Posted on 04/18/2010 7:49:12 AM PDT by AJFavish
These programs are essentially risk pools with identifiable participants, predictable (actuarially) costs and predictable benefits, and the "insurance" companies serve as the administrators, taking a cut for their efforts. When the participants and covered reimbursements are increased, the insurance companies must pass along the costs to participants.
Legal requirements in the auto insurance industry (minimum cverage) have obviously increased some costs, but open competititon amongst insurers have allowed premiums to remain manageable, even for risky drivers, and auto insurers remain profitable. Auto repair businesses had to get more efficient and cost effective to keep gettng collision repair business.
These same things would happen in the health care industry, if they were ever given a chance. Tort reform might help, too, although I believe the high med mal premiums have helped weed out many bad doctors.
Yeah. No real good answers. I have (for the present) a high deductible MSA. We’re pretty healthy, so year to year we tend to sock away most of the money and save it.
I agree there is an issue with someone choosing not to buy health insurance and then signing up for health insurance and expecting a pre-existing condition to be paid.
However, consider another very real situation. An employee and his employer have paid health insurance premiums for over 20 years. The employee is diagnosed with cancer, is treated, and the cancer is in remission. The employer then has a “downsizing” resulting in the employee losing his job. The employee signs up for COBRA and pays the full health care premium for 18 months, the limit of COBRA coverage. The former employee has been unable to find a new job and must now move to an individual health policy but is unable to purchase one that will cover his “prexisting” cancer. Notice here, the individual has paid into the system. The problem becomes being forced to change policies due to the law limiting Cobra coverage to 18 months, not to any unwillingness of the employee to pay. In this instance the current system fails the individual while under a single payer system there would have been no issue.
I’m not in favor of a single payer government health care system, I just wanted to point out the fact that some people who pay into the current system are adversely impacted by pre-existing conditions even when they’ve played by the rules.
How can something be in a "condition" before it was in that "condition"?
They should be saying "existing condition". As in, "We won't insure anyone that comes to us with an 'existing condition'!"
My wife just said something that I haven’t thought of. What about people who are forced to get insurance but they can’t afford the co-pay or the charges they’ll get in the mail later on that the insurance didn’t pay?
And believe me, forced treatment is just around the corner.
I have a number of health problems I won’t go into. I have insurance despite my pre-existing conditions for which I pay a handsome premium. The coverage was awarded to me as part of COBRA from my last job (I was able to convert my group coverage to individual coverage). The coverage is not what I had when I was employed, but it’s fair. The coverage pays 80% after deductibles and with co-pays. Considering that I could have wound up with no insurance, I can’t complain.
Now when Obama Death Care takes effect and insurers will be required to cover everyone with pre-existing conditions, what will happen to my coverage? As far as I know, there is no provision in the HCR law that sets premium prices or levels of coverage. So...faced with having to cover so many more risks, will the insurance companies raise my premiums (and maybe yours also) and/or provide reduced coverage to us with pre-existing conditions? Will my insurance premiums double or triple and/or will my coverage be at, say, 40% instead of 80%? Seems to me that with all that extra risk, the insurance companies, in order to stay afloat, are going to have to do something to offset the losses they will sustain by insuring the infirm.
There is also this notion that government should be able to tell private industry how and with whom to do business. Someone want to tell me where in the Constitution is government allowed to dictate to business?
Yes, and some minor health issues are statistically correlated with later major health issues, which is why you need to be honest on the original application.
The question the insurance company is asking, and which they have a right to ask, is "Are you part of 'nearly everone' or not?". By lying about your minor health problem, you are claimly to be 'not everyone' and falsely claiming the right to a lower health premium.
The only way that the question should not be asked or the answer is moot is if the insurance policies are required to be community rated. At which point everybody pays the higher rate as if there were nobody without current problems.
As you will see, to force an insurer to provide coverage for a condition that pre-existed the beginning of the coverage, is to force the insurer to provide something that is not "insurance" as that term is presently defined in California, and probably in every other jurisdiction.
This is exactly the logical flaw in the Healthcare Bill we have previously alluded to. And the using the term "chaos" by this author is a very accurate way to describe what this Bill evokes. Thank you AJFavish.
Over and over at the Suntrade Institute we have declared how truly stupid (arrogant?) the Harvard crowd (Obama, Sunstein, Summers, etc) is, and this is a perfect example. The Bill is simply not understandable in terms of insurance. Like really absurd.
There are those who say of course it is not stupidity but rather evil. We can't say, but we are looking at a true long term mess.
A pertinent observation is that the majority of US voting adults really do understand in a vague, inarticulated way, what a boondoggle this thing is. But as routine, the Media is the enemy here, since they also refuse or are incapable of articulating the fraud. Of course the same could also be said of Barack Obama himself, but noooo, guilt and emotion had their way.
Harvard - Henry Gates, Barack Obama, Jenifer G- what's her name, Timothy Leary, Teddy Kennedy, Michael Bloomberg, etc. Such is the way of the Left.
God help us.
Johnny Suintrade
(1) Individual insurance against major health care costs is often unavailable. Since insurers avoid insuring even healthy people who have pre-existing conditions that might in any way dispose them to such costs, this puts a substantial slice of the population out of the individual health insurance market. The remedy is to foster a national individual insurance market for those with pre-exisiting conditions. Subsidies and assigned risk pools can be created for those who are still unable to obtain insurance.
(2) The current system provides a grim answer for anyone with financially catastrophic health care costs that are not covered by insurance: go into bankruptcy to clear away existing debts, quit working, go on disability, and use Medicaid to pay health care costs. Do we really want a system that leaves people with quitting work and becoming a burden to the public as their best choice?
(3) Employer provided health insurance is tax deductible, so such insurance tends to get loaded up with routine health care costs. This skews public expectations about the nature and role of health care insurance. The remedy is to tax employer provided and individual insurance the same, with a break for out of pocket payments and for payments made through Health Savings Accounts.
(4) The American health care system discourages competition and consumer choice on price. Worse, prices are set in a crazy fashion in which the big buyer -- government in the form of the Medicare and Medicaid programs -- demands price breaks that shift costs to private insurance and to anyone who pays out of pocket. The uninsured thus pay the most. The remedy is to introduce price disclosure and price competition. This will help to lower costs and reduce inefficiencies in health care.
(5) State and federal mandates drive up health care costs and health insurance premiums. The remedy is to drop as many of the mandates as possible and to permit health insurers to do business across state lines.
In sum, conservatives need to engage the issue in a thoughtful fashion. Liberals won't, so someone has to. If we do so, we can win the health care debate. Echoing insurance industry talking points though is a dead end.
LOL. A pre-existing condition of non-existence.
Good point - and the idea would be that REAL health care reform would address the problem with a realistic solution, and not one that pushes the system to a Federal takeover of the Health Care System.
The conservative solution has been to push for decoupling HC from a job....and a person could pick a HC insurance company and stay with that company - even as he moves to various jobs. Companies would give a salary increase that amounted to the amount insurance that they used to provide ..so it would result in no increase in costs to them. The government would need to allow employees to find and purchase individual HC plans to suit their own needs, and allow the money to be deductible. Again - the only cost to the government is for the new people not currently getting health care would now deduct the costs, so the government would loose some tax money - BUT - the loss of money would be less than the cost of a massive takeover of HC.
Government regulations would need to protect persons from being dropped from their existing coverage if an expensive condition comes up ...
Ultimately - the government should encourage a return to INSURANCE ...and drop the requirement for “prepaid Health Care” mandates. Let consumers decide whether or not they want to pay for various checkups and treatments that cost under $5,000 - let people decide how to spend the first $5K of health care money, and let insurance kick in after that. Then you don’t need a large number of green-eye-shade accountants reviewing claims and deciding which ones to approve or deny. That alone would drop costs significantly!!
It's like being allowed to bet on the Superbowl after the game.
All excellent ideas.
To your list, I would like to add one more item:
Health care charges must be standardized and essentially the same for everyone. Medicare should not be able to force medical care providers to accept 40 cents on the dollar while others have to pay full freight! Maybe a discount of no more than 10% could be allowed for those paying promptly . . . but no longer should one person who pays out of pocket be charged 2, 3 or 4 times what Medicare or Medicaid might pay!
A big thing that has corrupted the whole health care system is that government can be a “Free Rider” who mandates that they get discounts (not available to regular users) and a hospital MUST TREAT those who can’t pay ...and then the hospital has to raise the charges to others who can pay, to subsidize their losses that were forced on them by the government!
All good points.
I like your idea on Medicare. Medicare providers should be able to engage in private contracting with Medicare patients. However the contract with providers prohibits this activity. Medicare constantly plays the game of limbo-how low can you go with providers. Eventually, more providers opt out every day. Increasing demand by increasing beneficiaries in other programs will give providers more leverage and increase the likelihood of opting out. The onerous regulations such as electronic medical records (cost about 50k for a small practice to install) and more insurance authorization are powerful dis-incentives to stay in the program.
As far as pre-existent conditions are concerned, I wonder what will happen if the mandates are struck down by the court or by partial repeal in congress and the pre-existent requirement stays in. Insurance companies would definitively have to stop selling individual policies (unless forced- which would not last long). Large group policies through employers would continue to be profitable with pre-existent coverage (as long as prices could still be raised to allow for a profit margin). People would continue to pay cash or use medical savings accounts (unless this is prohibited as it was in Canada until recently). A single payer system still looms large.
We are seeing this end game play out before our own eyes in MA. It appears that the state will force the non-profit health care companies to become insolvent. MA cannot afford a state run and funded health care program. If they try, the price controls will be draconian for providers. The state will try to make hospitals, clinics and providers operate underwater which is ludicrous and sheer economic suicide. Providers will quit, leave the state or country, drop all government sponsored insurance and run private clinics if allowed etc.
The Leftists will try to make their health care implosion palatable, but the road to tyranny will not be smooth.
“The former employee has been unable to find a new job and must now move to an individual health policy but is unable to purchase one that will cover his “prexisting” cancer.”
No, HIPAA requires group-to-individual portability on a guaranteed-issue basis, but only so long as the individual first has exhausted their COBRA benefits. Since group policies are generally less expensive than the equivalent policy obtained on the individual market, the COBRA requirement should not be a big deal for someone with pre-existing condition. That is, if they “need” insurance to cover costs of the preexisting cancer, it will generally be cheaper to purchase coverage than to pay those same expenses out of pocket by being uninsured.
Moreover, even before health reform passed, 35 states had high-risk pools that would take someone denied coverage in the private market. Such coverage might cost up to 50% or 100% more than “standard” rates, but again, for someone with pre-existing conditions, such coverage is a good deal. The health reform plan extends high risk pools to all states, but that’s an idea Republicans have been championing for years, i.e., it didn’t require passage of Obamacare to achieve this.
“It’s like being allowed to bet on the Superbowl after the game.”
Shhhh! Don’t give these guys any ideas. They might try to impose such a mandate on the gambling industry to make things more “fair.”
This book nicely codifies a principled market-oriented approach to health care reform.
http://www.hooverpress.org/productdetails.cfm?PC=1397
Unlike Obamacare, it does not make the system more expensive, more inefficient or more unfair. Nor does it attempt to fix what’s not broken. Too bad that in their pursuit of a really old-fashioned idea (i.e., tax-financed health care first appeared in Germany in the late 19th century!), the progressives in Congress and this administration weren’t willing to give a fair hearing to ideas such as this.
It's both "let the buyer beware," AND "let the seller beware" and that's quite justified and fair.
All so-called "Health Insurance" has been run off the tracks by incorrect utilization, politicians trying to buy votes with coverage mandates that ignore actuarial assumptions and economic reality caused by human nature!!!
Now the federal politicians want to buy a majority of American's loyalty with it so one political party can dominate with one party rule!!! It's not going to work in America and will deteriorate almost immediately, even as each segment is phased in!!!
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