The Health Insurers have already won

[Martha]

I don't see many details in that proposal. That is where the problem lies, the details.

Yup.

 

[donheff]

I want Charles Rangel to decide.

Ha

I prefer the guy working for the insurance company who gets paid for performance (i.e. his bonuses are based on how many claims he successfully denies).

 

[Martha]

The fact that Medicare is a govt program and tens of millions of citizens are already enrolled is ofter thrown out in these discussions. Well, let's apply the Medicare example to the question of coverage and who is allowed to have what. If the new govt health plan covers the same procedures, treatments and drugs as Medicare today and the rules are determined in the same way, does that sound good to you? Or are you saying the future plan needs to be more restrictive than Medicare with more limitations applying to certain people in certain situations?

If you are getting at denying a treatment to someone just because they are old, I don't favor that at all. That said, I can imagine a situation where someone might feel like they are not getting something they want paid for when in fact it makes no sense to have the treatment. But this is more of an education issue than a coverage issue.

 

[mews]

Not true mew. Apparently you have this idea that the eimployer-linked coverage is the god-given model........

But WE don't. Not by any means.

Let me be more precise - the larger "We" -You know - "We the People" -

"We the people on this board" are a very small, self-selected minority. To generalize from what we know, to 'everybody knows' - there is that phrase about the word 'assume'

ta,
mew

(Where did you get the idea that I had that idea about the idea of health care -)

 

[youbet]

If you are getting at denying a treatment to someone just because they are old, I don't favor that at all. That said, I can imagine a situation where someone might feel like they are not getting something they want paid for when in fact it makes no sense to have the treatment. But this is more of an education issue than a coverage issue.

Ahhhh..... Noooo....... Not getting at anything other than exactly what I said. And specifically NOT the issue of "denying a treatment just because they are old."

We were discussing limitations on what coverage and for who a new nationalized health plan should have. Trying to get away from generalized examples, I simply asked if you would be comfortable with the same limitations on what and who that Medicare has today. Just trying to get a handle on where you stand today beyond the examples. You seem to be saying that you'd be for more limitations.

 

[youbet]

(Where did you get the idea that I had that idea about the idea of health care -)

I thought you included yourself in "WE." Otherwise, you would have said "They." But if in this case when you said "We" you meant those other folks, well OK, I didn't know. I thought you meant "Us." Errrrrrr..... Crap, I don't know. Just exclude me from whatever it was you said that "We" were doing or thinking.

 

[Martha]

Ahhhh..... Noooo....... Not getting at anything other than exactly what I said. And specifically NOT the issue of "denying a treatment just because they are old."

We were discussing limitations on what coverage and for who a new nationalized health plan should have. Trying to get away from generalized examples, I simply asked if you would be comfortable with the same limitations on what and who that Medicare has today. Just trying to get a handle on where you stand today beyond the examples. You seem to be saying that you'd be for more limitations.

I did float off track with the idea of "restrictions" and what might not be covered, whether under Medicare or any other plan. I wasn't paying enough attention to your specific comment. You previously said:

If the new govt health plan covers the same procedures, treatments and drugs as Medicare today and the rules are determined in the same way, does that sound good to you? Or are you saying the future plan needs to be more restrictive than Medicare with more limitations applying to certain people in certain situations?

I have said that I favor Medicare for all. People would buy the supplements and poor people could have the cost subsidized. Ditch the poor stepsister Medicaid. Work on the drug coverage provisions and allow the government to negotiate with drug companies. Etc. I don't want a plan more restrictive than Medicare. I want one that is better. I know that better is a process of experimentation. But let's get on with it. And it isn't all just what kind of reimbursement system we end up with. I want us to develop health care attitudes that work to overcome weaknesses in our current health care sector. How is research funded? Is our patent system making drugs overly expensive and delaying generics? How can we encourage best and safe practices? Why are medical tests so expensive? What are all the things that have been driving inflation in cost? Why are people treated different in different parts of the country? How can we strengthen primary care? Why did the NIH fund bizarre alternative medicine studies but took years to fund a study comparing different diets? What are our biggest public health problems and how can we address them?

This is not one bill for health care reform. It is an attitude on how to address the many issues in a smart and sound way. It is about rewarding the right things.

As I have said before, some areas of our country have substantially higher medical costs but with no better outcomes than other areas with similar demographics. We can use that information to improve. For example, it looks like some people in some areas might be getting tests and maybe even treatments they don't need, or they are not getting cheaper alternatives that work as well. At the very least, these are issues to study and learn from, whether the reimbursement comes from Medicare or comes from a private insurance company.

 

[Gone4Good]

If the new govt health plan covers the same procedures, treatments and drugs as Medicare today and the rules are determined in the same way, does that sound good to you?

The only difference I can tell between my health care and what my parents get through Medicare is that they pay less, don't have to worry about pre-existing conditions, and can travel anywhere in the country without fear of losing coverage.

 

[Gone4Good]

I prefer the guy working for the insurance company who gets paid for performance (i.e. his bonuses are based on how many claims he successfully denies).

Heh-heh-heh-heh. Pretty good point.

The way incentives are set, good old Charlie Rangle has an incentive to make sure his voters get all the health care they possibly want or need. Meanwhile, Mr. Insurance Executive has an incentive to make sure premiums are maximized relative to benefits paid.

Neither incentive structure is good for the country. But as an individual, I'll choose Mr. Rangle over Mr. Insurance Executive any day of the week.

 

[youbet]

The only difference I can tell between my health care and what my parents get through Medicare is that they pay less, don't have to worry about pre-existing conditions, and can travel anywhere in the country without fear of losing coverage.

I think it's hard to calculate what Medicare costs an individual. Oh, the premiums you pay after you're 65 and actually enrolled are easy enough to jot down. But what about the hypothetical value of the lifetime of payroll taxes you kicked in for Medicare? You'd have to assume that amount taken from each paycheck and dollar cost averaged into an excellent performing fund (over the decades) amounting to some value when you're 65. Then amortize that amount over your life expectancy. Or some method like that........

I'm not knocking Medicare. Just saying that for folks, like our parents, who got to start Medicare without many years of pre-coverage (pre-65) payments, Medicare is a bargain. For younger folks who pay in all their working lives before starting to collect, it's not quite the same "blue light special."

So, I agree with your statementn regarding our parents. But, less so for ourselves and our kids.

 

[youbet]

The way incentives are set, good old Charlie Rangle has an incentive to make sure his voters get all the health care they possibly want or need. .

Mr. Rangle also had huge incentives to make sure he was not involved in scandal or other integrity compromising situations.......

 

[haha]

.
So, I agree with your statementn regarding our parents. But, less so for ourselves and our kids.

Well, I am not much older than you but so far at least, I think Medicare and a good Medigap are the cat's bottom for medical coverage. I'm like Martha, I don't want a lot of airy-fairy things covered. If I want Rolfing (which I do as soon as my ribs heal from a fall) I will pay for it. But when I need to go to a doctor for a medical problem it is seamless. I go to my GP or not. If I know the right specialist to see I go see him. I never see a bill unless there is some relatively small balance or non-Medicare eligible charge that eventually finds its way to me. My drug coverage is mediocre, but my doc mostly rxs generics and I have no problem with that.

It is not knock-me-down cheap; I pay about $400/month in premiums alone, almost half to Medicare itself.

Couples with plans of living on $25,000/yr might want to give this some thought. Even after attaining Medicare age your medical insurance premiums will be in the neighborhood of $10,000 /yr.

If I truly hate any changes that come down from Obama I will investigate emigration.

Ha

 

[youbet]

I have said that I favor Medicare for all.

If that's what happens, I'd be OK with that too. Of course, I'm emphasizing the "for all" part since I think it would be essential that our esteemed politicians have the exact plan we do so they feel some buy-in towards running it well. And other groups such as the rich, union members who have negotiated cadillac health plans, govt workers and so on and so forth would ALL have to be swept into the plan.

I'll be on Medicare in less than 3 yrs, so the Medicare for all idea wouldn't be much of a change for us.

 

[youbet]

It is not knock-me-down cheap; I pay about $400/month in premiums alone, almost half to Medicare itself.

Couples with plans of living on $25,000/yr might want to give this some thought. Even after attaining Medicare age your medical insurance premiums will be in the neighborhood of $10,000 /yr.

Those are good points/reminders Ha. And, in fact, my budget planning for our post-65 yrs includes $10k/yr for Medicare and Medicare supplemental policy premiums. It's not the "free" coverage that some folks assume.

And, as mentioned earlier, to know the real cost you'd have to do some fancy calculating to determine the present value of all those payroll deductions you kicked in over the decades........

Still, I'm delighted that Medicare is there for DW and I as we approach eligibility age. We should be able to afford the premiums without too much pain and it seems to be decent coverage. I just hope that the changes to all medical coverage bound to take place over the next few years don't screw it up for us at the last minute........

 

[Martha]

f

I don't see many details in that proposal. That is where the problem lies, the details.

I am finally reading the Baucus bill (223 pages) and amendments. They clearly educated themselves on a number of issues. They are not as stupid as I thought. I doubt that I will be able to post an adequate summary.

One thing that I am noticing off the bat is the juxtaposition of state and federal oversight. It looks like the feds set certain minimal plan and rating standards but the states regulate for consumer protection issues. For ERD's benefit, state compacts are allowed that permit interstate sales of insurance. Most of the regulation will fall to the originating state, some to the state where the insured resides.

Even though people talk about health insurance reform, such as the exchanges, not really starting until 2013 or 2014, there are a number of immediate interim provisions.

Some points:

Different types of plans could be purchased, included a "young invincible" plan that is catatrophic coverage only. HSA plans look like they will continue. I am concerned how this is going to effect cost of other plans with more comprehensive benefits. My concern in general with health care reform is how to get past adverse selection issues, unstable markets, and how do we keep cost affordable.

There will be payable in advance premium tax credits, based (fortunately for us ERs) on adjusted gross income plus tax exempt income (bummer on my tax exempt bond interest). There is an amendment to put a 35% limit on itemized deductions.

There are tax credits for those who make less than 300 or 400 percent of federal poverty line income. In that discussion the statement "Liability for premiums would be capped at 13 percent of income for the purchase of a silver plan" is made. I cannot tell for sure if that cap applies to everyone.

Initial verification of citizenship will be done by matching date of birth and SSN with the SSA.

I haven't quite figured out the cost sharing/maximum out of pocket provisions. However, there are only subsidies on cost sharing for those very close to the federal poverty level. The bill does not have other maximum out of pocket limits, but I believe that some amendments offered do propose limits. The Rockefeller amendment proposes 12.5% of AGI for maximum out of pocket each year. AGI has a 35% cap on itemized deductions.

The excise tax for failing to purchase insurance is variable and depends on your income. No excise tax if the premium for the lowest cost option for you exceeds 10% of AGI or if your income is below the FPL.

Some money is appropriated so non-profit cooperatives can be established in a state. No requirement for any one to be established. I know that many amendments have been proposed relating to these provisions and "public option" provisions, with the public option not passing after a couple of tries.

There are various transparency requirements.

I skipped the employer provisions for today. Most relate to the small employer market, little if any to large employers.

There are large number of provisions relating to Medicaid. It starts off by saying that very poor adults who are not disabled could be covered, but it doesn't look like they have to be covered until 2014. I am a bit unclear on this as I only skimmed the Medicaid provisions. At least one amendment proposes to eliminate this provision.

There are issues regarding whether otherwise Medicaid eligible individuals have to accept crappy employer coverage without "wrap around" of medicaid benefits into that coverge. (The Walmart Problem). Amendments have been offered on that issue.


I haven't read all the bill or all of the amendments yet so I may update this later. For example, one amendment allows buying into medicare at age 55. No details--I have to look at yet another bill to figure it out. I am not going to bother unless the amendment passes.

Interesting and disturbing fact: 31% of children in the US are currently covered by Medicaid or CHIP.

 

[Gone4Good]

The Rockefeller amendment proposes 12.5% of AGI for maximum out of pocket each year.

Thanks for a great summary!

This part about capping payments at ~13% of AGI sounds great, but I have a hard timing seeing how it can be done. The median family income in the US is about $50K (AGI is lower) meaning that the median health care spending would be capped at less than $6,250 per family. Meanwhile we spend $4,200 per person on health care as a nation. I guess the balance is paid for in new taxes? Seems like a pretty big gap to fill.

 

[Martha]

Thanks for a great summary!

This part about capping payments at ~13% of AGI sounds great, but I have a hard timing seeing how it can be done. The median family income in the US is about $50K (AGI is lower) meaning that the median health care spending would be capped at less than $6,250 per family. Meanwhile we spend $4,200 per person on health care as a nation. I guess the balance is paid for in new taxes? Seems like a pretty big gap to fill.

Two different caps: one on maximum out of pocket and the other on premiums. These are separate. So, you could end up spending 13% of your income on premiums and another 12.5% to hit the maximum out of pocket if you had a bad year. At least under one scenario.

 

[Gone4Good]

Two different caps: one on maximum out of pocket and the other on premiums. These are separate. So, you could end up spending 13% of your income on premiums and another 12.5% to hit the maximum out of pocket if you had a bad year. At least under one scenario.

Gotcha.

I'd be very happy with those caps.

Any idea how that would work, administratively? Is the government setting price caps on private insurance? And because its based on AGI, it would be a different cap for every individual.

 

[Martha]

I made it through a lot more of the amendments and through most of the bill. Too many amendments to get a feel for where the finance committee bill could end up and I haven't figured out the status of most amendments. The bill as it is needs work as reflected in some of the amendments, but it is far from being horrible as some on both sides have intimated. There are many many amendments that are ideological and don't have supporting information as to why it is the right thing to do. (WTF? Amendments having to do with Acorn?!!!)

So we wait while they work and they posture. I may read the Senate Health Committee bill next to see how different they are. Reconciliation will be interesting (to be Minnesota about it) between the Senate bills and when they are done, if ever, with the House.

Reading bills that are in process is kind of pointless, but at least it helps me to get past all the posturing and rumor which is what seems to end up in the press. And it can help me if I want to write more letters to senators and reps regarding reform--better to be specific as to a provision in a bill or an amendment.

 

[ziggy29]

The problem with the tendency to means test everything and the "percentage of AGI" thing is that when they do it enough, it removes the incentive to keep working hard and paying taxes any more than you absolutely need to. Do it enough and you run the risk of turning ants into grasshoppers.

I agree that lower income people won't be able to pay the "full freight" on their health care. But if we go to the means testing well too many times, we run the risk of encouraging people to stop working and reduce their means -- becoming a tax consumer rather than a tax payer. I know I have my eye on that and it is likely to cause me to FIRE on a lower income sooner rather than later if it continues.

 

[Martha]

I am not too worried about the moral hazard argument. People like to work and like to make money. I see all the guys I used to work with, many have more money than I do. But they don't ER.

I do see other issues with tying maximum out of pocket and maximum premiums to income. It makes good sense on the subsidy end, which is run through the income tax system not by health insurers. But it is not the best tool for controlling cost and very awkward as a tool to limit maximum premiums and maximum out of pocket. I can't see how it could work with the way ratings are set up under the Finance Committee bill. We will have to see how this develops.

One thing I forgot to mention. Even though underwriting for health conditions is not allowed, insurance companies will be able to charge more based on age and IIRC, geographical area.

 

[Texas Proud]

The problem with the tendency to means test everything and the "percentage of AGI" thing is that when they do it enough, it removes the incentive to keep working hard and paying taxes any more than you absolutely need to. Do it enough and you run the risk of turning ants into grasshoppers.

I agree that lower income people won't be able to pay the "full freight" on their health care. But if we go to the means testing well too many times, we run the risk of encouraging people to stop working and reduce their means -- becoming a tax consumer rather than a tax payer. I know I have my eye on that and it is likely to cause me to FIRE on a lower income sooner rather than later if it continues.

Yes.... back when welfare was a lot more... there were some people who my mother taught who actually got more money (or benefits as some was free or reduced rent) from the government than she did as a new teacher... (she only started to teach when she was almost 50).. surprise, surprise when they had more babies to get more money...

The worst I heard about from her was a lady who had 5 children from 5 different men... and was never married... she taught all of them...

 

[ziggy29]

I am not too worried about the moral hazard argument. People like to work and like to make money. I see all the guys I used to work with, many have more money than I do. But they don't ER.

I don't know if I'm a statistical outlier, but I tend to look at what I call the "incremental value of w*rk." Simply put, when working hard and paying taxes doesn't produce enough of a lifestyle boost over working minimally (if at all), paying almost no tax and letting the government subsidize my needs, I'm going to get off the hamster wheel and start consuming tax dollars instead of being a net tax payer. We're not there yet, but the winds seem to be blowing in that direction.

I don't like being that way, but at some point if they continue to do it enough with higher income taxes, more payroll taxes and more means-tested goodies, I'm a schmuck if I keep working. Of course, it helps to have the FIRE mindset (and no debt) to even make this an option. People who spend, spend, spend and have a crushing debt load may not have that option.

 

[Martha]

Texas, I recall research that found that the average number of children in a family on welfare was two. I also remember research that showed that women on welfare in states that were more generous with benefits did not have more children than in the more stingy states.


If you want to talk about incentives, right now in most states you cannot get medicaid as a person without young children or who is not disabled no matter how poor you are. I know some young women who did not get any medical care for serious problems until they had a baby. Although I have never heard of anyone having a baby to get health care, that is the current incentive.

 

[Martha]

I don't know if I'm a statistical outlier, but I tend to look at what I call the "incremental value of w*rk." Simply put, when working hard and paying taxes doesn't produce enough of a lifestyle boost over working minimally (if at all), paying almost no tax and letting the government subsidize my needs, I'm going to get off the hamster wheel and start consuming tax dollars instead of being a net tax payer. We're not there yet, but the winds seem to be blowing in that direction.

I don't like being that way, but at some point if they continue to do it enough with higher income taxes, more payroll taxes and more means-tested goodies, I'm a schmuck if I keep working. Of course, it helps to have the FIRE mindset (and no debt) to even make this an option. People who spend, spend, spend and have a crushing debt load may not have that option.

I think that the people on this board are statistical outliers.