ACA, Subsidies and Better off Americans (which means many FIRE)

[nun]

My net work is over a million, but most is in real estate and tax deferred funds so for a couple of years I lived mostly on savings and my tax returns had my income below the Federal poverty level. So when I applied for ACA I was put on Medicaid. I refused this as I had access to ex-employer health insurance at the full premium....I was then offered a 95% subsidy on the premium.

The US spends roughly twice as much per capital on healthcare as any other Western nation. That is a fact that no amount of re-organization will solve.

Healthcare is going to be used by practically everyone so it should be paid for by taxation. Insurance is the wrong funding method for an virtual certainly.....I like the Medicare and Medicaid models.

 

[samclem]

Healthcare is going to be used by practically everyone so it should be paid for by taxation. Insurance is the wrong funding method for an virtual certainly.

It's far too simplistic. Housing is also going to be used by practically everyone--should it be paid for by taxation? Food? Clothing? Yes, I recognize the differences, and so do those who repeatedly make this argument. So, it would be best to spell them out, or just leave this line of argument alone. To say that "no amount of re-organization" can address the cost of US healthcare is just not accurate. I assume you favor a single payer system? That would be a reorganization. Do you think the costs would be the same?

 

[Texas Proud]

My net work is over a million, but most is in real estate and tax deferred funds so for a couple of years I lived mostly on savings and my tax returns had my income below the Federal poverty level. So when I applied for ACA I was put on Medicaid. I refused this as I had access to ex-employer health insurance at the full premium....I was then offered a 95% subsidy on the premium.

The US spends roughly twice as much per capital on healthcare as any other Western nation. That is a fact that no amount of re-organization will solve.

Healthcare is going to be used by practically everyone so it should be paid for by taxation. Insurance is the wrong funding method for an virtual certainly.....I like the Medicare and Medicaid models.

We are not quite twice all of them... you have to get down to 12th (which is Canada) to get to half....

But, the interesting thing that I just saw is that the gvmt pays more per capita than most countries pay in total!!! Yes, the gvmt is paying a lot of money.... Looks like only Norway is paying more per capita from the gvmt... WOW... we really are not getting our moneys worth...

 

[daylatedollarshort]

We are not quite twice all of them... you have to get down to 12th (which is Canada) to get to half....

But, the interesting thing that I just saw is that the gvmt pays more per capita than most countries pay in total!!! Yes, the gvmt is paying a lot of money.... Looks like only Norway is paying more per capita from the gvmt... WOW... we really are not getting our moneys worth...

Just curious, do you know if that is per capita of people with health insurance in the U.S. or per capita in the total U.S. population? The U.S. still has around 29 million people who do not have any health insurance, so if the per capita numbers include the U.S. uninsured, the per capita costs for those with insurance would likely be even higher than the numbers in the OECD chart.

 

[GTFan]

I will say that I was surprised to learn of some people who do not have insurance...

At the food and clothing pantry I volunteer at most of the staff don't have insurance. These are smart folks but they say it's too expensive for what they get and just pay cash for services and the tax penalty instead. They are in their 50s/60s and I really can't blame them when I hear quotes of $700-800/mo. for crappy Bronze plans - they've done the math and realize they'll be paying a lot for very little in return. I believe that this is because they don't have a ton of non-protected assets at risk (i.e. outside of 401ks/IRAs and their houses).

Worst case they file for medical bankruptcy or rely on charity just like everyone else, which is probably not a bad line of thinking given their situation and the current sad state of the marketplace.

 

[Texas Proud]

Just curious, do you know if that is per capita of people with health insurance in the U.S. or per capita in the total U.S. population? The U.S. still has around 29 million people who do not have any health insurance, so if the per capita numbers include the U.S. uninsured, the per capita costs for those with insurance would likely be even higher than the numbers in the OECD chart.

No... got it from Wiki...

https://en.wikipedia.org/wiki/List_of_countries_by_total_health_expenditure_per_capita

 

[Texas Proud]

At the food and clothing pantry I volunteer at most of the staff don't have insurance. These are smart folks but they say it's too expensive for what they get and just pay cash for services and the tax penalty instead. They are in their 50s/60s and I really can't blame them when I hear quotes of $700-800/mo. for crappy Bronze plans. They also don't have a ton of assets at risk and will probably depend on Social Security for retirement.

But if they are making so little, then they should be getting a pretty good credit to help pay for that premium...

I just looked... in 2015 my crappy bronze plan cost me $820 per month... but after credit it was about $200.... family of 4... so I do get more credit...

I just did an estimate on what it would cost me and DW... with $40K income it was $273 for a silver plan.... they did not show any options... I am sure you can get them if you go to healthcare.gov....


So people who are saying $900 per month are not taking into account the ACA credit OR they are making a boatload of money....

 

[travelover]

......... The claim that it takes $1 billion to bring a drug to market is just ridiculous. ......

I was in the auto business, and I can say that it does take a billion dollars to bring a new model to market. Yet, somehow a new car is affordable for most, one can transparently shop brands and dealerships to get the best price and while hot sellers have lower discounts, the price of a hot seller does not go up 10 fold "because we can". Throwing out numbers that seem incomprehensible in the context of an individual's finances, is just a cheap trick.

 

[nun]

We are not quite twice all of them... you have to get down to 12th (which is Canada) to get to half....

Yep, that's why I said "roughly half".

But, the interesting thing that I just saw is that the gvmt pays more per capita than most countries pay in total!!! Yes, the gvmt is paying a lot of money.... Looks like only Norway is paying more per capita from the gvmt... WOW... we really are not getting our moneys worth...

Yep the US system is very expensive and to make things worse the US has a lower life expectancy than most of the countries on the expenditure graph you posted. But if you do have access to good health insurance in the US and can afford the high cost you are going to get excellent care. One obvious way to reduce the amount of public funds spent by the US on healthcare would be to allow Medicare to negotiate drug prices.

 

[gauss]

Auto market is much closer than health care market to the Economic abstract concept of a "perfect market"



Sent from my LGLS751 using Early Retirement Forum mobile app

 

[travelover]

.......... One obvious way to reduce the amount of public funds spent by the US on healthcare would be to allow Medicare to negotiate drug prices.

And that is the crux of the problem. There is no actual political will to take the courageous steps to tame the monster that treats elected officials so well.

 

[Neill]

They are in their 50s/60s and I really can't blame them when I hear quotes of $700-800/mo. for crappy Bronze plans - they've done the math and realize they'll be paying a lot for very little in return.

Why are bronze plans crappy? I can afford any plan I want. I will never qualify for a subsidy. I chose to buy the bronze HSA plans because I think it makes sense to pay for as much of the medical care for my family myself and buy protection for something I couldn't really afford.
The only reason I might complain about bronze plans is they are forced to cover stuff I would rather not have covered (pediatric dental, wellness visits, addition treatment etc).

 

[Mr._Graybeard]

Auto market is much closer than health care market to the Economic abstract concept of a "perfect market"

Yes, the health care infrastructure is more like the railway system of the 19th century, building with the support of government (through tax-exempt bonding and nonprofit status) and then charging whatever the traffic will bear.

 

[Sojourner]

Yep the US system is very expensive and to make things worse the US has a lower life expectancy than most of the countries on the expenditure graph you posted.

Japan spends less than half per capita of what the U.S. does on health care, yet it has the highest life expectancy of any country. It's mind boggling that the richest and most innovative country in the world can't come up with a sensible way to address this.

Even Chile has a higher life expectancy than the U.S., and they spend only $1,749 per capita on health care vs. $9,450 here in the states! Shameful.

 

[gerntz]

I think that part of our drug cost issue is our patent system that allows exclusivity of sales during patent life & thus high prices while other countries won't pay that price or allow generics so the price of same drug is much lower. Of course same patent law fosters innovation which is why so many drugs originate here.

The net of that to me is if countries use generics to evade our patents or the US drug companies give them lower prices, then we should charge such countries an import duty on other stuffs to compensate & put that money into health care. They want to start a tariff war for taking advantage of US practices, so be it.

Another part is the liability law that punishes companies who are trying to due the right thing of innovating. That not every possible negative outcome can be tested or anticipated isn't reason to be able unload on the companies. It's another thing when when companies hide negative results.

 

[ShokWaveRider]

Healthcare is going to be used by practically everyone so it should be paid for by taxation. Insurance is the wrong funding method for an virtual certainly.....I like the Medicare and Medicaid models.

At last some sense......

 

[nun]

I think that part of our drug cost issue is our patent system that allows exclusivity of sales during patent life & thus high prices while other countries won't pay that price or allow generics so the price of same drug is much lower. Of course same patent law fosters innovation which is why so many drugs originate here.

For every US company like Pfizer there's a European company like GSK, Bayer or Sanofi doing similar research and the costs or drugs in Europe are no where near as high as in the US. So there is world class research and drug innovation outside the US. I think US pharma has done a good PR job convincing us that the current US cost structures are necessary for innovation and good care, much like the rest of the US healthcare industry which is part of the reason why the US pays so much more than other countries for an arguably poorer system.

 

[Neill]

For every US company like Pfizer there's a European company like GSK, Bayer or Sanofi doing similar research and the costs or drugs in Europe are no where near as high as in the US. So there is world class research and drug innovation outside the US. I think US pharma has done a good PR job convincing us that the current US cost structures are necessary for innovation and good care, much like the rest of the US healthcare industry which is part of the reason why the US pays so much more than other countries for an arguably poorer system.

So these companies are selling drugs at much cheaper prices in the US than the American companies? I don't think so.
Many other countries are fixing the costs of drugs. I think the argument is that any country not fixing the prices of drugs will likely be paying for some of the countries that do. Our regulatory burden is very high in the US for drugs and devices. There are plenty of drugs in Europe unavailable to the US because they haven't gotten though the regulations. Hell I think there is quite a bit of food we don't allow here that's eaten in large quantities int he rest of the world.

 

[travelover]

.........I think the argument is that any country not fixing the prices of drugs will likely be paying for some of the countries that do. ..........

I don't buy this. We never agreed to subsidize other countries' drug prices. Why would this be allowed?

 

[Neill]

I don't buy this. We never agreed to subsidize other countries' drug prices. Why would this be allowed?

Let's divide a drug price into two portions. Lets say the pill costs $100 of which $70 is development costs and $30 is manufacturing costs for the pill.
The drug company came up with the $100 cost based on how long they can sell it in the market. Now the UK says you can only sell that drug for $50 in the UK (the UK is supposed to be one of the most controlled markets).
On a day to day basis they are still making a profit making a pill for $30 and selling it for $50 in the UK. It's only putting a small dent in development costs though. They won't abandon that market in the UK because it makes money to offset costs but the prices likely have to be higher elsewhere right?

 

[REWahoo]

Let's divide a drug price into two portions. Lets say the pill costs $100 of which $70 is development costs and $30 is manufacturing costs for the pill.

Don't forget about marketing/advertising costs.

 

[nun]

I don't buy this. We never agreed to subsidize other countries' drug prices. Why would this be allowed?

Frankly the US does subsidize the cost of drugs in other countries. European health systems regulate drug prices because market forces haven't worked well in healthcare to keep the costs down, as is evident in the US system.

 

[Beldar]

I just did an estimate on what it would cost me and DW... with $40K income it was $273 for a silver plan.... they did not show any options... I am sure you can get them if you go to healthcare.gov....

So people who are saying $900 per month are not taking into account the ACA credit OR they are making a boatload of money....

Yes, going off of COBRA this month I was SHOCKED at the $1100 / month subsidy DW & I will receive for a Silver plan next year, if we manipulate our MAGI to $40K or less.

I'm not ashamed to say that I will play by THOSE rules until the system changes.


_B

 

[nun]

So these companies are selling drugs at much cheaper prices in the US than the American companies? I don't think so.
Many other countries are fixing the costs of drugs. I think the argument is that any country not fixing the prices of drugs will likely be paying for some of the countries that do. Our regulatory burden is very high in the US for drugs and devices. There are plenty of drugs in Europe unavailable to the US because they haven't gotten though the regulations. Hell I think there is quite a bit of food we don't allow here that's eaten in large quantities int he rest of the world.

European and Japanese drug approval standards are at least as high as those used in the US. In Europe the drug approval path is more complicated than in the US because of both EU and national agencies so I don't think the approval mechanisms is a big part of the drug cost differences. I think those come down to price controls in Europe as the Governments are not afraid to regulate a market when it is not free enough to provide value to the customer.

 

[nun]

Yes, going off of COBRA this month I was SHOCKED at the $1100 / month subsidy DW & I will receive for a Silver plan next year, if we manipulate our MAGI to $40K or less.

I'm not ashamed to say that I will play by THOSE rules until the system changes.


_B

I was amazed that because my individual income was around $12k/year I had a choice between $0 Medicaid premiums or getting a $475/month check towards my ex-employer's health insurance full premium of $500/month. I chose the check for continuity of coverage and because my ex-employer's plan is a Cadillac one.