Speaking of ACA

[NW-Bound]

Quote:

Originally Posted by copyright1997reloaded ... Many here want to blame the insurance companies. While I am not a fan of them, I seriously doubt that is the magical fix to the problem...

It is easy to beat up the insurance company, when people look at the premium of $20K/year (out-of-pocket plus subsidy) yet they use less than $1K with a few doctor office visits each year.

But, but, but the moment you have cancer or need some surgeries, the hospital cost escalates to a few $100K in no time. One of the clauses of ACA is that there's no lifetime limit on benefits. My Pre-ACA private insurance had a limit of $1 million, and I thought that was plenty.

Obviously there are plenty of cases that cost more than $1M, else there would not be a law lifting that limit. Right?

Now, just one person costing $1M in the hospital, then there goes the premium of 49 other people paying $20K each.

To reduce the cost of healthcare, we need to look at what the hospital charges. Not my family doctor. Not my lab service that does blood tests. They are cheap.

[Packman]

Quote:

Originally Posted by NW-Bound To reduce the cost of healthcare, we need to look at what the hospital charges. Not my family doctor. Not my lab service that does blood tests. They are cheap.

Looked up the latest profit margin of HCA (Hospital Corporation of America) - 7.7%. Perhaps they waste money, perhaps they pay lawyers a lot, perhaps they have creative accountants, but that bottom line profit is about what investors expect.

The real answer to the insane cost of healthcare, is that 5% of the people use 90% of the healthcare costs, and that is growing as we all live longer. The only humane way to fix that is to spread the costs among all people and have the administration costs contained (a one payer system). The first part of that was tried with the original ACA and eliminated by executive order, and the second is pretty unlikely at this time.

[NW-Bound]

I cited the profit margin of United Healthcare in earlier posts because it is the largest insurance company, and the first that came to my mind.

But I now recall that UNH had limited participation in ACA. It was not in the ACA market at first, then participated for 2 years if memory serves, then abruptly dropped out in 2017. I knew this, because my ACA policy was with them when they were in the market.

The year they dropped out, all other insurers also did, and for a while the Phoenix Metropolitan area made the national news when it looked like we were not going to have any insurance. None. Finally, only one signed up, and the coverage was lousy. We lost access to all of our doctors. Good thing we were not sick the last few years.

Yet, when I looked at UNH financial data, it has been doing very well. In the past 4 years, sales increased 44%, while profits went up 2x. No wonder the stock price beats the S&P, but it's not because of ACA.

I should have bought this stock rather than the biotech ETFs that I still hold.

[NW-Bound]

Quote:

Originally Posted by Packman Looked up the latest profit margin of HCA (Hospital Corporation of America) - 7.7%. Perhaps they waste money, perhaps they pay lawyers a lot, perhaps they have creative accountants, but that bottom line profit is about what investors expect...

Many hospitals are non-profit organizations. Because they have no shareholders, I guess they only answer to the board of trustees as to how they spend what they take in.

[samclem]

It seems very clear that the cost of actually providing the health care services has got to grappled with. There are several ways to do this. The admin costs aren't what make overall US spending on health care so high. Just re-arranging the payment scheme and stuckee (patient? employer? taxpayers?) to allow the health care service costs to continue to escalate is absolutely no answer, but it seems to be what gets talked about the most.

[Animorph]

Back maybe four years ago when DW was still working, Megacorp estimated that they spent $17k to insure both of us with a normal low deductible plan. We paid something like $50-$100/month on top of that.

When we first enrolled with an ACA plan we paid $10k/year with no subsidy. It was a high deductible HSA plan, but still much cheaper than the $20k I was expecting and budgeting.

Now we're up to $21k/year for the same HSA high deductible insurance. The prices for the first few years of ACA were unsustainable when lots of healthy people did not buy in. Insurance companies were unsure they could get enough healthy people to support the prices they thought people would pay. So they dropped out of the marketplace. But, compared to $17k+$1.2k four years ago, $21k is still pretty reasonable. I'd expect these rates to stay relatively stable, increasing with inflation. If ACA remains in place and more healthy people don't drop out.

If ACA is repealed I can't imagine what a replacement would look like, if anything could even be agreed on. I expect if we (actually just DW after this year) were able to qualify with our pre-existing conditions our rates within a healthier insurance pool would be somewhat lower. If we had to go into a high-risk pool run by the state I'd expect the rates to go higher. And rather ironically we would then be on "government insurance" I assume.

As far as replacement insurance, I think a few of the basic questions are:

How will insurance pools be created? Currently your j*b determines your pool. Does that make any sense at all?

How will we pay for people without insurance? Use to be the hospitals had to absorb that cost, increasing their prices. That's supposed to be better with ACA, and some of our hospitals are in better shape now, but there's still no universal coverage. How many people will go without insurance if it isn't subsidized? What is the cost of treating those people for $0 (uninsured) vs. having them pay something they can afford (subsidized insurance)?

How will healthcare prices be negotiated with the providers? We're all aware of the ridiculous list prices versus what the insurance company actually pays.

What will be covered? Something that didn't cover transplants would be cheaper, but then you get a bunch of people begging on the TV news for their Go Fund Me transplant account. Preventive healthcare? Is there a lifetime limit on benefits? Does the lifetime limit just throw people into the uninsured category until Medicare, if they make it that long? Under what conditions is hospice care acceptable?


If we spend $7k-$10k per person for healthcare on average in the U.S. (I see a range of numbers for this), unsubsidized health insurance plus out of pocket expenses will cost at least $8.4k - $12k per person per year. Not really far off from my current $21k + out of pocket for two people. Anything less than that and we'll have to figure out a new tax to pay for subsidies.

[marko]

Quote:

Originally Posted by ShokWaveRider With the sheer lack of action from those who can actually do something about HC in the USA, do you honestly blame this attitude?

I tend to be a 'follow the money' guy.

According to Mr Google: "U.S. health care spending grew 3.9 percent in 2017, reaching $3.5 trillion or $10,739 per person. As a share of the nation's Gross Domestic Product, health spending accounted for 17.9 percent."

That's a lot of motivation to keep that goose well protected and laying those golden eggs within the status quo.

It's a mess but I just don't see it getting straightened out in any of our lifetimes.

[NW-Bound]

+1

One person's expense is another person's income.

Spend, spend, spend...

Heh heh heh...


PS. Come to think of it, medical services are counted in the GDP, and contribute to its growth. How can we lose?

[neihn]

+1 - Marko, NW - I agree with you both - It is a big issue, however, I don't see it gets fixed in my life time nor my children's life time.

[MichaelB]

Quote:

Originally Posted by NW-Bound +1 One person's expense is another person's income. Spend, spend, spend... Heh heh heh... PS. Come to think of it, medical services are counted in the GDP, and contribute to its growth. How can we lose?

Well, that level of spending implies our economy suffers from a misallocation of capital. Looking at the 20 year spending trend and comparing it with other countries, the increased allocation has not produced a corresponding improvement in health. So, while it is GDP and income for some, it's economic value is questionable. That money might be better spent elsewhere.

In more practical terms, part of that spending involves a medical services provider billing us an amount it knows to be incorrect and will not collect,, followed by multiple additional invoices, before changing the amount and sending an invoice that can be collected. It then hires administrative support to manage that process and interface with related parties, such as the patient and the insurer. What other business does that?

[NW-Bound]

I was being sarcastic about the contribution to GDP.

Of course, the health service providers will not agree with us.

[NW-Bound]

But here's something to consider.

Just recently, it occurred to me there was a lot of talk that much of the high cost of health care in the US was due to serious diseases such as cancer. If so, does the extra money buy us anything?

I searched the Web, and what do you know, cancer patients have a better survival rate in the US than in all other countries. The report I found collected data from many countries, and said that the result was due to cancer being treated more aggressively in the US than elsewhere.

Now, whether the result is worth the extra cost is a lot harder to determine. But we do get something more out of that money.

[cathy63]

Quote:

Originally Posted by Animorph Back maybe four years ago when DW was still working, Megacorp estimated that they spent $17k to insure both of us with a normal low deductible plan. We paid something like $50-$100/month on top of that. When we first enrolled with an ACA plan we paid $10k/year with no subsidy. It was a high deductible HSA plan, but still much cheaper than the $20k I was expecting and budgeting. Now we're up to $21k/year for the same HSA high deductible insurance.

One difference is that corporate group coverage is not age rated, but most states do allow age rating for plans purchased through their exchanges. So a young person leaving a corporate plan will often get a price break when switching to an ACA plan, while an older person doing the same will suffer some sticker shock.

For our specific plan, a couple that is currently 63/64 pays 55% more than one that is 53/54. Looking at it year-by-year, I've found that about 1/3 of our premium increases have been age related and 2/3 not.

[ziggy29]

Quote:

Originally Posted by samclem It seems very clear that the cost of actually providing the health care services has got to grappled with. There are several ways to do this. The admin costs aren't what make overall US spending on health care so high. Just re-arranging the payment scheme and stuckee (patient? employer? taxpayers?) to allow the health care service costs to continue to escalate is absolutely no answer, but it seems to be what gets talked about the most.

We also have to talk about prescription drug prices. The US pays the most for its prescriptions in the world, by a wide margin -- sometimes, 10x or more what they are paying in Canada for identical medications. So I would suggest that at least one major problem is that drugmakers are making all their profits with massive markups on US consumers and "giving" their product away to the rest of the world.

Quote:

Originally Posted by MichaelB In more practical terms, part of that spending involves a medical services provider billing us an amount it knows to be incorrect and will not collect,, followed by multiple additional invoices, before changing the amount and sending an invoice that can be collected. It then hires administrative support to manage that process and interface with related parties, such as the patient and the insurer. What other business does that?

I have often wondered how much this cost shifting costs not only insurance companies but also the "bottom line" price because it takes a fair amount of infrastructure to keep billing someone who won't or can't pay, and selling delinquent accounts receivable to collections for pennies on the dollar.

[Aerides]

Perhaps also another aspect of cost is the copious testing that's become part of most diagnoses these days.

I read this piece recently, from an actual Doctor who is aware of the over-testing issue, and a fascinating story of how the tables were turned on him when he was caught up as the patient:

https://www.healthaffairs.org/doi/fu..._pub%3Dpubmed&

tl;dr, when you are sick or in pain, and they keep saying "eh let's check just in case" it's very hard to say no, and your $500 visit becomes a $9000 visit.

[NW-Bound]

Just a few days ago, I read something similarly about how doctors behave when they themselves become patients.

When their own life is on the line, doctors want overtesting and overtreatment just like layman patients.

[ziggy29]

Quote:

Originally Posted by Aerides Perhaps also another aspect of cost is the copious testing that's become part of most diagnoses these days. I read this piece recently, from an actual Doctor who is aware of the over-testing issue, and a fascinating story of how the tables were turned on him when he was caught up as the patient: https://www.healthaffairs.org/doi/fu..._pub%3Dpubmed& tl;dr, when you are sick or in pain, and they keep saying "eh let's check just in case" it's very hard to say no, and your $500 visit becomes a $9000 visit.

I have a friend who reported on FB just this morning that her doctor called her in the middle of the night (!!!) to tell her that her lab work had just come in and one of the numbers was dangerously high. She went in for an IV first thing this morning per the doc's recommendation, had the procedure, and it turned out the lab result was a false positive reported on her blood work and was actually normal.

The unnecessary scare aside, no doubt she will be stuck with the bill, especially if her deductible hasn't been met.

[ziggy29]

Quote:

Originally Posted by NW-Bound When their own life is on the line, doctors want overtesting and overtreatment just like layman patients.

They probably don't have plans with $7,000 individual deductibles.

[MichaelB]

Quote:

Originally Posted by NW-Bound Just a few days ago, I read something similarly about how doctors behave when they themselves become patients. When their own life is on the line, doctors want overtesting and overtreatment just like layman patients.

Here's a brand new study that reaches a different conclusion. From the abstract

Quote:

To do so, we compare the care received by a group of patients that should have the best possible information on health care service efficacy—i.e., physicians as patients—with a comparable group of non-physician patients, taking various steps to account for unobservable differences between the two groups. Our results suggest that physicians do only slightly better in adhering to both low- and high-value care guidelines than non-physicians – but not by much and not always.

Study here https://www.nber.org/papers/w26038

[copyright1997reloaded]

Quote:

Originally Posted by cathy63 One difference is that corporate group coverage is not age rated, but most states do allow age rating for plans purchased through their exchanges. So a young person leaving a corporate plan will often get a price break when switching to an ACA plan, while an older person doing the same will suffer some sticker shock. For our specific plan, a couple that is currently 63/64 pays 55% more than one that is 53/54. Looking at it year-by-year, I've found that about 1/3 of our premium increases have been age related and 2/3 not.

Even in non-community rated sates (where age can be a factor in price setting), there are ACA limits on the differential that are less than what would occur using actual cost data. That range (for most states) is 3:1, i.e. if a 21 year old was paying x, a 65+ person would be required at most to pay 3X. Note that the federal table allows for further discounts under age 21, e.g. age 16 would be .86x.

I know this for a fact as I created a ACA premium database "for fun" when the government site wasn't working. I was able to use ACA excel spreadsheets and created the database in under three hours - you could enter you state, age, and it would spit out non-subsided premium data for any state w/i the federal program. It utilized the federal (and special case states) to calculate premium differentials based on age.

Some states further limit: NY, VT do not allow age factor (at all). Mass had a 2x range limit. A few others use the 3:1 but have different curves (e.g. Utah).

As I stated in my earlier post, old and/or unhealthy adults get good deal under ACA (even w/o income subsidy) while younger, healthy adults pay more than they should. (In addition to taxpayers who pay for the low income subsidies.)