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-   -   Health care cost bubble (http://www.early-retirement.org/forums/f38/health-care-cost-bubble-51832.html)

nun 08-27-2010 06:30 AM

Health care cost bubble
 
With double digit health insurance costs each year we are obviously in a bubble. The increases are unsustainable and when it bursts there will be a lot of real and financial pain for everyone.

In the US the UK approach to health care is derided as being "socialized medicine". However, the British love it, live longer that Americans, and it costs them far less. So at what point would you move to the UK, if you could, and use their system....

lets-retire 08-27-2010 08:49 AM

I wouldn't. There are a lot of issues with comparing the two systems that the end numbers don't take into consideration. Things like the US having more athletes involved in "dangerous" sports, the US routinely providing emergency treatment for people from other countries i.e. Canada because we have the capacity they don't, we spend a lot more in elective cosmetic surgery than almost any other country in the world, we have some of the best medical training in the world, we have one of the most violent societies in the industrialized world, etc, etc.

The DW has non-emergency medical issues, but they are time sensitive. If she is unable to obtain medical care quickly the issue passes and no diagnosis or treatment can be given. We went through all of that for a couple years until she changed doctors.

nun 08-27-2010 09:01 AM

Quote:

Originally Posted by lets-retire (Post 972514)
I wouldn't. There are a lot of issues with comparing the two systems that the end numbers don't take into consideration. Things like the US having more athletes involved in "dangerous" sports, the US routinely providing emergency treatment for people from other countries i.e. Canada because we have the capacity they don't, we spend a lot more in elective cosmetic surgery than almost any other country in the world, we have some of the best medical training in the world, we have one of the most violent societies in the industrialized world, etc, etc.

I'm not sure I agree with your reasons why the US system costs more and Americans have shorter lives that the British, and other Europeans. It's interesting that Americans are scared of the UK system because of waiting lines and rationing and the British are scared of the US system because of cost and the lack of easy access to care for all.

With US permiums going up so fast my question remains: At what point (cost, %age insured) would you be more comfortable with a UK type system that is funded through taxation, but is free at the point of delivery and covers everyone.

dex 08-27-2010 09:15 AM

Quote:

Originally Posted by nun (Post 972455)
With double digit health insurance costs each year we are obviously in a bubble. The increases are unsustainable and when it bursts there will be a lot of real and financial pain for everyone.

In the US the UK approach to health care is derided as being "socialized medicine". However, the British love it, live longer that Americans, and it costs them far less. So at what point would you move to the UK, if you could, and use their system....

I think the next bubble to burst is the College/University bubble. Look into it and you'll see what I mean.

The UK is addressing its budget crisis. They may have liked it in the past but that will probably change. I'm guessing the average person will need some sort of supplemental insurance in the future. Some do that now.
NHS 'preparing to cut millions of operations': Patients will lose out to ensure £20bn savings | Mail Online

He said primary care trusts - which commission care - are already compiling lists of 'low value' operations that would no longer be provided.
These include hip replacements for obese patients and some operations for hernias and gallstones. Procedures for varicose veins, ear and nose problems including grommets in children are also not funded in some areas.
---
Nice will also push through 150 changes to medical practice aimed at saving money, from reducing prescribing of antibiotics by GPs to delaying some prostate cancer tests.
++++

Quote:

Originally Posted by nun (Post 972520)
With US permiums going up so fast my question remains: At what point (cost, %age insured) would you be more comfortable with a UK type system that is funded through taxation, but is free at the point of delivery and covers everyone.

Everybody gets covered; then everybody gets 'un-covered' over time, then people buy supplemental ins. as the UK system demonstrates.
//////////////

US health care costs are just a matter of how you pay - premiums or taxes/deficit spending.
The Obama care is estimated to cost 150B/year (check number, it came out after the bill was signed, I'm going from memory). So, health care costs will just add to the largest bubble - USA Debt about 14T now and increasing about 2T/year.

travelover 08-27-2010 09:21 AM

I predict that this thread will degrade into a political pi$$ing contest rapidly.

That said, I'd be willing to do a Canadian style health care system when the scales tipped such that it would be a net benefit for me. Right now I have employer paid health care in retirement and am somewhat insulated from the real costs. A British style system would be even harder to swallow, depending on how ineptly it was run.

lets-retire 08-27-2010 09:23 AM

Quote:

Originally Posted by nun (Post 972520)
I'm not sure I agree with your reasons why the US system costs more and Americans have shorter lives that the British, and other Europeans.

That's fine. I've done the research over and over concerning the costs, during our many debates on here. I typically get the same response you gave. It's nothing new to me. I've even gone so far as looking up the costs on WHO's website and comparing health care costs per capita adjusting for cost of living between countries and found most countries pay about the same. Yes we generally pay more per capita than many other countries, but it typically only works out to a few hundred dollars per year, IIRC. We as a nation waste more money on lattes and junk food than the amount we spend in excess of many of these other countries.

Quote:

Originally Posted by nun (Post 972520)
With US permiums going up so fast my question remains: At what point (cost, %age insured) would you be more comfortable with a UK type system that is funded through taxation, but is free at the point of delivery and covers everyone.

The costs will eventually hit a balancing point, unless it is masked by government involvement. Once it hits the balancing point the costs will cease to go up. I have suffered from "free" health care from the military and VA and wouldn't wish that on anybody. In my many years experience with the federal government, I've come to the conclusion that the only thing they consistently do well is screw things up.

huusom 08-27-2010 10:05 AM

Quote:

Originally Posted by lets-retire (Post 972531)

The costs will eventually hit a balancing point, unless it is masked by government involvement. Once it hits the balancing point the costs will cease to go up. I have suffered from "free" health care from the military and VA and wouldn't wish that on anybody. In my many years experience with the federal government, I've come to the conclusion that the only thing they consistently do well is screw things up.

Retire:

I totally agree with you that the costs eventually hit a balacing point. But is this the point where the US became a third world country and only the wealthy and those who have goverment or employer provided insurances can have access to healthcare and the rests are left to suffer.

I also wonder how many senior citizens will voluntary give up their medicare since this is run our screwed up government?

nun 08-27-2010 10:05 AM

Quote:

Originally Posted by travelover (Post 972529)
I predict that this thread will degrade into a political pi$$ing contest rapidly.

Maybe, but I hope not. I'm really interested in how the US will tackle the healthcare cost issues and what people think should be done with both work based plans and Medicare and Medicaid. We seem to be in a death spiral unable to make cuts, save money, raise taxes or come to a consensus.

Whatever the failings of the European systems there is a consensus that they should be funded and continue to deliver care to everyone.

The Daily Mail piece should be viewed with a little skepticism as it supports the Labour Party and it's whipping up fear of Tory/Liberal cuts. The Torys have said they will protect the NHS form their budget cuts, personally I don't believe it, but it's the third rail in the UK and elections are won or lost on how the voters think the system is doing, so it will always be ther is some form and subject to the ballot box.

dex 08-27-2010 10:10 AM

Quote:

Originally Posted by nun (Post 972546)

The Daily Mail piece should be viewed with a little skepticism as it supports the Labour Party and it's whipping up fear of Tory/Liberal cuts. The Torys have said they will protect the NHS form their budget cuts, personally I don't believe it, but it's the third rail in the UK and elections are won or lost on how the voters think the system is doing, so it will always be ther is some form and subject to the ballot box.

Axe falls on NHS services - Telegraph

Patients’ groups have described the measures as “astonishingly brutal”.

An investigation by The Sunday Telegraph has uncovered widespread cuts planned across the NHS, many of which have already been agreed by senior health service officials.

http://findarticles.com/p/news-artic.../ai_n54757962/

THE boss of private medical insurer Bupa today said cutbacks to the NHS would be a "supportive trend for private healthcare" during the next few years, but also warned that the country's funding of long-term care for the elderly is in a dire state that requires reform.


Quote:

Originally Posted by dex (Post 972527)
Everybody gets covered; then everybody gets 'un-covered' over time, then people buy supplemental ins. as the UK system demonstrates.


nun 08-27-2010 10:24 AM

Quote:

Originally Posted by dex (Post 972551)
Axe falls on NHS services - Telegraph

Patients’ groups have described the measures as “astonishingly brutal”.

NHS cuts will benefit private healthcare, says Bupa boss [Edition 2] | Evening Standard; London (UK) Newspaper | Find Articles at BNET

THE boss of private medical insurer Bupa today said cutbacks to the NHS would be a "supportive trend for private healthcare" during the next few years, but also warned that the country's funding of long-term care for the elderly is in a dire state that requires reform.

This underlines my question. What will the US do. The UK is doing something to cut costs. There is probably a lot of exaggeration and there will be push back from doctors and patients, but something real is happening. I see nothing in the US.

If I ER I can get a $350/mth plan with big deductibles and co-pays. If the cost of that plan continues to increase at 10% per year I'll be unable to afford it. I just see spiraling costs and reduced services in the US with nothing being done about it. At least in the UK they are realistic that there is a finite pool of money and that needs to be spent wisely so everyone can be well cared for.

dex 08-27-2010 10:54 AM

Quote:

Originally Posted by nun (Post 972556)
This underlines my question. What will the US do. The UK is doing something to cut costs. There is probably a lot of exaggeration and there will be push back from doctors and patients, but something real is happening. I see nothing in the US.

There is not free lunch. The UK is cutting services. So, the people are being 'un-insured' little by little. Those that can afford it are buying health ins.

So, the question for you is: How do you want to pay for health care - increased premiums or government plan with higher taxes or increased debt?

Knowing with a government plan, this is the future.
Quote:

Originally Posted by dex (Post 972527)
Everybody gets covered; then everybody gets 'un-covered' over time, then people buy supplemental ins. as the UK system demonstrates.


RonBoyd 08-27-2010 11:00 AM

I don't know. Is Medicare "Socialized Medicine"? If so should I be "derided" for not moving?

wanaberetiree 08-27-2010 11:19 AM

Quote:

Originally Posted by nun (Post 972455)
So at what point would you move to the UK, if you could, and use their system....

you should post a poll with 2-3 questions and it will be interesting to see how this forum is divided on health care issue

ziggy29 08-27-2010 11:19 AM

Quote:

Originally Posted by RonBoyd (Post 972569)
I don't know. Is Medicare "Socialized Medicine"? If so should I be "derided" for not moving?

One could argue that the funding and benefit mechanisms are "socialized" but the care itself is not.

nun 08-27-2010 11:39 AM

Quote:

Originally Posted by dex (Post 972568)
There is not free lunch. The UK is cutting services. So, the people are being 'un-insured' little by little. Those that can afford it are buying health ins.

So, the question for you is: How do you want to pay for health care - increased premiums or government plan with higher taxes or increased debt?

Knowing with a government plan, this is the future.

So what is the US going to do? What's the solution to increasingly unaffordable US healthcare? What will happen to Medicare?

In the UK costs ARE being cut, something is happening to keep healthcare affordable.

There is a basic difference between the way the British and the Americans expect to get health care, but both systems obviously deliver good quality medicine. There are horror stories told about both systems, usually in the other country to make themselves feel superior. The one area where I feel the US system fails is it's inability to change given the obvious fact that there is no free lunch.

dex 08-27-2010 11:50 AM

Quote:

Originally Posted by nun (Post 972580)
In the UK costs ARE being cut, something is happening to keep healthcare affordable.

Of course, costs are being cut. They are doing it by cutting medical care. Bit by bit people are being 'un-insured'.

If you like that system, find a insurance company that will keep your premium constant over time but as costs increase they reduce the medical services the insurance pays for.

Here are a few examples from the article.

An investigation by The Sunday Telegraph has uncovered widespread cuts planned across the NHS, many of which have already been agreed by senior health service officials. They include:
* Restrictions on some of the most basic and common operations, including hip and knee replacements, cataract surgery and orthodontic procedures.
* Plans to cut hundreds of thousands of pounds from budgets for the terminally ill, with dying cancer patients to be told to manage their own symptoms if their condition worsens at evenings or weekends.
* Tighter rationing of NHS funding for IVF treatment, and for surgery for obesity.
* Cost-cutting programmes in paediatric and maternity services, care of the elderly and services that provide respite breaks to long-term carers.

M Paquette 08-27-2010 12:46 PM

The 'if this goes on' model currently produces some... interesting results.

If we take an annual rate of increase and extrapolate it out over several years, things start to look unsustainable pretty quickly.

Annual increase10 years30 years
10% 2.6x 17.5x
11% 2.8x 22.9x
12% 3.1x 30.0x
13% 3.4x 39.0x
14% 3.7x 50.1x
15% 4.0x 66.2x

At 12% a year, our $11,000 annual family insurance cost rises to $30,800 annually before inflation and age brackets are considered, after 10 years, and to $330,000 annually after 30 years. I humbly contend that this might not be a sustainable rate of increase. Something has to give. I am curious as to what that something will be.

nun 08-27-2010 01:08 PM

Quote:

Originally Posted by dex (Post 972582)
Of course, costs are being cut. They are doing it by cutting medical care. Bit by bit people are being 'un-insured'.

If you like that system, find a insurance company that will keep your premium constant over time but as costs increase they reduce the medical services the insurance pays for.
.

Interesting idea, but it would be hard to sell. However, your suggestion has the essence of the issue "costs increase". I'm interested in solutions to the 10% premium increases each year in the US.

Obviously a 10% per year increase is unsustainable, what are the hospitals, doctors and insurance companies going to do to control costs? Where are the cost saving mechanisms in the US system or will the price and deductibles just keep going up until we can't afford them any more?

nun 08-27-2010 01:09 PM

Quote:

Originally Posted by M Paquette (Post 972607)
The 'if this goes on' model currently produces some... interesting results.

If we take an annual rate of increase and extrapolate it out over several years, things start to look unsustainable pretty quickly.

Annual increase10 years30 years
10% 2.6x 17.5x
11% 2.8x 22.9x
12% 3.1x 30.0x
13% 3.4x 39.0x
14% 3.7x 50.1x
15% 4.0x 66.2x

At 12% a year, our $11,000 annual family insurance cost rises to $30,800 annually before inflation and age brackets are considered, after 10 years, and to $330,000 annually after 30 years. I humbly contend that this might not be a sustainable rate of increase. Something has to give. I am curious as to what that something will be.

+1, you put it better than I did.

dgoldenz 08-27-2010 02:46 PM

Quote:

Originally Posted by nun (Post 972619)
+1, you put it better than I did.

Said it before and will say it again....if you can't write the check, then you can't write the check! Those charts show 10-15% increases, but most individual policies my clients have were hit with 20-35% increases the past two years. My personal policy with Anthem went up 35% in one year.

In the health reform bill you have an ever-increasing subsidy since the out of pocket costs are capped based on income. If your income today is $60k and you can't spend more than 9.5% of that on premiums that cost 3 times as much, how big is that subsidy when you're still making $60k a few years later and the rates keep going up 20-30%? Taxpayers making over the subsidy limits will also balk at the subsidies as the disparity gets bigger. Why should someone making $88k with a family of 4 only have to pay $8k/year for insurance while the person making $89k has to pay $25k? Sickening...


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