Just ball parking based on my family, good insurance costs between $4,000 and $5,000 per year per person. That would be for a good normal employer plan that covers the 10 Essential Elements with low out of pocket yearly expenses.
In my case the insurance for my family of 5 runs ~$20,000 / yr. Thankfully ~70% of that is picked up by my company as part of my annual compensation. Now the puzzle is since the median household income in the US is in the mid $50,000 range. How do all of those families on the left side of the curve afford good coverage?
Apparently the GOP's proposal is to allow for less complete plans and smaller subsidies. I am not sure that is a good answer. Thoughts?
Please remember that I think ACA was an okay law that just needs tweaking:
NPR GOP May Trim 10 Essential Benefits
NPR Less Help for the Low Income
PBS GOP Document Plan
G2A Healthcare Cost Drivers
G2A Pre-Existing Condition Fraud
In my case the insurance for my family of 5 runs ~$20,000 / yr. Thankfully ~70% of that is picked up by my company as part of my annual compensation. Now the puzzle is since the median household income in the US is in the mid $50,000 range. How do all of those families on the left side of the curve afford good coverage?
Apparently the GOP's proposal is to allow for less complete plans and smaller subsidies. I am not sure that is a good answer. Thoughts?
Please remember that I think ACA was an okay law that just needs tweaking:
- Put real teeth in mandate penalties so everyone buys and stays insured. (ie no more "I'll sign up until they install my new hip")
- Open up insurance competition across State lines.
- Eliminate State Exchanges and provide one functional National Exchange. (ie cut mgmt and mktg costs)
- Maybe set rates by State, not region within State. (ie reduce rural peaks)
- Other?
NPR Less Help for the Low Income
PBS GOP Document Plan
G2A Healthcare Cost Drivers
G2A Pre-Existing Condition Fraud
29 comments:
Again, I had a plan that my company subsidized, and cost me $200/ month. The company offered a plan which turned out better, for which I paid $100/month. Then Obamacare came along, and now I am paying $500/month for less health care. Cutting healthcare costs is easy. Just get government out of it altogether.
I think you are going to need to give us a bit more of a causal link...
I agree that ACA has some requirements that should drive costs up some. (ie more complete coverage, coverage for pre-existing conditions, coverage until 26, many people who failed to sign up, etc) But nothing that would cause an increase of 5 times... Unless you live in sparsely populated areas.
So what other factors could be impacting your premiums? Change of company ownership? Change in age of company workers?
Here are some facts and data.
Kaiser Employer Survey Results
The Republican plan provides for much that I support. First, you can keep you existing plan.t. Second, it will cover more and cost less. Third, it will cover pre-existing conditions. And fourth, you can keep your doctor.
Why didn't we think of that?
--Hiram
Open up insurance competition across State lines.
This is something I have never understood. It's boiler plate you get from Republicans, but I don't think they have given any consideration at all to what it means, or what they are asking for.
To start with, it can mean two very different things, and I don't think people are aware of it. It could mean selling insurance policies regulated by states, to residents of other states. Or it could mean selling national policies everywhere, independently of state lines. Unaware of these distinctions, advocates of this approach tend to whipsaw between the two of them.
The first idea, selling state policies across state laws is a non starter. You can pass a law to that effect all you want, no health insurer will routinely sell you a policy tailored for one market in another market, unless that is to the benefit of the insurer. Policies are designed to the actuarial qualities of the people concerned. That's why they don't sell car insurance to people who don't have cars. Also, there are states rights concerns. You don't vote for the Florida legislature, why should Florida legislators set policy for you? Do you think they might be tempted to enact legislation that benefits their voters at your expense?
The second possibility, selling policies nationally. It always surprises me when Republicans advocate this as they often do, because it is a pretty large step away from their core principles, and towards ours. That beingI the case, I pretty much support that Republican proposal. The problem is that Republicans don't.
--Hiram
Competition among health insurers is an issue that's often talked about. To begin with, the competition between health insurers will always be limited because health insurance itself is a hugely complicated and risky form of insurance. There will never be a lot of players in this business because the business is just too difficult. An additional factor is the small market problem. It's part of the theology of America that we favor states and state rights and that sort of thing. An underlying assumption to that theology is that states are equal to each other. They are not. Some states are quite large and are in business terms comparable to thriving mid size countries. They can have vibrant internal markets. Other states barely exist at all, and in insurance terms, don't have the size to sustain competitive markets. In the private sector such states would merge, California could easily make a tender offer for Nevada, but in government we don't do that.
With respect to competition, health insurers don't tend to compete on costs of patient care. They aren't doctors, they can't tell you what the need, and it isn't really in the interests of hospitals to strike different deals with different insurers. They are like gas stations on opposite corners. They don't compete on the price of gas because they know that's business suicide. They compete marginally on other stuff, like who has the tastier tacos.
--Hiram
I somewhat agree, I guess that is why it is low in the Cost factors List.
I disagree. Competition in health insurance leads to innovation in the types of policies offered, while government stifles competition and prevents innovation. That is what happened to my health care. It was a standard 'fee for service' plan, while the new one offered was called a "prepaid" plan-- the network received X dollars for the year, per patient, and did what was needed and only what was needed. When Obamacare came along that option was eliminated and the "services" covered went up dramatically, necessitating (along with the paperwork burden) a much higher cost. There aren't any other "factors" to consider. Plan A>Plan B<<Plan C. Solution: Plan B or Preparation H.
Strange... These folks have a different perception. And I am pretty sure I am still on a fee for service model. So I don't think ACA eliminated the option.
Wiki Fee For Service Plan
Managed Care vs Fee For Service
As for insurance companies driving creative plans that maximize their profit. I am not sure that is the goal we should be aiming for.
The question is how do we reduce the cost of healthcare in America while maintaining accessibility and quality?
Obamacare IS a fee-for-service model.
Anyone who looks at how credit cards are regulated today and think that replicating that model in health care is a good idea should have their head examined.
The question is how do we reduce the cost of healthcare in America while maintaining accessibility and quality?
What campaign Trump would say is use the immense bargaining power of the federal government to drive down prices. It's one area where I totally agreed with him. There were a lot of areas where I agreed with campaign Trump. He made a lot of promises that Democrats should have been making but wouldn't or didn't. It just remains to be seen whether he keeps them now that he is in office.
In certain things I have gotten involved with, we often speak of tradeoffs between Speed, Quality, and Price. Priotizing one, always costs in the others so you have to make a choice. Is there such a three option choice here? Can we have lower costs, while maintaining accessibility and quality, or does one always come at the cost of the others? If so, which element should we prioritize? I would suggest that the Obama administration prioritized quality and accessibility at the cost of keeping prices down? Do you agree? Would you make a different choice?
--Hiram
Jerry,
Actual I think ACA allows many different forms of cost management. But if Obamacare is a fee for service model... How did it eliminate your fee for service model?
Sean,
I don't know... Credit cards provide me incredible service, protection and pay me every month for using them. If only my healthcare was that good...
Hiram,
Well we can go back to the list of factors... And I think if the Government mandates cost... (ie price controls, single payer) Then Quality and Availability go down... It is a messy situation.
•Unhealthy Americans abound
•Americans want to save everyone
•Saving everyone weakens Americans
•Americans insist everyone MUST stay alive Link2
•Americans love lawsuits
•Americans and Doctors love expensive tests
•American Government bureaucracy
•Private insurance bureaucracy, profits & wages
•Pharmaceutical personnel, profits & wages
•Medical device personnel, profits & wages
•Healthcare bureaucracy, profits & wages
•Excessive medical licensing requirements
Almost all credit cards are issued out of states like Nevada, South Dakota, and Delaware where the banking industry literally wrote the laws governing them. For instance, most credit card contracts require you to go to arbitration (with an arbiter paid for by the credit card company) before going to court. Not surprisingly, the bank wins in excess of 90% of the time under such an arrangement.
If you allow health insurers the same privileges -- allowing them to bypass Minnesota laws on health coverage -- you're going to see the same sort of rush to the bottom.
I think if the Government mandates cost... (ie price controls, single payer) Then Quality and Availability go down.
Depends on the mandates. Government has pulled back from mandates on costs. That was part of the price for increased access and quality. As it happens, the thrust of government mandates is to increase accessibility. In listening to complaints around the country, nobody is complaining they can't see a doctor. I haven't heard complaints about long lines for a while now. Now that Republicans are in charge, they are saying things that sound like people's access to health care won't be changed. But of course what they want to do is reduce the amount we spend on health care by reducing the amount of health care we provide. We won't insist that everyone stays alive, that sort of thing.
--Hiram
Sean,
I am not sure how to do it, but Blue Cross having to maintain 50 separate companies seems like a big waste. Currently BC SD is different from BC MN is different from BC IA...
Hiram,
Few are complaining about quality and availability today because only Medicare and Medicaid try to mandate costs.
BCBS has always been structured as a licensee organization -- independent insurers who license the use of the BCBS name and branding.
"Few are complaining about quality and availability today because only Medicare and Medicaid try to mandate costs."
But fee for service insurance fixes the fees to be paid for each individual "service." It's not government price-fixing, but it's price-fixing just the same.
But fee for service insurance fixes the fees to be paid for each individual "service."
I just think the burden of prving that some pricing formula or another will solve all the problems is on the person arguing it. What I believe is that health care in America are immensely complicated, and as with any immensely complicated problem any attempt to address it is going to help some more than others, hurt some more than others. The reason why America was the only first world country without universal health care is not because there isn't support for it, it's rather because we have a political system incapable of making the tough choices needed to provide it.
The founders wanted a political system unable to eliminate slavery. All they were able to accomplish is to establish a system that couldn't do it without civil war. The legacy their choice left is a political system that couldn't make other difficult decisions either.
--Hiram
Is fee for service like the battle between Netflix and Blockbuster? Blockbuster was once a category killer, putting out of business the mom and pop businesses that sprang up everywhere after the introduction of affordable VCR's. It had what I would call a fee for service model. You paid a fee to receive a video. No videos, no fees. It was a very transactional, a very free way of doing business. Netflix came along and offered a nearly unlimited number of videos for a flat monthly fee. Which was the better deal for consumers? The answer to that as it is to many other complicated questions is a firm and decisive "it depends". As it happens, time has passed and we have learned without a doubt which is the better business model, at least in the Blockbuster-Netflix battle. Netflix thrived, and Blockbuster went broke. The controlled environment of Netflix was the more successful business model. Turns out the freedom provided by blockbuster, the fairness of their transactional model, just wasn't what people wanted.
Does health care work that way?
--Hiram
The problem with fee for service is that it isn't a "pricing formula" or a "business model" at all. It is telling doctors what they will be paid for what they do. It results in many unnecessary tests to "pad the bill" without adding any additional medically necessary treatment. It also results in some people being denied the care they need simply because the insurance "won't pay for it." The "prepaid model," on the other hand, leaves treatment entirely to the doctor. If you don't need it medically (as I found when I asked about the customary antibiotics for a cold), the doctor doesn't do it unless you insist (and pay). If they do prescribe in excess, it comes out of their pocket. Similarly, if they do NOT treat what ails you and you get really sick, THAT cost comes out of their pocket. So they give you the best care they can, and your cost is fixed, just as insurance is supposed to do.
ll. It is telling doctors what they will be paid for what they do. It results in many unnecessary tests to "pad the bill" without adding any additional medically necessary treatment
We seem to have posited a choice between a system that provides an incentive to provide services, and one that provides incentives not to perform services. I really don't know which one is best.
--Hiram
fee for service is a system that incentivizes doctors to perform unnecessary services to get properly paid for what is medically necessary, or to be more honest or to refuse to see patients whose insurance doesn't pay them what the patient costs. On top of that, there is a lot of paperwork involved putting treatment into thousands of services, rather than just fixing what is wrong with you. For example, you come in with a common cold, the doc gets $25 for an office visit which doesn't even cover his staff. So he sends you for a chest X-ray ($50), gives you an antibiotic prescription ($30), and notices a mole on your face that he reports as a "cancer screening" ($75). He charges $90 for an office visit if you don't have insurance, but charges the insurance company $180. So why do so many government programs, and regulated private insurance, follow the fee-for-service model?
In other words, this system interferes with the doctor-patient relationship in major ways. Eliminating that would go a very long way to reducing costs.
fee for service is a system that incentivizes doctors to perform unnecessary services to get properly paid for what is medically necessary, or to be more honest or to refuse to see patients whose insurance doesn't pay them what the patient costs.
It's the blockbuster model. The alternative seems to be the netflix model. Which one is better largely depends on what one means by "better". I don't really know whether it's better to give an incentive for the providing of services or the not providing of services. But what we have decided to do for much of our history is not make a decision, and I am pretty sure that's the worst option.
Single payer addresses a lot of the paperwork problems, but that is pretty much off the table. Insurance companies view paperwork as a profit center, and as long as they are involved, you can count on a lot of filling out of forms.
--Hiram
You are misstating the choice. Fee-for-service simultaneously provides BOTH incentives-- to provide unnecessary services in order to break even, AND to refuse service that doesn't pay for itself without that padding of the bill. Either way, ffs insurance creates higher costs, lower quality and availability than "prepaid" or other systems of insurance. But government or government-regulated systems are almost all of the ffs variety.
Any fee system is capable of abuse. I think you just have to trust the doctors.
--Hiram
A "fee system"? What happened to free market competition for goods and services, aided by patient choice of doctors, insurance companies and plans? It isn't a "fee system," it is a price. It should not be fixed by government or by an insurer.
Wasn't one of the great benefits of Obamacare supposed to be increased competition that would drive down family premiums by $2500? The reality is that 40% of US counties will have only ONE provider available in 2017, and premiums are UP by $4000. On the basis of its own promises, O'care is a dismal failure.
Therefore, you have two choices to cut healthcare costs: cut benefits by increasing costs to be insured making them forego insurance and doctors forego treating them, or simply cut costs for what you are already doing, by getting rid of the excess costs generated by Obamacare.
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