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Old 11-08-2016, 01:33 PM   #41
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Part of the problem I see is that the deductibles can be so high that people will have insurance and then can't afford to use it. We pay 10k /year for retiree coverage but at least it is affordable to use.
insurance isn't meant to make the cost of healthcare inexpensive, it's to help indemnify the insured from unexpected losses
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Old 11-08-2016, 01:46 PM   #42
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insurance isn't meant to make the cost of healthcare inexpensive, it's to help indemnify the insured from unexpected losses
Not really. That would be the case for homeowners or life insurance. Health insurance is a product that comes in-between and intermediates both the provider and the consumer, taking from both. By creating preferential prices for insurers and unaffordable, exorbitant prices for consumers, health care providers and insurers combine to make insurance too risky to not have. Financial risk minimization is no longer the primary purpose.
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Old 11-08-2016, 01:50 PM   #43
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Part of the problem I see is that the deductibles can be so high that people will have insurance and then can't afford to use it. We pay 10k /year for retiree coverage but at least it is affordable to use.
I think it depends how much you normally use healthcare. In 2016, out-of-pocket maximum could be no more than $6,850 for an individual plan and $13,700 for a family plan before marketplace subsidies. We helped out our kids last year, but medical expenses for the two of us other than premiums were $0.
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Old 11-08-2016, 01:59 PM   #44
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Besides the answers in the previous posts (Roth withdrawals, HSA, HELOC, tax deferred retirement account income, business expenses), for some households with expenses at or near the cliff, it might be more beneficial to focus more on optimizing / lowering expenses and getting the ACA tax credits instead of part-time work for extra income. The extra income is usually taxable (federal income tax, social security and maybe state income tax), often adds in job and commute expenses, too, and might mean a loss of $10K - $20K in ACA tax credits...
The common unintended effect of public assistance programs is that they encourage people to not work. When working costs people money, well, they just stop.
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Old 11-08-2016, 02:15 PM   #45
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I have some chronic health conditions and take 4 meds. I also have had a bunch of tests this year for neurological issues, etc. My DH is in remission for cancer so sees docs regularly. So yes we use our insurance. 12 years ago it would not have mattered and we used it only for preventive care. Things can change on a dime.
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Old 11-08-2016, 02:23 PM   #46
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The common unintended effect of public assistance programs is that they encourage people to not work. When working costs people money, well, they just stop.
Much more tax money is spent subsidizing employer sponsored health care than ACA individual premiums. So it looks like it does both - discourage and encourage work.
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Old 11-08-2016, 02:25 PM   #47
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I hear you - my xarelto without insurance would be about 300 a month

one reason DW won't let me FIRE is due to the health insurance - we have it pretty good - $10 copay for meds and dr visits...

if we were on the exchange I'm guessing we would spend thousands a month, instead of hundreds
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Old 11-08-2016, 02:32 PM   #48
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Much more tax money is spent subsidizing employer sponsored health care than ACA individual premiums. So it looks like it does both - discourage and encourage work.
That may be true, but not everyone works for employers who offer health insurance, or has income less than 400% FPL. Small business owners are hung out to dry.
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Old 11-08-2016, 07:56 PM   #49
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if we were on the exchange I'm guessing we would spend thousands a month, instead of hundreds
Totally depends on your household size and reported MAGI.
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Old 11-08-2016, 10:42 PM   #50
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Much more tax money is spent subsidizing employer sponsored health care than ACA individual premiums. So it looks like it does both - discourage and encourage work.
How is this?? Are you saying because business deducts as a tax expense it is a subsidy? Or is there some program where business can get the government to pay for health care?
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Old 11-09-2016, 05:09 AM   #51
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How is this?? Are you saying because business deducts as a tax expense it is a subsidy? Or is there some program where business can get the government to pay for health care?
Employer provided health care insurance is a fully deductible business expense, but unlike salaries, not considered taxable income to the employee. The gov't classifies it as a "revenue expenditure ". In other words, something that really was taxed, then spent on that item. As such, it represents the single largest tax spending item in the budget. As a subsidy, the value is the total cost of insurance times the marginal tax rate of the employee.
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Old 11-09-2016, 05:40 AM   #52
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How is this?? Are you saying because business deducts as a tax expense it is a subsidy?
Yes, whereas individuals (except for some who are self-employed) can not take a top-line tax deduction for the premiums paid. This is one form of cost shifting from employer plans to individual plans.
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Old 11-09-2016, 07:04 AM   #53
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Not really. That would be the case for homeowners or life insurance. Health insurance is a product that comes in-between and intermediates both the provider and the consumer, taking from both. By creating preferential prices for insurers and unaffordable, exorbitant prices for consumers, health care providers and insurers combine to make insurance too risky to not have. Financial risk minimization is no longer the primary purpose.
If health insurance did not exist, wouldn't the cost of healthcare have to find it's own level to a point that people could afford?

What did we do before the ACA? Or 50 years ago?
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Old 11-09-2016, 07:17 AM   #54
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Part of the problem I see is that the deductibles can be so high that people will have insurance and then can't afford to use it. ....
IMO there is a shift in what insurance is and needs to be a shift in how people view it. Back in the 1950s and early 60s, people paid for their medical services and health insurance was principally for large health events. It is heading that way today... insurance is principally to protect someone from the cost of a large health event... if you have an event that costs $100,000, you pay $6,000 and the insurer pays the rest... same as back then but the cost of medical services and deductibles have got higher.

In between we slipped into a world where people expected health insurance to pay for every medical service other than perhaps a small co-pay and it changed people's expectations and they are having difficulty transitioning back.

It's sort of like collision on your car, you're on your own for the small stuff and insurance kicks in for the big stuff and you can pick your deductible and the cost of insurance is more if the deductible is lower.
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Old 11-09-2016, 08:20 AM   #55
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If health insurance did not exist, wouldn't the cost of healthcare have to find it's own level to a point that people could afford?

What did we do before the ACA? Or 50 years ago?
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IMO there is a shift in what insurance is and needs to be a shift in how people view it. Back in the 1950s and early 60s, people paid for their medical services and health insurance was principally for large health events. It is heading that way today... insurance is principally to protect someone from the cost of a large health event... if you have an event that costs $100,000, you pay $6,000 and the insurer pays the rest... same as back then but the cost of medical services and deductibles have got higher.

In between we slipped into a world where people expected health insurance to pay for every medical service other than perhaps a small co-pay and it changed people's expectations and they are having difficulty transitioning back.

It's sort of like collision on your car, you're on your own for the small stuff and insurance kicks in for the big stuff and you can pick your deductible and the cost of insurance is more if the deductible is lower.
In the 50s, most people did not have health insurance. Even Medicare came about only in 1965.

It was before my time, but I was told that people just paid for doctor visits with cash, and it was not expensive. It was not too different than having to pay for car or home repair. For larger hospital bills, people were paying in installments.

But back then, there was no expensive and fancy treatments. Now, when we are seduced with cancer medicine that can prolong our life another month, or machines that can keep us alive but bedridden, not too many dying people can say no.

It's the same as we having a lot of bills that did not exist before such as cable TV and wireless phone bills, smartphone upgrade every couple of years, lots of electronic toys, etc... It's all very nice to have, but they add up.
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Old 11-09-2016, 08:22 AM   #56
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Except now everything is priced insanely. $100 for a complete blood count. The test involved taking a small amount of blood and sticking it in a machine. A couple of minutes later the machine spits out a result.

An average simple problem doctor visit is $150 retail. And what are the costs for all those annual screenings that didn't exist years ago.

Doctors and hospitals have no idea what the real cost to patients is for their services. They can no longer tell you up front what you will be charged.

The problem is all those little events quickly add up to $100,000.

Physicians and hospitals used to provide charity care. Can you imagine a physician doing that nowadays?

Insurance started in the Civil War era. Health insurance as we know it really took off during and after WW II, including Kaiser Permanente.

So none of us are old enough to have seen a time before total health care insurance.
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Old 11-09-2016, 08:36 AM   #57
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Except now everything is priced insanely. $100 for a complete blood count. The test involved taking a small amount of blood and sticking it in a machine. A couple of minutes later the machine spits out a result.

An average simple problem doctor visit is $150 retail. And what are the costs for all those annual screenings that didn't exist years ago...
Well, one should shop better. As I showed in another thread, the common blood tests are insanely cheap at Sonora Quest, a lab that we go to.

A CBC (complete blood count) is $11, and that's everything, including the labor to draw your blood. And that's if I walk in and pay cash, not the insurance negotiated rate, though I doubt it can be much lower.

A comprehensive blood test including the Complete Metabolic Panel and the Lipid Panel would cost me $37 cash. Again, surprisingly cheap.

I think a hospital would gouge for hundreds, if not thousands for these blood tests.

PS. By the way, my PCP gets $90 for a routine visit. I think it can be lower, if he does not have to hire the clerks to handle paperwork. The clerical staff is more than his medical staff.
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Old 11-09-2016, 08:44 AM   #58
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...

Physicians and hospitals used to provide charity care. Can you imagine a physician doing that nowadays?

....
Yes (although there are limits--the business must run). And DW also insists that the local charity medical clinic be a substantial recipient of our giving.
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Old 11-09-2016, 09:25 AM   #59
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IMO there is a shift in what insurance is and needs to be a shift in how people view it. Back in the 1950s and early 60s, people paid for their medical services and health insurance was principally for large health events. It is heading that way today... insurance is principally to protect someone from the cost of a large health event... if you have an event that costs $100,000, you pay $6,000 and the insurer pays the rest... same as back then but the cost of medical services and deductibles have got higher.
But the problem is that the premium just to get that basic coverage is now $1k a month or more for many couples. So add another $12k+ a year to that.

I think most of us here can handle that, but the ones that truly need the help (just over the subsidy cutoff) are complaining loudly that they can't afford it. And I don't blame them.

Whatever, probably doesn't matter at this point. The ACA as we know it will probably not be around in 2018.
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Old 11-09-2016, 11:42 AM   #60
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How is this?? Are you saying because business deducts as a tax expense it is a subsidy? Or is there some program where business can get the government to pay for health care?
I was thinking about in terms of the employer subsidy of health insurance not being taxable on the employee's income tax return. I saw a huge difference in how I paid for HI before I ERed and after.

Before - my employer paid some or most of my HI and that was tax-free for me. The rest of it was pre-tax (i.e. fully deductible) even if I didn't itemize my tax deductions.

After (but pre-ACA) - I pay for my entire HI, some of it tax-deductible but much of it not tax-deductible because it falls within the 10%-of-AGI threshold.

After (and after ACA) - Same as above but some of my premiums (ACA subsidy) are tax free.
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