The Health Insurers have already won

[M Paquette]

I suspect that if the policymakers want everyone to have insurance, and without some effort to contain costs or alter underwriting groups that insurance may cost as much as or more than the gross income of many people, then we will see cases where folks will need to be subsidized.

In my case, the quote for a family insurance plan that we could get in spite of our pre-existing conditions comes to about 24,000/year. That's considerably more than the gross pay of someone at the poverty level. The choice between violating the proposed law and providing food and shelter for ones family isn't a good one.

Now, I know that the Randian rugged individualist would never let themselves get in such a situation, but out in the real world bad things happen. Folks might not be able to get a high paying job with insurance. They might not be capable of learning the skills needed, for example. (This isn't Lake Wobegone. Some folks are just below average.) We can be altruistic, which I know some view as a flaw and not a virtue, and as a society help out, or we can go the 'enlightened self-interest' route, say the heck with them, I got mine, and ignore the difficulties of others.

This is a choice we get to make for the direction of our society.

 

[ERD50]

Some Numbers....

In my case, the quote for a family insurance plan that we could get ..... comes to about 24,000/year. That's considerably more than the gross pay of someone at the poverty level. ...

After talking about vouchers, I did a small bit of research to see what a voucher for everyone would actually come to. Found several sources refer to the US spending ~ $2.2T (2.2x10^12), or $7,400 per capita, which all adds up with a 300M population.

So that means (unless a public option actually does lower costs substantially), that each and every person would be need a $7,400 voucher. Family of four would be $29,600. That is a huge amount to pay, if we say that those who can afford to need to pay their way. My current contribution plus company contribution is far below that ( ~ $10K to cover 2 to X family members).

But bottom line (unless I got the math wrong), that is exactly what we are paying (on average), one way or the other. Since I paid the same rate for a family of 5 that a person with a family of two would pay, I've apparently been "subsidized" by my company (and fellow workers) for a long time.

If that number was really transparent to people, I think something would change for the better pretty quickly. But it seems to be getting buried in the debt, making it very abstract for most.

Martha, you have mentioned that "pay as you go" is part of the current proposals. I haven't heard much about that - do you have any references you could share, I'd probably miss it if I looked through 1000 pages of multiple proposals? If that is the case, it should be brought up more as it is critical, IMO. I'd need to dig up the link, but I read a Q/A about spending "triggers" to hold down costs on Medicare, and it struck me as a lot of smoke-mirrors. I'm concerned that any "pay as you go" might be just a sham once we see the details. But I can hope. TIA.

-ERD50

 

[ziggy29]

So that means (unless a public option actually does lower costs substantially), that each and every person would be need a $7,400 voucher. Family of four would be $29,600.

If someone assumed the same price per person, true. But the way health insurance is priced today, a single adult with five children can often get a lower premium than a married couple with no children.

I know that's true in the plan where I work. The "Employee plus children" rate (regardless of the number of children) is considerably cheaper than the "employee plus spouse" option. So to some extent we'd have to see if this reform changes to a true "per person" model or if there are just a few different tiers for "individual", "individual and kids," "individual and spouse" or "individual, spouse and kids."

In reality for many people, the health insurance business heavily subsidizes large families.

 

[ERD50]

If someone assumed the same price per person, true. But the way health insurance is priced today, a single adult with five children can often get a lower premium than a married couple with no children.

Exactly - and isn't this just adding to the distortions of what HC is costing us, and making it harder to see "solutions"?

Maybe vouchers could/should be based on age (they would still need to add up to ~ 2.2T)? But I would think that covering 10 children would be the same whether they are in two families of five kids each, or 10 families with one kid each.

-ERD50

 

[M Paquette]

But bottom line (unless I got the math wrong), that is exactly what we are paying (on average), one way or the other. Since I paid the same rate for a family of 5 that a person with a family of two would pay, I've apparently been "subsidized" by my company (and fellow workers) for a long time.

Yup. What you are seeing there is the implicit subsidy in pooling risk over the group of employees participating in your insurance. The healthy 24 year old single guy who hasn't seen a doctor since he moved out from home in Accounting is putting in the same amount of cash as the 64 year old divorced chain-smoker over in Sales.

Looking at this on the current year only the 24 year old is subsidizing the 64 year old. Note however that the 64 year old has been buying insurance for 40 more years than the 24 year old, and 40 years ago was likely subsidizing someone else. The actuaries at insurance companies are well aware of this.

Now, if you don't like the idea of the implicit subsidy in this setup, we could alter the actuarial model to look more like long term healthcare, a vertical one-subscriber-over-many-years model instead of the horizontal all-subscribers-in-the-same-age-bracket model. Payments and profits would stay the same for group plans, but now it would look like your younger self had subsidized your older self, which some folks find more acceptable.

Ideally we'd make insurance portable instead of tied to employers to make a vertical model appear more 'real' to customers. This would also allow individual buyers to have the same constant (outside of healthcare cost inflation) rate, rather than being bumped periodically into more expensive age brackets. (Think of it as whole life insurance for healthcare. )

 

[IndependentlyPoor]

Now here ia an idea that maybe both liberals and conservatives can support: more competition by eliminating health insurer's anti-trust exemption.

I wasn't aware of the 1945 McCarran-Ferguson Act. Dang. No wonder we have such a mess on our hands.

This article is from a pretty liberal site, but I looked through it and didn't find anything incendiary. I wouldn't want to be responsible for one of our members having a coronary.

Conyers, Leahy Introduce Bill To End Health Insurers' Anti-Trust Exemption | Crooks and Liars

 

[Gotadimple]

If someone assumed the same price per person, true. But the way health insurance is priced today, a single adult with five children can often get a lower premium than a married couple with no children.

I know that's true in the plan where I work. The "Employee plus children" rate (regardless of the number of children) is considerably cheaper than the "employee plus spouse" option. So to some extent we'd have to see if this reform changes to a true "per person" model or if there are just a few different tiers for "individual", "individual and kids," "individual and spouse" or "individual, spouse and kids."

In reality for many people, the health insurance business heavily subsidizes large families.

Ziggy,
I would think that if we aren't able to change the payment model (piece work), then the tiers you noted will still be there. If on the other hand there are no pre-existing conditions and no one can be cancelled and the number of people coming on to plans is significantly high, the actuaries may be able to devise a single rate per person.

Right now in most states, the age tier is the driver in premium differences, that is, in a plan like yours the insurance company has received info about the average age of employees and thus uses that to construct the rates at the different tiers. Then, your employer is also contributing to the plan and that makes the difference in the premiums as well.

-- Rita

 

[ziggy29]

Right now in most states, the age tier is the driver in premium differences, that is, in a plan like yours the insurance company has received info about the average age of employees and thus uses that to construct the rates at the different tiers. Then, your employer is also contributing to the plan and that makes the difference in the premiums as well.

No wonder age discrimination is so rampant....

 

[Gone4Good]

I agree. Isn't it frustrating how opposition to our wars seems to have vanished in the last few months? Hardly a peep from from the usual sources.

Opposition to war is directly proportional to the body count.

We've seen much lower casualties in Iraq, which has driven opposition down. But now Afghanistan is heating up, and so is the opposition.

 

[oldtrig]

I talked to Doctor friend of mine last week. I asked him had he seen any slowdown in people coming to his office since the economy started sliding. He said no, as a matter of fact he has been busier than in years past. He said that 40% of the people that came to see him were trying to get on disability. They think that is the out when they lose their jobs and have no health insurance. He said he really feels for these people. They are in the panic stage. We are talking about 40 year olds with families that have no job, no money and no health insurance. What is the answer, I wish I knew. I do know I don't want the government in this. oldtrig

 

[youbet]

My problem with this statement is that it does not include people like me (who may be a significant %, but I can only speak for myself).

A) I don't think "everything is OK" - I want reform.

B) My entire family has had continuous HC coverage.

C) That doesn't man that I think the current proposals are good.

D) Even though I have coverage, I realize I could lose it, I realize others can fall through the cracks. So I want reform, even though "I have mine".

I think you over-simplify the situation.

-ERD50

My situation and feelings fit here too. I've always had coverage. There have been no health care issues within my extended family despite the fact that we cope with some significant,chronic health issues. Yet, I'd like to see reform that addresses the need for continuous, uninterrupted coverage for all. But I'd like to see it done in a way that does not reduce the incentive for folks to work hard to have and pay for coverage. And I'd like to pay for it real time, up front, making whatever sacrifices we need to right now. No more shams like Medicare where we're enjoying medical coverage in retirement but piling the costs up for the next generation to pay.

I'm actually insulted when the politicians keep repeating the anecdotal stories about hardship cases resulting from today's mishmash healthcare system. I know there are serious issues, despite not having had them myself. Stop telling me the problems again and again and again and again. Tell me the solution and be honest in sharing the facts. Be clear on costs, who will benefit and how we will pay for it up front. Worry less about political expediency and deliver some of the "transparency" promised during the campaign.

Now, is that asking too much?

 

[youbet]

Opposition to war is directly proportional to the body count.

I'm sure there is some truth to that. But I'm noticing, and this is admittedly anecdotal, some folks who were strongly against our involvement in Iraq and Afghanistan last year staying quiet now as a show of support for the current administration. Example: where there was a candidate's bumper sticker and an anti-war bumper sticker on the same car, I now see only the candidate's bumper sticker and a little leftover adhesive from where the anti-war bumper sticker used to be. My feelings about these "military engagements" hasn't changed a bit with the change in administration.

To relate this to topic, I think this kind of "show of support" attitude bleeds over into the healthcare debate and enforces the tendency to have emotional, subjective "selling" of proposals instead of hard numbers and facts presentations.

 

[Sevo]

I'm actually insulted when the politicians keep repeating the anecdotal stories about hardship cases resulting from today's mishmash healthcare system. I know there are serious issues, despite not having had them myself. Stop telling me the problems again and again and again and again. Tell me the solution and be honest in sharing the facts. Be clear on costs, who will benefit and how we will pay for it up front. Worry less about political expediency and deliver some of the "transparency" promised during the campaign.

Now, is that asking too much? [/QUOTE]

+++++++ the only thing I could add is that every one in the ruling Class and their families should have to be part of the same system

 

[Martha]

I'm actually insulted when the politicians keep repeating the anecdotal stories about hardship cases resulting from today's mishmash healthcare system. I know there are serious issues, despite not having had them myself. Stop telling me the problems again and again and again and again. Tell me the solution and be honest in sharing the facts. Be clear on costs, who will benefit and how we will pay for it up front. Worry less about political expediency and deliver some of the "transparency" promised during the campaign.

Now, is that asking too much?

I think the stories have to keep coming because there are far too many people who still don't know that people actually do fall through the cracks. It does get tiresome, but I understand the need. I still hear people say that people get the care they need it just isn't paid for. Heck, now recent research is reporting that it might not be 18,000 a year dying because of lack of ability to pay for care, but instead be closer to 45,000.

The next issue is more difficult. Part of the problem is that reform is a process so what is shared and by whom? You can find a lot of information if you look but things keep changing. But I do agree with what you say about the lack of meat in what we hear. The rhetoric runs too high, with way to much time spent on the same things over and over without talking about the details. For example, we hear over and over about public option or no public option but very little meat on why one is or is not important. But it seems that the job of the press isn't to educate, it is to report controversy. Where is that guy who ran for president with all the charts? We need some charts.

 

[IndependentlyPoor]

OK, OK. I promise not to post any more anecdotes. I did not intend to offend anyone. Peace.

Let me explain why I posted two ugly stories. There is a meme about that goes like this:

• We have the best health care system in the world.
• The free market is always the best solution.
• Government action is always counterproductive.

I think the first of these is a form of denial. The first step toward improvement is acknowledging a problem. My personal anecdotes were meant to emphasize that we have a difficult and serious problem, a problem so difficult that the solution is likely to be painful, and so serious that denying it is not an option.

the only thing I could add is that every one in the ruling Class and their families should have to be part of the same system

Now that is something I can agree with.

 

[Texas Proud]

Opps... double...

 

[Texas Proud]

+++++++ the only thing I could add is that every one in the ruling Class and their families should have to be part of the same system

And this is one of the problems of getting insurance for everyone... (not talking about reform, because that is not most of what is being proposed)...

Why shouldn't the ruling class be able to have a better system? It seems that there are a lot of people who want everyone covered and everyone to have the same level of health care... I am not one...

I would love to see some kind of program that covered everyone.. but not every possible outcome... I saw on one of the TV shows today where a CEO said that when he was young, it was called major medical... ie, you were covered for any MAJOR medical bills... you were still responsible to cover your minor medical costs.. the plan my small company has is like a major medical since our deductible is $4,000... (our company chips in $3,500 of that, so in reality it is $500 to me)... but our cost are still around $10,000 for a family...

And, I could be in the situation people mention if I lost my job... and I have seen where claims were denied because of some minor issue that made no sense..

But back to my original point... IF I were willing to pay more for a better plan... why should I not be able to purchase this better plan

 

[Texas Proud]

I think the stories have to keep coming because there are far too many people who still don't know that people actually do fall through the cracks. It does get tiresome, but I understand the need. I still hear people say that people get the care they need it just isn't paid for. Heck, now recent research is reporting that it might not be 18,000 a year dying because of lack of ability to pay for care, but instead be closer to 45,000.

I am usually skeptical about the claims of X dying because of lack of health care (or over eating etc..)... why?, because I am sure there are a good number of these people who would have died even with medical care...


If you look at the stat, how many people die in a hospital because of errors.... well, that is probably a much closer number because they were living, someone did something to them that was not supposed to happen (or they caught some bug they would not have been exposed to).... and now they are dead...

The other is... well, he/she was sick.. or had a heart attack, or the swine flu... (you pick)... and now he/she is dead... if he got medical treatment, he/she would be alive.... but alive for how long? Minutes? Days? Years?

And who came up with the number? Someone who had an ox to gore? Or an independent source?

For the hard part... how many of these people would be saved if we paid trillions of dollars I am sure there are some, but I doubt it would be even close to half.... just my opinion... (remember, there are people who hate doctors... mostly men... so providing access does not mean they will go)....

 

[youbet]

I think the stories have to keep coming because there are far too many people who still don't know that people actually do fall through the cracks. It does get tiresome, but I understand the need. I still hear people say that people get the care they need it just isn't paid for. Heck, now recent research is reporting that it might not be 18,000 a year dying because of lack of ability to pay for care, but instead be closer to 45,000.

I guess I'm more of a cynic. I recall a recent press conference at the White House. A reporter asked pressing questions about costs and potential tax increases. The man at the podium, who shall remain nameless to avoid this becoming a political thread, berated him and accused him of not caring about people. Then the speaker went on telling anecdotal stories about folks with terrible, terrible issues with health care. The cost questions went unanswered. Yet, the concern over yet to be defined costs and payment schemes is a major factor with the non-believing crowd.

I don't want political expediency and the concern of winning/keeping votes for the next election to influence what our healthcare reform looks like any more than it absolutely has to. I believe the telling and re-telling and telling again of these anecdotal stories is frequently done so that the details and issues of the various proposals are discussed only minimally. I say let's put it out on the table and all have a good look at it in the light of day.

 

[IndependentlyPoor]

But back to my original point... IF I were willing to pay more for a better plan... why should I not be able to purchase this better plan

Agreed, but...

• I don't think taxpayers should be subsidizing that better plan by making it tax-free, unless you make all health care expenses tax deductible.
• In the mega-corp where I worked, the executives had a great plan that was heavily subsidized by the company. The rest of us couldn't buy into it for any price. I think this is pretty common.
• The congressional and senatorial plans are like employer plans and heavily subsidized. Plus, their employer is not likely to file bankruptcy to get out of employee commitments.

I don't think we are as far apart on this topic and it might seem.

 

[Gone4Good]

I think the stories have to keep coming because there are far too many people who still don't know that people actually do fall through the cracks.

Yup. I, for one, was truly astonished when I saw video of people lining up on a rainy day to get into a free clinic that was set up on some old fair ground lot. Some of the services were provided in animal stalls.

The ~80% of us with good insurance have no clue how the other quintile lives.

 

[youbet]

+++++++ the only thing I could add is that every one in the ruling Class and their families should have to be part of the same system

Interestingly, it's not just the rich and famous trying to avoid change. Some blue collar unions have negotiated health care packages that they definitely want to keep untouched while us plebians have to go with the crowd.

I believe it's a group of WVa coal miners (I'll research later) who receive a $24k/yr health package who are are sending up howls at any attempt to tax their "Cadillac" level benefits.

That leaves the administration in a predicament. When they propose a tax on the Cadillac benefits CEO's frequently receive, they're also going after coal miners and unions. Touchy, touchy...........

 

[youbet]

The ~80% of us with good insurance have no clue how the other quintile lives.

Nope.... YOU may not know how the other quintile lives. I do. So, let's stop talking about the current status and detail the proposals (with a little less regard to political expediency if you please) and get on with it. And let's pay for it as we go so we don't create another group of second class citizens by forcing the cost onto the next generation.

 

[Gotadimple]

Where is that guy who ran for president with all the charts? We need some charts.

Well, right now he is on tv, repeating what he said at the joint session to Congress.

But you're right, he doesn't have the specifics. Unlike other major legislation, this administration has left the details to Congress, and its frustrating. He knows what he wanted to have legislated, but falls back on his background as a community organizer, by letting others come up with the details that they can buy into. Unfortunately, is solution by committee and not very palatable.

Any solution, though, will be unpalatable to someone, so, we deal with the Gordian knot.

-- Rita

 

[youbet]

Any solution, though, will be unpalatable to someone, so, we deal with the Gordian knot.

-- Rita

I learned this managing people........

If you screw 'em all, they get over it. If you screw some and do well by others, those screwed will hate you and fight you to the grave.

So....... why not propose a "one plan for all - including Congresscritters and vote generating unions" and detail out the cost and coverage and cutover plan and go with it? Right now we're spinning our wheels over who gets screwed and who gets icecream for dessert.

Frankly, I could be talked into a Medicare for everyone scheme as long as we're allowed to buy private supplemental policies (just like seniors on Medicare), everyone has to do it and we pay for it 100% as we go. Admittedly, this is a pretty neutral plan for me. The cost of Medicare and a supplement would be about the same as I'm paying for retiree coverage now and the benefits would be similar. Plus, I'll be on Medicare with a supplement in 3 yrs anyway.