Who really robbed the middle class? Health Care

[GrayHare]

To answer the question: unions. By interfering with the free market, they brought inefficiencies, forced unsustainable benefits like universal health insurance, and made overseas labor more attractive thus chasing jobs.

 

[REWahoo]

To answer the question: unions. By interfering with the free market, they brought inefficiencies, forced unsustainable benefits like universal health insurance, and made overseas labor more attractive thus chasing jobs.

I smell bacon...

 

[TromboneAl]

But let's honest: anyone want to go back to 1970s medicine?

I see no reason to couple the quality of the technology with the payment/insurance system. They are independent. Yes MRIs are expensive, but IIRC in the good old days, if you wanted to see if you were pregnant you had to kill an actual rabbit. Today you get a stick for a few bucks at Kmart.

IOW I do think many would like to go back to the insurance system of the 1970s or the 1950s. The one with fewer, cheaper liability issues.

 

[HFWR]

To answer the question: unions. By interfering with the free market, they brought inefficiencies, forced unsustainable benefits like universal health insurance, and made overseas labor more attractive thus chasing jobs.

Mmmm, bacon!

No particular love for unions, but it's more complicated, IMHO.

It's true that folks in this country wanting more money than peasant/slave labor in other countries are at a disadvantage, as are companies who are expected to provide worker safety, and minimal environmental standards. Not sure how we solve that dilemma...

 

[ziggy29]

To answer the question: unions. By interfering with the free market, they brought inefficiencies, forced unsustainable benefits like universal health insurance, and made overseas labor more attractive thus chasing jobs.

I would take this in another direction besides union-bashing: Other countries have unions, but they don't have a situation where all of your health insurance is expected to come from your employer. I would submit that this unfortunate expectation that health insurance comes from employers is a bigger problem than unions here. If the U.S. didn't have this unique and dysfunctional model of tying health insurance to full-time employment, the unions wouldn't need to demand it from employers, would they? For that reason, U.S. unions are even at a competitive disadvantage to unions in other countries where the cost of employer-provided health insurance isn't a huge additional burden to the employer that grows by 10% a year or more.

So the real problem here: Sever the link between health insurance and employment once and for all. This is really hurting our global competitiveness *and* the prosperity of our middle class, for union and non-union shops alike.

 

[MichaelB]

So the real problem here: Sever the link between health insurance and employment once and for all. This is really hurting our global competitiveness *and* the prosperity of our middle class, for union and non-union shops alike.

+1

 

[GrayHare]

I recall upon starting my first full-time job being surprised it offered health insurance. IMO insurance works best to spread risk on unlikely events; trouble begins when insuring something virtually everyone will need, like health care.

I don't know which group was the first to obtain a discount on health insurance simply by nature of being a group. My understanding is the Group Discount had been the initial justification for health insurance as a job benefit.

 

[eytonxav]

I've felt that a lot of large mega corps with huge employee bases do a lousy job of leveraging their volumes for group rates. It is really much easier for them to simply pass on increased costs to employees vs battling the healthcare providers/drug companies to lower costs.

Also, the other area the I find annoying is the so called family plans that have the same price tags regardless of how many kids you. That just seems fundamentally unfair to me.

 

[ziggy29]

No, today's medicine is amazing and I don't want to go back to 1970's medicine - but what good is is today's medicine if we can't afford it and it bankrupts us?

I think the unfortunate reality is that we will need to draw lines somewhere (like the expensive cancer treatment that has been passed on by the UK).

This is a lot like the battle to balance the budget -- many of us believe that we need both tax increases and spending cuts to get there, but we refuse to accept it if it raises *our* taxes or cuts *our* preferred spending programs.

It's similar here -- many folks recognize that tough choices may need to be made about what is covered, how we deal with "end of life" care, how much expensive modern technological procedures we can afford... but if it limits our own access to the very best, most expensive care imaginable, it's a non-starter.

 

[pb4uski]

I've felt that a lot of large mega corps with huge employee bases do a lousy job of leveraging their volumes for group rates. It is really much easier for them to simply pass on increased costs to employees vs battling the healthcare providers/drug companies to lower costs.

Also, the other area the I find annoying is the so called family plans that have the same price tags regardless of how many kids you. That just seems fundamentally unfair to me.

Most megacorps self-insure - they hire an insurance company to administer claims and pay the actual claims + an administrative fee + a stop-loss insurance policy in case experience is particularly bad that year so I'm not sure your first point is valid.

While I understand your second point it is easier administratively and the reality is that kids health care costs don't cost a lot on average so the difference probably isn't very significant and they don't have to deal with kids being added and dropped.

 

[eytonxav]

Most megacorps self-insure - they hire an insurance company to administer claims and pay the actual claims + an administrative fee + a stop-loss insurance policy in case experience is particularly bad that year so I'm not sure your first point is valid.

While I understand your second point it is easier administratively and the reality is that kids health care costs don't cost a lot on average so the difference probably isn't very significant and they don't have to deal with kids being added and dropped.

Self insure yes, but they still they pay the bills and with their admin company do exert leverage over the healthcare providers, much more so than the individual subscriber does.

On the second point, most of these enrollments are computerized, so not really a big admin burden. On the cost of such coverage, when my son came off my plan this year, the cobra fee was $9K for a healthy 25 yo. Seems like there is no reality in that cost.

 

[pb4uski]

Self insure yes, but they still they pay the bills and with their admin company do exert leverage over the healthcare providers, much more so than the individual subscriber does.

On the second point, most of these enrollments are computerized, so not really a big admin burden. On the cost of such coverage, when my son came off my plan this year, the cobra fee was $9K for a healthy 25 yo. Seems like there is no reality in that cost.

I noticed the same thing with my cobra rates that my healthy 23 yo would cost about the same as me or DW and we are each 56 (the diff between family rate and couple rate). Doesn't make sense.

 

[ziggy29]

I noticed the same thing with my cobra rates that my healthy 23 yo would cost about the same as me or DW and we are each 56 (the diff between family rate and couple rate). Doesn't make sense.

I've don't know that I've ever seen an employer group plan that charges by age (I haven't ever been in one that did). That would tend to make COBRA a horrible deal for most younger folks, but for some 50+ folks with health issues it's probably better than you'll find on the individual market for the same level of coverage -- possibly by a considerable margin.

 

[Texas Proud]

To answer the question: unions. By interfering with the free market, they brought inefficiencies, forced unsustainable benefits like universal health insurance, and made overseas labor more attractive thus chasing jobs.

The number of people in he insurance system compared to the number of union members is not even close... it is not the unions that caused the health care problem

 

[brianinsf]

That would tend to make COBRA a horrible deal for most younger folks, but for some 50+ folks with health issues it's probably better than you'll find on the individual market for the same level of coverage -- possibly by a considerable margin.

While not 50 when I went off Cobra last month my conversion plan went from around $340 per month on Cobra to $660 per month on the high deductible plan or $875 for the same coverage. The conversion rate was still better than I could get on the open market thanks to pre-existing conditions.

 

[Mulligan]

While not 50 when I went off Cobra last month my conversion plan went from around $340 per month on Cobra to $660 per month on the high deductible plan or $875 for the same coverage. The conversion rate was still better than I could get on the open market thanks to pre-existing conditions.

I am also still under 50 and fortunately for me, I do not have a pre- existing condition. This allowed me to do the opposite. Instead of staying on a $500 a month group plan with $1000 deductible and office, script co-pay, I chose a $72 monthly $5k deductible with HSA. After being in a group plan my whole life, I didnt realize until retirement how underwriting makes insurance relatively inexpensive for clean bill of health people, and a financial nightmare for those who arent.

 

[modhatter]

As someone who has always been self employed and thus self insured, I can't help wonder how much the mood of the country might be different if everyone had to purchase their own health insurance. I know for those of you who receive it through your employer, you recognize it as compensation But knowing that vs having to actually pay it yourself year after year and watch the premiums jump by 10, 20 % , could you honestly say it would not effect your thinking as far as wanting a single payer plan?

I know the pat answer to that is.... Not if my pay went up by the same amount (in fact more because of taxes) But I don't know if that is an honest answer. Don't you think health insurance is taken for granted by those who have not had to purchase it for themselves for most of their life? When you started out many years ago, you were quoted a salary. The health benefits was not a serious number back then that influenced your job decision. Today yes, but back then no. So lets say everyone has to pay for their own insurance and not your employer. Don't you think that might be the reason that we are the last industrial country without some form of single payer insurance?

Here's one more to ponder. If all companies stopped offering employer based health insurance, and you became responsible for your own, which in the current market would leave you very vulnerable should you develop "a condition". Do you think this would make a difference in the way you think insurance should be administered?

 

[tightasadrum]

There are many great points made throughout this thread. I remember, way back in the dark ages, when I first encountered the idea of medical insurance. "why don't we just pay the doctor/hospital?" Since then it seems any hospital that encounters a patient without insurance immediately jacks up the price x5. What's that about? Oh I get it! Then when the uninsured patient can't pay the bill, the hospital gets to write it off against earnings at the hugely elevated rate.

 

[Huston55]

In the UK an independent panel assesses the efficacy of treatments. So there is rationing in the UK, but not to the extent that private health insurance rations care in the US by excluding many because of pre-existing conditions.

+1

Absolutely correct that we have health care rationing as you've described, due to pre-existing conditions, unemployment, etc. Primarily tied to the employer based, insurance company managed health insurance system described below.

I see no reason to couple the quality of the technology with the payment/insurance system. They are independent. Yes MRIs are expensive, but IIRC in the good old days, if you wanted to see if you were pregnant you had to kill an actual rabbit. Today you get a stick for a few bucks at Kmart.

IOW I do think many would like to go back to the insurance system of the 1970s or the 1950s. The one with fewer, cheaper liability issues.

I agree. The payment/insurance system tied to employers as the primary vehicle for coverage is the problem; too many conflicts of interest and too much opportunity for manipulation.

I would take this in another direction besides union-bashing: Other countries have unions, but they don't have a situation where all of your health insurance is expected to come from your employer. I would submit that this unfortunate expectation that health insurance comes from employers is a bigger problem than unions here. If the U.S. didn't have this unique and dysfunctional model of tying health insurance to full-time employment, the unions wouldn't need to demand it from employers, would they? For that reason, U.S. unions are even at a competitive disadvantage to unions in other countries where the cost of employer-provided health insurance isn't a huge additional burden to the employer that grows by 10% a year or more.

So the real problem here: Sever the link between health insurance and employment once and for all. This is really hurting our global competitiveness *and* the prosperity of our middle class, for union and non-union shops alike.

+1

Establish a single payer system, eliminate the middle man (insurance companies), make sure we have reasonable liability rules, and reinvest the waste we'll recapture into something more productive.

 

[haha]

Establish a single payer system, eliminate the middle man (insurance companies), make sure we have reasonable liability rules, and reinvest the waste we'll recapture into something more productive.

Most countries that have universal coverage systems either are very homogeneous societies, or were very homogeneous societies when the systems were formed and voted in. Also for the large share of these European systems, well funded and well coordinated resisitance by interested parties was much less that what one finds in the US today.

Also, we Americans are not real crazy about one another overall, (except on July 4), and we don't have an all-inclusive coverage system. We'll see, but we may never get one. The tide seems to be running out with respect to large new entitlements and tax spending mandates. No matter how the oddly named Patient Protection and Affordable Care Act shakes out, it cannot work without large tax funded subsidies. Most of the people going around without insurance are not well to do people who just happen to prefer going bare. They are too poor to buy anything even remotely sound actuarially. And they are very likely going to stay too poor until some miracle comes along. So even if the mandate stands, somebody is going to have to pay the freight for many participants, and between you and me, it won't be the 1% because it can't be.

Ha

 

[Brat]

Health insurance as a part of an employment package started during WWI in response to wage and price controls. Wage control did not include fringe benefits so employers used health insurance as an incentive to hire. Until that time people paid for health care out of their own pocket or joined a 'mutual benefit' association which was a major medical & life insurance co-op.

Kaiser-Permanente was formed by the Kaiser Corporation because the poor Blacks that were applying at their ship yards war time industrial facilities had unmet health care needs. To assure that the care they received had a preventive focus they created their own clinics & constructed hospitals (now you know why they were headquartered in Oakland and had, originally, operations primarily in the Bay area, Portland and HI).

Blue Cross/Blue Shield used to be a non-profit formed by physicians and hospitals who wanted the public to 'join' so that they could assure that they got paid. Blue Cross/Blue Shield left that model.

 

[ziggy29]

Here's one more to ponder. If all companies stopped offering employer based health insurance, and you became responsible for your own, which in the current market would leave you very vulnerable should you develop "a condition". Do you think this would make a difference in the way you think insurance should be administered?

I think so. We've become used to the distorted market conditions created by the expectation that employers provide health insurance. Other countries didn't pursue that dysfunctional model and they faced the situation you described as a result -- decades ago in most cases.

We really must sever the link between health care and employment. It may be the single most important reform we can make.

 

[modhatter]

You may be absolutely right Ziggy. It would be good for many reasons you already mentioned including a big leg for business and fair competition, unions, as well as wake up call for US citizens. Of course, I don't expect those now enjoying their fully paid for health care plan to agree with us.

Though there are those who would vote against their own interests. I have heard it a lot concerning the tax break issue.(letting Bush's tax break expire) But of course, this is coming from the mouths of some very wealthy individuals, but I still admire their ability to look at the whole picture as opposed to only their own gain or loss.

I think health care is a more scary thing for people and the thought of not having it provided for them might be terrifying. I don't know. I can't speak from experience there. It's just a feeling I have. Maybe it's just
"I got it good", don't you dare rock my boat. To bad for the rest of you that didn't get a job with mega corp. This is mine, all mine....go away"

Now I'm just being silly.

 

[samclem]

We really must sever the link between health care and employment. It may be the single most important reform we can make.

Agreed. But all the cards seemed stacked against eliminating the link. In the 2008 Presidential campaign a candidate proposed eliminating the link and got bludgeoned very effectively. No one will be repeating that mistake again soon. Also, the issue doesn't fit neatly into either party's interest list. And, I think (at least now) that a lot of employers like things just as they are. They may whine about high health costs, but the present setup lets them attract and keep employees with an incentive that the employees cannot buy for themselves as cheaply. The whacky, inefficient delivery system puts large employers at a competitive advantage.

The new health care law will finally break the link between employers and health care. They'll drop employees and pay the cheaper fine, and pay the employees more if necessary to keep them. The employee will, if qualified by income, then turn around and get the "free" government subsidy. It will cost more than what is being done today, but at least people will be buying policies individually. When the system crashes we'll have established that precedent and we can pick up the pieces and build a rational system.

 

[Midpack]

The new health care law will finally break the link between employers and health care. They'll drop employees and pay the cheaper fine, and pay the employees more if necessary to keep them. The employee will, if qualified by income, then turn around and get the "free" government subsidy. It will cost more than what is being done today, but at least people will be buying policies individually. When the system crashes we'll have established that precedent and we can pick up the pieces and build a rational system.

You may well be right, but I'd expect the crash to be almost immediate if costs are indeed higher as I've read. Especially sad (unnecessary?) given every other developed country has already figured out how to deliver comparable universal health care much more cost effectively than our current private system, and we could model best practices. Taiwan did so, and their admin costs are 1/3rd ours! Evidently Switzerland moved from a private system most like ours to public health care, so it can be done.

Seems clear that the majority don't really want change because corporations are providing their health care with users who have no idea (won't acknowledge) what it really costs. I know almost none of my employees had any clue even though we showed them periodically. I'm not enamoured with our current political polarization and subsequent paralysis, but I don't think the electorate wants to face facts at all.