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Old 03-10-2017, 10:03 AM   #61
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There are things that can be done. What are the Canadians doing that allows them to get Rx drugs so much cheaper? I think we know that answer to that, so let's implement it.
We should find a giant, robust economy willing to shovel tons of money to fund the R& D of new drugs so we can buy them and pay just the marginal cost of their production? 😀 That would work, if we can find such a patsy.
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Old 03-10-2017, 10:04 AM   #62
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We should find a giant, robust economy willing to shovel tons of money to fund the R& D of new drugs so we can buy them and pay just the marginal cost of their production? 😀 That would work, if we can find such a patsy.
+1 !!!
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Old 03-10-2017, 10:21 AM   #63
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Here is an interesting article regarding new drug creation by country. From the abstract:
Objectives. We explored whether the United States, which does not regulate pharmaceutical prices, is responsible for the development of a disproportionate share of the new molecular entities (NMEs; a drug that does not contain an active moiety previously approved by the Food and Drug Administration) produced worldwide.

Methods. We collected data on NMEs approved between 1992 and 2004 and assigned each NME to an inventor country. We examined the relation between the proportion of total NMEs developed in each country and the proportion of total prescription drug spending and gross domestic product (GDP) of each country represented.

Results. The United States accounted for 42% of prescription drug spending and 40% of the total GDP among innovator countries and was responsible for the development of 43.7% of the NMEs. The United Kingdom, Switzerland, and a few other countries innovated proportionally more than their contribution to GDP or prescription drug spending, whereas Japan, South Korea, and a few other countries innovated less.

Conclusions. Higher prescription drug spending in the United States does not disproportionately privilege domestic innovation, and many countries with drug price regulation were significant contributors to pharmaceutical innovation.
https://www.ncbi.nlm.nih.gov/pmc/articles/PMC2866602/
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Old 03-10-2017, 10:36 AM   #64
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Under this Republican plan, if you are 50-64 years old, you pay 5x what 20-30 years old pay. Under Obamacare, it was only 3x. So, if a 30 yr old paid $180/ month, under Obamacare - a 50 yr old would pay no more than $540/mo. Under this Republican bill, a 50 yr old will pay $900/month (or 5x the $180). If this 50 yr old did not have insurance for 2 months, they slap a 30% penalty - that's $1170/month. Thats more than double the $540/month on Obamacare. It also has less subsidy than Obamacare.
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Old 03-10-2017, 10:57 AM   #65
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Too early, too complex, too divisive. Maybe 6 months to a year before it shakes out.
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Old 03-10-2017, 12:04 PM   #66
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Under this Republican plan, if you are 50-64 years old, you pay 5x what 20-30 years old pay. Under Obamacare, it was only 3x. So, if a 30 yr old paid $180/ month, under Obamacare - a 50 yr old would pay no more than $540/mo. Under this Republican bill, a 50 yr old will pay $900/month (or 5x the $180). If this 50 yr old did not have insurance for 2 months, they slap a 30% penalty - that's $1170/month. Thats more than double the $540/month on Obamacare. It also has less subsidy than Obamacare.
I guess we are just trying to awfullize this, taking the most negative view possible. Here's a take that is exactly as accurate:

"Under this Republican planproposal, if you are 30 years old, you pay only, at most, 20% of what a 50-64 year old pays. Under Obamacare, it was 33% : That's a decrease in premiums of over 39% compared to the present system! And under the present system the, IRS automatically "slaps on" a fine tax of thousands of dollars if families have a lapse in coverage. Under the newly proposed system, there's no government penalty, but insurers can choose to add 30% to their premiums if you go without insurance for 60 days."
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Old 03-10-2017, 12:12 PM   #67
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Under this Republican plan, if you are 50-64 years old, you pay 5x what 20-30 years old pay. Under Obamacare, it was only 3x. So, if a 30 yr old paid $180/ month, under Obamacare - a 50 yr old would pay no more than $540/mo. Under this Republican bill, a 50 yr old will pay $900/month (or 5x the $180). If this 50 yr old did not have insurance for 2 months, they slap a 30% penalty - that's $1170/month. Thats more than double the $540/month on Obamacare. It also has less subsidy than Obamacare.
From my years working in the actuarial field, whenever a rule change such as changing the age ratio was introduced, it was done on a revenue-neutral basis. That is, changing the age ratio from 3:1 to 5:1 could not, in the aggregate, generate more or less revenue than before the rule change. We often filed revenue-neutral rule changes with state insurance departments and they were always approved unless the state insurance department disagreed with the underlying rule change itself.

In order to accomplish that, there would be rate offsets to ensure that the rule change was revenue-neutral based on a given book of business. The amount of the rate offset would depend on how many people were in each of the rating categories and how much revenue each subgroup generated.

Using your $180 and $540 rates for younger and older people, let me first demonstrate 2 extreme examples. Suppose you have 10 people, all age 20-30. To ensure revenue-neutrality, the rate for the 50-60 class would increase to $900, as you wrote. But this assumes that nobody will be in that age class so the total revenue before and after would remain at $1,800 ($180 x 10). The other extreme would assume that all 10 people are age 50-60. There, the rate for the 20-30 would drop to $108, to assure revenue-neutrality ($540 x 10, or $5,400).

But neither scenario reflects the actual population, so what will happen is the rate for the age 20-30 will drop a little while the rate for the age 50-60 will increase a little, creating a 5:1 age ratio while generating the same overall revenue.

Suppose there are 5 people in each age group. Without going through all the algebra, to be revenue-neutral, the rate for the younger group would drop 33% to $120 while the rate for the older group would rise 11% to $600. The total revenue generated would be $3,600 before and after the age ratio change.
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Old 03-10-2017, 12:12 PM   #68
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Here is an interesting article regarding new drug creation by country. From the abstract:
Objectives. We explored whether the United States, which does not regulate pharmaceutical prices, is responsible for the development of a disproportionate share of the new molecular entities (NMEs; a drug that does not contain an active moiety previously approved by the Food and Drug Administration) produced worldwide.

Methods. We collected data on NMEs approved between 1992 and 2004 and assigned each NME to an inventor country. We examined the relation between the proportion of total NMEs developed in each country and the proportion of total prescription drug spending and gross domestic product (GDP) of each country represented.

Results. The United States accounted for 42% of prescription drug spending and 40% of the total GDP among innovator countries and was responsible for the development of 43.7% of the NMEs. The United Kingdom, Switzerland, and a few other countries innovated proportionally more than their contribution to GDP or prescription drug spending, whereas Japan, South Korea, and a few other countries innovated less.

Conclusions. Higher prescription drug spending in the United States does not disproportionately privilege domestic innovation, and many countries with drug price regulation were significant contributors to pharmaceutical innovation.
https://www.ncbi.nlm.nih.gov/pmc/articles/PMC2866602/
Sorry but I call "bogus" on this methodology.
- Look at their methodology for assigning "inventor countries" to the NMEs. Drug companies are international and money is fungible. Dough that gets pumped into Big Pharma by the US "Medical/Industrial Complex" through our higher drug prices funds research in labs all over the world.
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Old 03-10-2017, 12:24 PM   #69
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I guess we are just trying to awfullize this, taking the most negative view possible. Here's a take that is exactly as accurate:

"Under this Republican planproposal, if you are 30 years old, you pay only, at most, 20% of what a 50-64 year old pays. Under Obamacare, it was 33% : That's a decrease in premiums of over 39% compared to the present system! And under the present system the, IRS could fine tax families thousands of dollars if they had a lapse in coverage. Under the newly proposed system, there's no government penalty, but insurers can choose to add 30% to their premiums if you go without insurance for 60 days."
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From my years working in the actuarial field, whenever a rule change such as changing the age ratio was introduced, it was done on a revenue-neutral basis. That is, changing the age ratio from 3:1 to 5:1 could not, in the aggregate, generate more or less revenue than before the rule change. We often filed revenue-neutral rule changes with state insurance departments and they were always approved unless the state insurance department disagreed with the underlying rule change itself.

In order to accomplish that, there would be rate offsets to ensure that the rule change was revenue-neutral based on a given book of business. The amount of the rate offset would depend on how many people were in each of the rating categories and how much revenue each subgroup generated.

Using your $180 and $540 rates for younger and older people, let me first demonstrate 2 extreme examples. Suppose you have 10 people, all age 20-30. To ensure revenue-neutrality, the rate for the 50-60 class would increase to $900, as you wrote. But this assumes that nobody will be in that age class so the total revenue before and after would remain at $1,800 ($180 x 10). The other extreme would assume that all 10 people are age 50-60. There, the rate for the 20-30 would drop to $108, to assure revenue-neutrality ($540 x 10, or $5,400).

But neither scenario reflects the actual population, so what will happen is the rate for the age 20-30 will drop a little while the rate for the age 50-60 will increase a little, creating a 5:1 age ratio while generating the same overall revenue.

Suppose there are 5 people in each age group. Without going through all the algebra, to be revenue-neutral, the rate for the younger group would drop 33% to $120 while the rate for the older group would rise 11% to $600. The total revenue generated would be $3,600 before and after the age ratio change.
Both of these posts seem to assume the rule change is required to be a revenue neutral change. I've seen nothing in the current bills that require that to be the case. If the rule change is not revenue neutral, then there is no reason that the "cheaper" price (younger people's) plans wouldn't stay the same and let the insurers just raise the 'higher" price (older people's) plans.
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Old 03-10-2017, 12:31 PM   #70
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We should find a giant, robust economy willing to shovel tons of money to fund the R& D of new drugs so we can buy them and pay just the marginal cost of their production? 😀 That would work, if we can find such a patsy.
Looking for a patsy is a waste of time. We need to look at why drugs in the USA are so much more expensive than the same or similar drugs in places like Canada and Europe. I suspect it is a combination of factors including everything from greed to government rules and regs that make it hard to have a truly competitive market for drugs.
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Old 03-10-2017, 01:02 PM   #71
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Both of these posts seem to assume the rule change is required to be a revenue neutral change. I've seen nothing in the current bills that require that to be the case. If the rule change is not revenue neutral, then there is no reason that the "cheaper" price (younger people's) plans wouldn't stay the same and let the insurers just raise the 'higher" price (older people's) plans.
There's no reason they couldn't charge 30 year olds $6000 per month and 60 year olds $30,000 per month. Except for market forces--assuming there are options. There's no "reason" McD's can't charge $100 for a Big Mac, but they don't because that's not the price at which they make the most profit.
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Old 03-10-2017, 01:09 PM   #72
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I think insurers are not free to set any price, they are subject to review, approval and compliance with state regulations.
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Old 03-10-2017, 01:15 PM   #73
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I think insurers are not free to set any price, they are subject to review, approval and compliance with state regulations.
Wait until the cross-state-lines sales get into full swing. The race to the bottom is on!
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Old 03-10-2017, 01:16 PM   #74
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Both of these posts seem to assume the rule change is required to be a revenue neutral change. I've seen nothing in the current bills that require that to be the case. If the rule change is not revenue neutral, then there is no reason that the "cheaper" price (younger people's) plans wouldn't stay the same and let the insurers just raise the 'higher" price (older people's) plans.
But this isn't how insurance rates are generally determined. First, the aggregate amount of premiums needed to cover losses are determined. Then, how those premiums are allocated among the insureds is determined next. If more premiums are to be collected from one subgroup of people via a rule change, then less will be collected from another subgroup of people.

If there is an overall need to raise rates, then that will be levied among all the insureds in the book of business. This will be combined with any rule changes and offsets to determine a final, overall change for each subgroup. The rule change alone won't be used to increase rates overall.
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Old 03-10-2017, 01:19 PM   #75
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Sorry but I call "bogus" on this methodology.
- Look at their methodology for assigning "inventor countries" to the NMEs. Drug companies are international and money is fungible. Dough that gets pumped into Big Pharma by the US "Medical/Industrial Complex" through our higher drug prices funds research in labs all over the world.
Absolutely correct!
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Old 03-10-2017, 01:20 PM   #76
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I think insurers are not free to set any price, they are subject to review, approval and compliance with state regulations.
In my 23 years working in the personal auto insurance field, it was a mixed bag. Some states required prior approval before rate and rule changes could go into effect. Other states were "file and use" which didn't require prior approval. This could vary by line of insurance, of course, as I was not privy to the other lines of insurance.
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Old 03-10-2017, 01:24 PM   #77
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I wonder how many retired folks will end up paying off their mortgages so they can reduce their incomes in an effort to get tax credits.
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Old 03-10-2017, 01:26 PM   #78
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Wait until the cross-state-lines sales get into full swing. The race to the bottom is on!
I will admit I have no idea how that will lead to any meaningful change in insurance. The large national insurers are certainly not chomping at the bit to get into markets that are not open to them (if there are any), they're cherry picking the profitable markets and leaving the others underserved. If UHC cannot make a profit here in Fl (in the individual market) why would Aetna? And if UCH doesn't want to service this market, why would UHC Georgia act differently?
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Old 03-10-2017, 01:33 PM   #79
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I will admit I have no idea how that will lead to any meaningful change in insurance. The large national insurers are certainly not chomping at the bit to get into markets that are not open to them, they're cherry picking the profitable markets and leaving the others underserved. If UHC cannot make a profit here in Fl (in the individual market) why would Aetna? And if UCH doesn't want to service this market, why would UHC Georgia act differently?
I'm mystified, too. But, I can see a window for cross-border efficiencies in provision of some medical care (not insurance). Non-rush but expensive surgeries done in a few central locations could reduce costs. Maybe even overseas. If there's a "driver" to induce such efficiencies it could happen, and it might promote competition that doesn't exist now in sparsely populated areas/expensive markets.
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Old 03-10-2017, 01:33 PM   #80
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Both of these posts seem to assume the rule change is required to be a revenue neutral change. I've seen nothing in the current bills that require that to be the case. If the rule change is not revenue neutral, then there is no reason that the "cheaper" price (younger people's) plans wouldn't stay the same and let the insurers just raise the 'higher" price (older people's) plans.
I believe since there is not going to be a 60 vote majority, it has to be passed via simple majority using budget reconciliation. It has to be revenue neutral to use budget reconciliation in my understanding. This is also why it has to be done in several steps, as each step has to be revenue neutral.


What we need is someone to come up with a travel insurance plan. Premiums are based on how you want to travel, where you want to sleep, what you want to eat and drink, when you want to travel and what kind of activities you want to do. When that is modeled out so everyone is happy, we can model health insurance after that. Until then, we're all stuck with 2 weeks with a timeshare in Antarctica in July.
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