not others (individuals) in the same geography.

Age based segmentation is a practice that allows insurers to define a segment that excludes most people but allows them to offer an artificially low price for one segment where they want to compete. This effectively makes their product unaffordable to the other segments, so demand is low, which is totally acceptable to the insurers. It's a design point.

All this segmentation allows the insurers to pick apart the market to select and sell where they want to, even though the need is universal. It is a destructive force. Employer large group and Medicare, which cover more than 1/2 the coutry, show that age segmentation is not needed.

Which brings us 360 Degrees back to where we started. It is an INSURANCE problem not a healthcare or Provider issue.

The system needs to change period. Become more patient coverage centric. Universal healthcare is the answer weather some like it or not. Who controls it is not relevant, UNIVERSAL coverage for all Citizens and LEGAL immigrants is.

 

[NW-Bound]

... Health care for younger people is outrageously expensive. It is even more so for the rest of us. That’s the primary cause of high insurance premiums...

Actually, most young people use zero health care. And that is reflected in the insurance rate.

We had our two college-age children in our pre-ACA insurance policy. When they finished school and had their own job with insurance, we dropped them from our policy. We expected a big premium reduction, but it was peanuts!

 

[scrabbler1]

Thanks, Ziggy. scrabbler, choose any word you want. Approach, strategy, tactics, blueprint, process.

Health insurance is something every single person requires from before conception (needs a healthy mother) to death, without exception. The risk pool is the entire universe. This is unique to health insurance and not the case in any other type of insurance.

Large group insurance does not segment by age, it requires enrollment of the entire universe and applies one single risk assessment. Community rated Medicare does the same. This insurance is pricey but costs the same for everyone and works well.

US individual and small group health insurance is built on a model of exclusion. Prior to the ACA, it simply excluded some individuals. It still does, by selling products to some residents (groups, seniors) and not others (individuals) in the same geography.

Age based segmentation is a practice that allows insurers to define a segment that excludes most people but allows them to offer an artificially low price for one segment where they want to compete. This effectively makes their product unaffordable to the other segments, so demand is low, which is totally acceptable to the insurers. It's a design point.

All this segmentation allows the insurers to pick apart the market to select and sell where they want to, even though the need is universal. It is a destructive force. Employer large group and Medicare, which cover more than 1/2 the coutry, show that age segmentation is not needed.

...which is why you need to have a strong individual mandate (or, a Medicare-for-all which automatically includes everyone) to get all the younger, healthier people buying insurance even if they are not big users of health care. (and they can buy it at age-discounted rates). Weakening that mandate, which is what that tax reform act did, leaves an older, sicker pol of people buying insurance which puts upward pressure on rates.

In my working days, I worked on several responses to state law changes which strengthened the mandate to buy auto insurance. I had access to a study which showed how the percentage of Uninsured Motorists went down when various measures by states were implemented. Better measures showed bigger declines in the uninsured motorists population, and that resulted in lower UM rates for all drivers.

The age rating limit of 3:1 between the young and old is actually lower than what the actuaries recommended. I recall posting here a few years ago about how a 5:1 limit was more appropriate. So even in states which did not further cap the age ratio, the younger people are subsidizing the older people. Combine that with a weak individual mandate and you end up with an older, sicker pool of people buying insurance, and at higher rates.

The individual mandate was a tradeoff for eliminating the exclusion for pre-existing condition. Allow these sicker people to buy insurance without exclusion in exchange for requiring everyone to buy insurance, balancing out the risk pool. The former remains intact, barely, while the latter has been weakened, putting more upward pressure on rates.

Allowing those near Medicare age to buy into Medicare or some other public option would put downward pressure on the remaining individual market because many of those older, sicker people would switch and leave behind a younger, healthier risk pool.

 

[MichaelB]

...which is why you need to have a strong individual mandate (or, a Medicare-for-all which automatically includes everyone) to get all the younger, healthier people buying insurance even if they are not big users of health care. (and they can buy it at age-discounted rates). Weakening that mandate, which is what that tax reform act did, leaves an older, sicker pol of people buying insurance which puts upward pressure on rates.

In my working days, I worked on several responses to state law changes which strengthened the mandate to buy auto insurance. I had access to a study which showed how the percentage of Uninsured Motorists went down when various measures by states were implemented. Better measures showed bigger declines in the uninsured motorists population, and that resulted in lower UM rates for all drivers.

The age rating limit of 3:1 between the young and old is actually lower than what the actuaries recommended. I recall posting here a few years ago about how a 5:1 limit was more appropriate. So even in states which did not further cap the age ratio, the younger people are subsidizing the older people. Combine that with a weak individual mandate and you end up with an older, sicker pool of people buying insurance, and at higher rates.

The individual mandate was a tradeoff for eliminating the exclusion for pre-existing condition. Allow these sicker people to buy insurance without exclusion in exchange for requiring everyone to buy insurance, balancing out the risk pool. The former remains intact, barely, while the latter has been weakened, putting more upward pressure on rates.

Allowing those near Medicare age to buy into Medicare or some other public option would put downward pressure on the remaining individual market because many of those older, sicker people would switch and leave behind a younger, healthier risk pool.

Scrabbler, we’re mostly in agreement.The mandate is a prerequisite for success.

Which brings us 360 Degrees back to where we started. It is an INSURANCE problem not a healthcare or Provider issue.

The system needs to change period. Become more patient coverage centric. Universal healthcare is the answer weather some like it or not. Who controls it is not relevant, UNIVERSAL coverage for all Citizens and LEGAL immigrants is.

No need to yell, you’ve said all this already in this thread. As I said in my previous posts, the underlying problem is not insurance, it is the cost of health care. Insurance exacerbates, but does not cause this. I believe universal health care coverage would not lead to lower health care costs.

I’ve said my piece and am out of the discussion.

 

[NW-Bound]

I just look at what Medicare costs, and how it is funded.

In 2018, Medicare cost $740 billion and provides coverage to 59.9 million people. That's $12,353 per covered person.

In 2018, payroll taxes cover 36%. Retirees' premium covers 15%. The rest comes from general fund.

It is a misconception that Medicare program is self-supporting via taxes collected from young workers, and premium from old people.

I was also wrong about hospital costs. It used to be as high as 70% of Medicare expenses, but is now only 40%. The growth in Medicare cost has been prescription drugs and home care coverage.


See: https://www.pgpf.org/budget-basics/medicare.

 

[ShokWaveRider]

Respectfully I disagree, having actually experienced 2 systems that do not use Insurance companies as their primary coverage. UK & Canada. Thiers do not have millions of people without, or not being able to afford HealthCare, their costs are mitigated for the most part, whether by negotiation, legislation or whatever, and their citizens do not suffer the same financial devastations as a result.

We just need to take our blinkers off and see the whole picture. I simply cannot see how universal HC would not lead to lower costs and more coverage. It has been studied many times and virtually all countries that have universal health care do in fact have cheaper costs, and cheaper drugs also. Whether one chooses to admit it or not, the US system does not work to keep the costs of HC and drugs lower no matter how much we want to try to believe that it does or will in some future Nirvana.

I do agree that universal HC should be basic and Insurance does play a part in providing "Added" coverage if desired.

 

[neihn]

...The growth in Medicare cost has been prescription drugs and home care coverage.


See: https://www.pgpf.org/budget-basics/medicare.

In the link above, it predicts the medicare spending will grow to 20% federal budget. Very likely other *care (non medicare) will also skyrocket. At this rate, the US will bankrupt soon.

There are many reasons that empires rise and fall - this could be one?

 

[NW-Bound]

Respectfully I disagree, having actually experienced 2 systems that do not use Insurance companies as their primary coverage. UK & Canada. Thiers do not have millions of people without, or not being able to afford HealthCare, their costs are mitigated for the most part, whether by negotiation, legislation or whatever, and their citizens do not suffer the same financial devastations as a result...

Perhaps universal healthcare would result in lower costs, indirectly via the government having the power to limit what the providers charge, and also not allowing patients to abuse the system. Just having the government pay everything will not result in any lower cost.

Can it work in the US? Is Medicare not a form of universal healthcare now for seniors over 65? And we are paying $12,353/year per person, as I quoted in the post above.

How does that compare to other countries? Does anyone have a number?

 

[ShokWaveRider]

Can it work in the US? Is Medicare not a form of universal healthcare now for seniors over 65? And we are paying $12,353/year per person, as I quoted in the post above.

How does that compare to other countries? Does anyone have a number?

I can tell you what a family member pays. My BIL lives in Canada, he is 80, he pays $100 per year for HC, it is like a deductible but not really. Most Drugs Cost $4 dispensing fee, some are premium drugs and need to be purchased as they do in the USA, but are much cheaper overall. He only takes BP and Cholesterol meds so $4 for each of those per filling.

His partner is 70 she pays the same $100 for HC. She takes some premium drugs, gets them from Costco Canada and pays $160 a month for them over the $4.

He had prostate cancer treatment for 6 months and did not have to pay extra for any of it. I do believe there are some things that cost extra but I do not know what they are. You can buy a supplemental for private rooms in hospitals etc. You can also go to private health care and pay if you like or do not like the wait times.

HC is paid for by Income Taxes, you can DL any Canadian Tax calculator for any province (BIL is in Ontario and covered by OHIP). Enter all your numbers, See what your "Would" pay in Canadian Taxes. Take your US Taxes + your medical costs and subtract them to see if you would pay more in Canada than the USA. Simple math, not foolproof but would give you an idea.

 

[NW-Bound]

To figure out the real cost, we need to look at what we pay as a nation, not as individuals. Some retirees may pay very little, but then it is because they are subsidized by younger workers.

And people no longer want to have children, so we cannot keep on increasing taxes on workers for them to carry the load.

The only number I found so far is that the US pays 18% of GDP for healthcare, public and private combined, in 2018. France and Germany pay 11.5% GDP in 2017.

 

[ShokWaveRider]

To figure out the real cost, we need to look at what we pay as a nation, not as individuals. Some retirees may pay very little, but then it is because they are subsidized by younger workers.

And people no longer want to have children, so we cannot keep on increasing taxes on workers for them to carry the load.

The only number I found so far is that the US pays 18% of GDP for healthcare, public and private combined, in 2018. France and Germany pay 11.5% GDP in 2017.

You can find the numbers via Google. But most are listed per capita. US By far is the most expensive. Here is one that list a few countries. While I respect your comment about % of GDP., most folk are really concerned about what they actually end up paying, I am one of them.

https://en.wikipedia.org/wiki/List_of_countries_by_total_health_expenditure_per_capita

 

[NW-Bound]

I care about what I personally pay too.

But if it is not sustainable because the cost keeps increasing while being borne by other people, it will not last.

There's a concept called "enlightened self-interest". Public policy should be set based on that, not any individual interest.

See: https://en.wikipedia.org/wiki/Enlightened_self-interest

 

[sengsational]

I wonder (stupid idea alert!) if we could ease into a solution by adding segments to Medicare. I didn't think this through, but what if the Medicare age just ratchets down over time? No harsh bump to traverse... just add people to a system that's working. I don't know what the incentives/disincentives to opting into Medicare are, and if those would work for younger people, but they apparently work for 65+, so what about 64+?

 

[NW-Bound]

The idea of expanding Medicare to the whole population has been talked about. Why limit to only older people? Voilà, universal healthcare.

Then, the question of whether that is less or more expensive than the current private insurance and also ACA for the under-65 crowd will come up.

I suspect someone has already studied that and has some numbers. I have not looked for it personally.

 

[ziggy29]

The idea of expanding Medicare to the whole population has been talked about. Why limit to only older people? Voilà, universal healthcare.

Then, the question of whether that is less or more expensive than the current private insurance and also ACA for the under-65 crowd will come up.

I suspect someone has already studied that and has some numbers. I have not looked for it personally.

An apples to apples is difficult because there are so many moving parts and side effects.

People just look at the price tag and may freak out -- possibly justified, but often they do not consider what other costs are displaced or what other social changes occur.

Employers could be more competitive with foreign businesses that are not saddled with massive health care expenses. We would see an elimination of cost-shifting from one patient to another patient or insurer, since everyone pays from the same pool. Involuntary unemployment may fall as additional barriers to retirement before 65 are eliminated (reducing some public assistance payouts).

And then there are economic ripple effects as well. There are a lot of factors that need to be considered below the headline of "what it would cost", because there are a lot of costs in the current system that would go away. Whether that would ultimately cost more or less than the current model, I can't say, but opponents of it have done a good job of preventing people from thinking about all the areas in which there would be cost savings to offset the direct cost of universal single payer.

 

[scrabbler1]

I view my annual ACA deductible as more of a cap on my share of a large, catastrophic event, such as my 12-day hospital stay 4 years ago this month. The bill was for $80k but the deductible and cap on OOP expenses from covered services limited me to about $6,400. If that cap were $7k or $8k (as it has risen to now), I'm not terribly troubled.

What I do get from my policy are the important negotiated rates on medical services and drugs. Those negotiated rates range from $50 copays on labwork and doctor visits to low rates on my expensive drug. Sometimes, the reduction from the provider-charged rate is paid by my insurance, sometimes it is simply a write-down from the original rate.

Taken together, my OOP expenses are rather low, between $700 and $1,000 per year, far less than my annual deductible. This brings some level of certainty to my expenses, while offering me some protection against "The Big One" like what happened to me 4 years ago.

I have a decent selection of doctors from my area, the rather densely populated area of Long Island, NY. I have had some of my doctors dropped from the network in the last few years, but not the core 3 specialists I see frequently since my hospital visit 4 years ago. There were some close calls, with some uncertainty about them remaining in the network from year to year. Other doctors for non-recurring ailments have gotten dropped, as has my PCP I rarely see because I see the core 3 specialists.

I realize that not everyone shares my situation, so YMMV.