Large companies weigh cost of dropping employee health benefits

[Gone4Good]

There would be no price discrimination,

What about subsidies for low income people?

 

[Gone4Good]

Three cheers for dgoldenz! A serious response to Gone4Goods's challenge.

But think about what he's saying . . .

1) Guaranteed issue
2) No discrimination for pre-existing conditions
3) No / restricted price discrimination
4) Subsidies for low income people?

This is basically the plan we have that people have equated with all kinds of atrocities.

The differences are actually kind of small. Instead of an individual mandate he has a 24 month exception for PEC, which doesn't apply to most people. I don't think that will be strong enough, but it's worth a try and could be amended later if needs be. The addition of mandatory deductibles is a good addition to the current legislation and one of the positive changes we could have seen introduced in a real bi-partisan bill.

But the nuts and bolts of what dgoldenz is proposing is Obamacare.

So the "serious alternative" to "Obamacare" is to adopt 90+% of Obamacare and tweak it around the edges? That's not the debate I was hearing last year. I'm all for it. But call a spade a spade and stop pretending that there is some radically different proposal out there that is far superior to the legislation we have.

 

[Gone4Good]

Easy. We can eliminate underwriting by ensuring that ALL folks, including the young and healthy, are in the pool. Even insurers have gone on the record as accepting this, but *everyone* into the pool is needed or else it blows up with adverse selection.

How do we do that? For one thing, the penalties need to be stronger.

Agreed.

But, again, what you describe is basically the legislation we have. Your suggested change is to make Obamacare even more intrusive and stronger than it already is. I think you are right. But this isn't an argument to reverse course. It is an argument to hit the accelerator in the direction that the current legislation already takes us.

 

[ziggy29]

So the "serious alternative" to "Obamacare" is to adopt 90+% of Obamacare and tweak it around the edges? That's not the debate I was hearing last year. I'm all for it. But call a spade a spade and stop pretending that there is some radically different proposal out there that is far superior to the legislation we have.

Many people have had fairly widespread agreement on the "goals" of health care reform (i.e. eliminate underwriting, get everyone into the pool, put a lid on double-digit cost increases, for example).

The bulk of the disagreement is in how we get there. We may both agree that we want to get from Los Angeles to Boston, but we may disagree strongly on the best route to use to arrive at the destination.

But the 800 pound gorilla that Obamacare does not really address is cost control. This is why I think we're solving this backwards. First work on cost control, *then* maybe we can create sustainable health care reform. Until we can get control of costs (ideally without rationing), any reform is possibly doomed to fail because of unsustainable cost increases.

And I think the way they phase out individual health insurance subsidies (and the income range where it phases out) effectively amounts to an utterly massive middle class tax increase that I find strongly objectionable. The funding mechanism is part of the "how we get there" which many people can disagree on.

 

[Gone4Good]

But the 800 pound gorilla that Obamacare does not really address is cost control.

So what is the policy that keeps all of the things you like and also controls costs? (be careful because many of them are likely to be in the bill)

And how do you avoid phasing out subsidies. There are only two ways I can see. 1) Subsidize everyone. 2) Subsidize no one. Which do you prefer?

 

[dex]

Not so fast:

"Fast" or "Not so fast." are our only choices for the future.

 

[ziggy29]

So what is the policy that keeps all of the things you like and also controls costs? (be careful because many of them are likely to be in the bill)

No first-dollar coverage except for preventive care (and perhaps those below the poverty level).

Stronger penalties for being uninsured so there can be no financial advantage for not buying at least the cheapest available (highest deductible) coverage.

Breaking the link between employment and health insurance so people can buy the coverage most suited for them. (If anything I think Obamacare *strengthens* the link by writing employer responsibilities/penalties into law.)

And how do you avoid phasing out subsidies. There are only two ways I can see. 1) Subsidize everyone. 2) Subsidize no one. Which do you prefer?

Obviously I don't want to subsidize Warren Buffett. But the way the subsidy is phased out means that from about $40-80K, those who buy individual insurance lose more than 15 cents in subsidy for every dollar earned in that income range. It may not be a 15% tax technically, but it has the same financial effect.

This puts the "effective" marginal loss of income to taxes and subsidies higher for someone earning $60K than someone earning $60M. I would think you of all people here would find that strongly objectionable.

 

[IndependentlyPoor]

Thanks. I don't think we'll ever be able to solve the ER problem unless the government goes the non-politically-correct route and tells hospitals to turn people away. People who don't buy insurance will always abuse this law.

It is a lot worse than just politically-incorrect. If health care providers were allowed to refuse emergency service to the uninsured, it would effectively kill-off ambulance service (or drive it into being a purely government service). No EMS provider could risk dispatching a unit to an accident only to find that the injured were poor and uninsured.

It is ironic that we, as a polity, see no problem with mandating that health care providers must care for those who cannot pay, but recoil at the idea of mandated universal coverage.

 

[MichaelB]

I don’t see how costs can be controlled. Insurance companies have become intermediaries and have an unlimited profit motive. This conflicts with providers and patients alike. Providers are spending immense amounts in demand generation. The health care industry promises a degree of diagnostic and treatment certainty that cannot be met by any individual provider but leads to endless testing.

Cost containment demands guaranteed payment as a prerequisite. This is now mostly, but not entirely, covered. Not yet resolved, but at least the main cause of cost shifting has been dealt with. This will limit some of the exploitation and arbitrage going on now and allow for a more systematic approach to cost management.

 

[IndependentlyPoor]

But call a spade a spade and stop pretending that there is some radically different proposal out there that is far superior to the legislation we have.

OK. I am feeling mischievous today.
I posted a version of this somewhat radical idea last fall, and as I recall, it was met with stony silence.

Four simple rules to fix the healthcare system.

1. Prohibit exclusions for preexisting conditions.
2. Mandate universal minimum coverage (with subsidies for the truly poor).
3. Insurers may offer any policy features they wish above a required minimum set, and may set any price they wish for this optional coverage, but the prices charged must be the same for everybody.
4. Policies may be canceled only for non-payment or other breach of contract, not because the client was seriously injured or contracted an expensive disease.
​

Essentially, such regulations would just create one giant group comprising everybody in the country. Insurers would compete to sell policies to the members of this group just like it sells policies to employee groups. Want to raise the rates? Fine, but you have to raise them equally for everybody. Want to change the rules on say, deductibles? No problem, but the changes apply to everybody. There would still be plenty of room to compete. Insurance companies are competing just fine with their employer based group policies now and they have similar restrictions on raising rates. Why not just extend the existing model? Indeed, the precedent for required minimum insurance already exists in our auto liability policies.

So here is another straw man. Commence firing.

 

[Texas Proud]

You pay, up to your deductible. I think you are confusing co-payments with co-insurance.

Co-payment = fixed cost for service, like a doctor's office visit being $20 or ER visit being $100
Co-insurance = percent you pay after the chosen deductible

OK, this might have been answered already, but I have only gotten to your response...

I do not think co-pays are that big a deal when it comes to utiliztion of services. Almost every time we have gone to the doctor in the last few years the actual costs after the insurance discount is only a few dollars more than my co-pay... (mine are $30 for normal doc and $50 for specialist)...

Most of the time the various tests are not covered by the co-pay.. so I pay there..


The one thing that I think needs to happen more is preventive care... that would probably save more money than anything else (well, except if we stopped being a fat nation etc. etc.... ) ...

I can go either way with this though....

 

[jIMOh]

Surprise. There will be some unintended consequences and higher costs to employers and employees.

We need some more help from our gvmt. Just like they helped us with credit cards.

- Stay tuned for energy policy and imiigration reform.

+1

 

[jIMOh]

I don’t see how costs can be controlled. Insurance companies have become intermediaries and have an unlimited profit motive. This conflicts with providers and patients alike. Providers are spending immense amounts in demand generation. The health care industry promises a degree of diagnostic and treatment certainty that cannot be met by any individual provider but leads to endless testing.

Cost containment demands guaranteed payment as a prerequisite. This is now mostly, but not entirely, covered. Not yet resolved, but at least the main cause of cost shifting has been dealt with. This will limit some of the exploitation and arbitrage going on now and allow for a more systematic approach to cost management.

+1

 

[dex]

I do not think co-pays are that big a deal when it comes to utiliztion of services. Almost every time we have gone to the doctor in the last few years the actual costs after the insurance discount is only a few dollars more than my co-pay... (mine are $30 for normal doc and $50 for specialist)..

When cost-cutting backfires | Harvard Gazette Online
Though the copayment increases were counterproductive for elderly patients with a chronic disease like diabetes or hypertension, the study showed that copayments worked as desired for those not chronically ill. Those patients reduced office visits and prescription drug utilization with no negative effects on their health.

 

[MichaelB]

When cost-cutting backfires | Harvard Gazette Online
Though the copayment increases were counterproductive for elderly patients with a chronic disease like diabetes or hypertension, the study showed that copayments worked as desired for those not chronically ill. Those patients reduced office visits and prescription drug utilization with no negative effects on their health.

I agree that copays are an absolute requirement. Research I've seen in other areas show less overall usage and higher levels of satisfaction when people pay something rather than nothing per activity.

 

[jIMOh]

"Fast" or "Not so fast." are our only choices for the future.

I've always said I have two speeds

Fast
and

half fast


LOL

 

[Texas Proud]

When cost-cutting backfires | Harvard Gazette Online
Though the copayment increases were counterproductive for elderly patients with a chronic disease like diabetes or hypertension, the study showed that copayments worked as desired for those not chronically ill. Those patients reduced office visits and prescription drug utilization with no negative effects on their health.

Thanks for the link... what I did not see is what the copays were before and after... where is the 'sweet spot'?

I can say that if copays were raised to say $75, I would not have gone to the doctor any more or any less.. nor my family...

But I can see where this would change the behavior of many... so, this does seem like a cost cutting way to go... with an exception for 'cronic illnesses' where you might have to pay one copay a month or whatever...

 

[Texas Proud]

BTW. I might as well respond to the OP...

I think that there are going to be a number of companies dropping their health care insurance...


And another comment... and someone from the UK now might be able to shed some light on what has happened since I was there....

Private insurance provided by companies were the big thing that was happening in the UK in 2000... yes, PRIVATE INSURANCE... it was becoming a perk to not have to deal with the national health system...

When I was there... I had seasonal allergies... and was trying to get to a doctor to get a prescription... I found out that I could have a doctor come to my house and check me out... for a fee... I decided not to... then to my surprise... I went to the drug store and found all the drugs I needed without prescriptions!!! What a concept... sell drugs that are not that dangerous to people without them having to go to the doc just to get the script... saved me a lot of money...

 

[Zathras]

Also to the point of the original post:
Small companies have been doing this for years.
As for the rest of the thread, kudos for people offering suggestions on improvements instead of just throwing stones.
I concur with many of you when it is said that cost controls is one of the most important things in any cost care bill. It will help with stop (or at least slow down) both the large and small companies from dropping health care.

 

[FinanceDude]

I agree that copays are an absolute requirement. Research I've seen in other areas show less overall usage and higher levels of satisfaction when people pay something rather than nothing per activity.

I think if deductibles are copays are high enough, health care consumers can demand transparency in cost structures. One hospital in the area charges $2500, while a new MRI clinic in town boats $699 MRI's. Hard to justify why one is almost 4 times the other..........

 

[dex]

I concur with many of you when it is said that cost controls is one of the most important things in any cost care bill..

How do you control the costs?

 

[jIMOh]

Also to the point of the original post:
Small companies have been doing this for years.
As for the rest of the thread, kudos for people offering suggestions on improvements instead of just throwing stones.
I concur with many of you when it is said that cost controls is one of the most important things in any cost care bill. It will help with stop (or at least slow down) both the large and small companies from dropping health care.

I was in a debate on another board a while back and was waiting for others to hijack this one before I started my [-]rant[/-] [-]opinions[/-] facts.


There are 3 main problems with health care

1) costs spiraling out of control
2) availability to everyone (almost everyone?)
3) everyone wants health care and no one wants to pay for [-]all of it[/-], [-]most of it[/-], any of it.

I have yet to see a compelling case made for if it is available to everyone, then the other 2 dominos fall easier or are improved.

The reverse thesis might have some free market principles applied- if you force people to pay for what they receive, its possible free market prices insurance to where people can pay for it. There would be some suffering by people which need it and could not pay (is this bad?).

The other reverse thesis also has merit- control costs and its possible people can afford it.

But I still don't think giving everyone insurance fixes anything, and I believe it will make problems worse.

a) companies will stop offering insurance (because it saves them money)
b) doctors will have less time with patients (because more patients can now afford healthcare they were not getting before)
**this may lead to lots of other problems (waiting lists, lower quality of care) IMO**
c) creates more levels of insurance than we already have
**IMO the insurance industry is causing more problems than solutions in today's current system**


So you want a solution?

Try this...
A level playing field with a patients bill of rights. This is all patient centric. Add rights as I leave them off...

1) you cannot be denied treatment or coverage with a pre-existing condition
2) any health care provider must be 100% up front with fees (either on web site, in office or something similar)
3) all people using the same healthcare provider pay the same price regardless of insurance or not, and regardless of which insurance carrier they have

2) and 3) are my big ones, and I think these both fix lots of things. First, my employer paid for coverage now costs my employer less, because medicare and medicaid are required to pay equal amounts as my insurance carrier for the same procedure.

Second, If this bankrupts medicaid, then fix that program and that funding. The average family of 4 spends $2500 in premiums and co-pays each year to cover the medicare and medicaid lack of pay to health care providers. I can link to study, but need to go to another site to find it.

Third, level playing field means price competition, and that should drive prices down (eventually).

Fourth- overhead for any health insurance company goes down and any doctor's office goes down- there is less negotiation for the cost of coverage after the treatment is given, so the people which do this for a living need to find new jobs and the companies they work for have now spent less money.

 

[MichaelB]

I think if deductibles are copays are high enough, health care consumers can demand transparency in cost structures. One hospital in the area charges $2500, while a new MRI clinic in town boats $699 MRI's. Hard to justify why one is almost 4 times the other..........

Agree

 

[ziggy29]

I think if deductibles are copays are high enough, health care consumers can demand transparency in cost structures. One hospital in the area charges $2500, while a new MRI clinic in town boats $699 MRI's. Hard to justify why one is almost 4 times the other..........

Historically "insurance paid it" so we didn't care about the price. With the combination of higher deductibles and transparency in pricing, that would help the cost control issue.

 

[MichaelB]

Try this...
A level playing field with a patients bill of rights. This is all patient centric. Add rights as I leave them off...

1) you cannot be denied treatment or coverage with a pre-existing condition
2) any health care provider must be 100% up front with fees (either on web site, in office or something similar)
3) all people using the same healthcare provider pay the same price regardless of insurance or not, and regardless of which insurance carrier they have

2) and 3) are my big ones, and I think these both fix lots of things. First, my employer paid for coverage now costs my employer less, because medicare and medicaid are required to pay equal amounts as my insurance carrier for the same procedure.

Second, If this bankrupts medicaid, then fix that program and that funding. The average family of 4 spends $2500 in premiums and co-pays each year to cover the medicare and medicaid lack of pay to health care providers. I can link to study, but need to go to another site to find it.

Third, level playing field means price competition, and that should drive prices down (eventually).

Fourth- overhead for any health insurance company goes down and any doctor's office goes down- there is less negotiation for the cost of coverage after the treatment is given, so the people which do this for a living need to find new jobs and the companies they work for have now spent less money.

These are all reasonable.

I have yet to see a compelling case made for if it is available to everyone, then the other 2 dominos fall easier or are improved.

If everyone is not insured the other problems cannot be fixed. So much cost shifting is going on due to mandatory treatment regardless of payment capability that it becomes impossible to identify and deal with abusive pricing and exploitation. Guaranteeing payment doesn’t fix the problems but it enables other measures.

Historically "insurance paid it" so we didn't care about the price. With the combination of higher deductibles and transparency in pricing, that would help the cost control issue.

It would probably help deal with "use control", an important component of cost control.