Sunday, July 08, 2012

Healthcare and Obamacare Explained



HT: Morgan Frank

129 Comments:

At 7/08/2012 10:32 AM, Blogger Savior Faire said...

Hilarious video! I love these vids these guys produce!!

 
At 7/08/2012 10:39 AM, Blogger Larry G said...

re: cute video and bananas

here's the essential question -

Do you think that free-market health care is still free-market if the GOVT.... REQUIRES price disclosure and REQUIRES insurance companies to not turn down people for insurance or offer it across state lines...

I ask this because some of the "ideas" being espoused by the folks who oppose ObamaCare SEEM to involve using the GOVT to REQUIRE insurance companies to do things that they would not do in a true free market.

So.. let's get rid of ObamaCare and replace it with what (that does not involve the govt) ?

are there any real alternative proposals "out there" that do not involve the govt exerting it's "force" on private companies?

 
At 7/08/2012 10:58 AM, Blogger Ron H. said...

"here's the essential question "

No, here's the same meaningless questions and false premises.

Would you like a list of countries that allow a successful free market in medical care?

LOL

More unchanged, time wasting nonsense from Larry.

 
At 7/08/2012 11:19 AM, Blogger morganovich said...

larry-

it's really simple and has been explained to you a dozen times. why do you persist with this repetitive question? you are either being deliberately annoying or have the memory of an etch a sketch.

(and note that i am not the only one pointing this out)

so, one final time:

government should get entirely out of health care provision and regulation. (including tax incentives)

the market should move to cash pay just like it does for getting your car fixed.

you ask what it costs, you shop around, you decide if it's worth it and you spend you money.

insurers (including those from overseas) are free to offer whatever they want to nationwide and people are free to buy it or not as they choose.

and federal health aid comes in the form of cash grants, not guarantees of access to service.

there is no price fixing, just competition.

if people want HSA's as part of their insurance, they can have them. if not, they do not need them.

simple, easy consistent.

costs would plummet and choice would rise (as it has already in cash pay procedures).

we'd get more and spend less.

 
At 7/08/2012 11:26 AM, Blogger Larry G said...

" Would you like a list of countries that allow a successful free market in medical care?"

well sure. why not? that would help support the idea that free-market health care IS possible and not just some cockamamie theory. Right?

we do have some examples.

Medical tourism, right?

I hear tell that more than 10,000 people a year actually BUY a kidney at market price....

As I've been saying, it would seem like the BEST opportunity for true free-market health care would be those countries that do not currently have the govt involved in health care.

In fact those countries would seem to be the best laboratories since most of not particularly affluent and the "theory" seems to be that a free market system would offer the least costly care because of true competition.

Now I ask this as a serious legitimate question.

Morg sez:

" the market should move to cash pay just like it does for getting your car fixed.

you ask what it costs, you shop around, you decide if it's worth it and you spend you money.

insurers (including those from overseas) are free to offer whatever they want to nationwide and people are free to buy it or not as they choose.

and federal health aid comes in the form of cash grants, not guarantees of access to service.

there is no price fixing, just competition.

if people want HSA's as part of their insurance, they can have them. if not, they do not need them.

simple, easy consistent.

costs would plummet and choice would rise (as it has already in cash pay procedures).

we'd get more and spend less. "

why is this not something that can happen in countries that don't already have govt-sanctioned health care?

It would seem to be more realistic for this to incubate itself in a country without govt healthcare than trying to undo it in countries with govt healthcare.

it's an honest question, seriously.

 
At 7/08/2012 11:32 AM, Blogger morganovich said...

"It would seem to be more realistic for this to incubate itself in a country without govt healthcare than trying to undo it in countries with govt healthcare.

it's an honest question, seriously."

mostly due to poverty.

it takes money to get good results.

darfur does not have it.

singapore does.

they get good results from being mostly cash pay and spend far, far less than others.

it would be better still if it were not coercive and had fewer regulations.

 
At 7/08/2012 11:36 AM, Blogger hancke said...

Spot on video! The government used Medicaid/Medicare to get it's foot in the door of private healthcare and now has kicked the door wide open. The tail wagging the dog if you will. Most hospitals use private pay to subsidize the losses incurred by low Medicaid/Medicare reimbursements and the filing and compliance costs. Now providers are burdened with new costs for government reporting and compliance for private pay.

 
At 7/08/2012 11:55 AM, Blogger Larry G said...

" The government used Medicaid/Medicare to get it's foot in the door of private healthcare "

I would say the FIRST thing the govt did wrong was to let employers offer all-you-can-eat-without-knowing-the-costs health care to employees.

More than anything else - that has contributed to people who use healthcare and have no idea of the costs, much less shop around for the best price.

If you took that away, it would jumpstart a move toward a true free-market for health care.

but I still do not think that health care providers would willingly post their prices nor would they offer one price for everyone for healthcare and also would get rid of those who are "expensive".

So that would just dump those people to use EMTALA and MedicAid of which is paid for by people with insurance and taxpayers.

so then...after getting rid of employer-provided healthcare, you'd have to get rid of EMTALA and MedicAid .... and MediCare.

This is never going to happen in the USA IMHO.

There are only two real paths for the USA and that is to do something like Singapore has done where the govt itself has decreed payroll taxes, individual mandate, price disclosure, and universal access

or we continue with the current system perhaps nibbled a little around the edges but not significantly changed.

Just because a country is not affluent does not mean they could not have free-market health care.

it would not likely offer universal access or cover all people - but unless one makes that a requirement of any "free market" implementation of health care - it would seem an obvious and natural outcome in countries that do not involve themselves in health care.

Even in wretchedly poor countries, there will be more affluent people who will need health care and can afford it so I do not see it as totally out of the question that some level of free-market health care would exist.

Mexico seems to be one of those countries where a free-market in health care - does exist.

Americans go across the border to buy health care there...

Expats buy free market healthcare as Medicare mostly does not cover foreign countries.

 
At 7/08/2012 12:10 PM, Blogger hancke said...

Larry, I would look to consumer demand to determine if providers are willing to post prices for medical services. Many people have resorted to high deductible plans to reduce premiums. As a result they are now shopping for healthcare and many providers are indeed posting or at least providing costs for services on request. As the video highlighted, most people never bothered to ask how much when they aren't directly footing the bill.

 
At 7/08/2012 12:27 PM, Blogger Buddy R Pacifico said...

Here is a short essay that explains the Singapore health model.

""Singapore’s system requires individuals to take responsibility for their own health, and for much of their own spending on medical care. As the Health Ministry puts it, “Patients are expected to co-pay part of their medical expenses and to pay more when they demand a higher level of service. At the same time, government subsidies help to keep basic healthcare affordable.”

 
At 7/08/2012 1:46 PM, Blogger kmg said...

Here is a poll on Misandry.

Go vote..

It seems to be revealing a theme that is mentioned on this blog as well.

 
At 7/08/2012 1:55 PM, Blogger morganovich said...

"Just because a country is not affluent does not mean they could not have free-market health care."

of course not, but it does mean that the standard of care will be different. poor countries can have free markets in food or cars too, but that does not mean they will eat or drive as much or as well as a rich country.

health care does cost money.

it could cost a lot less, cancer drugs etc do not grow on trees.

 
At 7/08/2012 1:59 PM, Blogger morganovich said...

"but I still do not think that health care providers would willingly post their prices"

why not?

why should healthcare be any different than auto repair?

customers that are spending their own money would demand to know the prices up front.

why would providers not respond to that?

 
At 7/08/2012 2:27 PM, Blogger Larry G said...

" "but I still do not think that health care providers would willingly post their prices"

why not?

well does it happen right now in countries without govt healthcare?

Do providers in Mexico or India post their prices?

why should healthcare be any different than auto repair?

well even in this country - what would keep providers from posting cash-only prices ? How come we don't see Ads for MRIs?

customers that are spending their own money would demand to know the prices up front.

well I remember the banking industry and they did not post their prices for services until the govt required it.

Eyeglasses and contact lenses - yes - optometrists prices not so much.

Not even the doc-in-the-boxes advertise their cash-prices...

why would providers not respond to that?

well that's a good question but they don't

when's the last time you saw a price list in a doctors office even for cash-only services?

Or go to Quest or LabCorp and ask what their cash-only prices are....for lab tests....

I've heard that some places, including hospitals will quote you a cash-only price but in order to "shop around", you'd have to go to each provider and ask - and some would tell you and some would not.

You'd actually think with people basically uninsured but having HSAs that there WOULD be a market for cash, but I've yet to see much of it.

This is assuming you know which services you actually want and need.

When you go to the doctor, he/she often makes a laundry list of tests and diagnostics for you to have (and have the results reported back to him for further diagnosis and treatment).

It does not lend itself to "shopping" but I HAVE noticed that they do offer you the choice of providers to get the tests/diagnostics but geezy peezy ...you'd have to go find providers and then ask each one for prices.

That would be like looking for a TV and the prices were not posted and you've have to visit each store and then ask for each price.

What you would want would be able to search all providers in your area and compare prices and there's just no easy way to do that.

 
At 7/08/2012 2:45 PM, Blogger Larry G said...

re: the Singapore system:

"Medisave
Under the Medisave program introduced in 1984, employees contribute 6–8 percent of their
monthly salary (with the share depending on their age) to an individual medical savings
account (MSA), while employers make a matching contribution. Medisave contributions are part of a broader compulsory savings program
in which employees contribute 16 percent of salaries, and employers 20 percent, to a central
provident fund to cover hospitalization
(Medisave), pensions, and mortgages."

http://goo.gl/DyIRJ

if you caught the three key things:

1. - compulsory payroll taxes i.e. individual mandate

2. - that total 35% of salary, more than twice the 15.3% for Social Security in the US. (and said to be a job killer).

3. - a Govt-directed system that requires price disclosure from all providers and puts limits on charges and provides subsidized catastrophic benefits for those that use up their personal accounts.

Singapore is considered the most cost-effective universal health care system in the world with around 1K per capita while having impressive life expectancy and infant death stats. That' 1/8 what we spend.

but - it's a govt system - not a non-govt free market system.

It's probably a more likely system we can evolve to from where we are right now rather than start over with a totally non-govt system.

 
At 7/08/2012 2:59 PM, Blogger arbitrage789 said...

Obamacare is one giant wealth-transfer mechanism.

People who are on the receiving end of that wealth transfer, or who (wrongly) believe that they are, really aren't going to care about the economic realities.

It's the people who wrongly believe that they will benefit under Obamacare that hold the key to the election outcome.

 
At 7/08/2012 3:03 PM, Blogger arbitrage789 said...

If Romney comes up with a H.C. plan that will win the support of Republicans and independents, he's got a realistic chance of winning the election. But if he just goes around the country saying that the economy is bad, I don't think he'll win.

 
At 7/08/2012 3:15 PM, Blogger Larry G said...

the idea of the "exchanges" is that anyone can buy health care insurance without being denied and would get it at the same rate that everyone else paid for it.

That's much like the plans currently offered to civil service and military folks where they have a choice of plans, cannot be denied, and the price is the same for everyone.

If the public starts to understand this, it may be hard to repeal.

also similar to the plans in Switzerland and Germany where the health care providers themselves are private.

Isn't the theory behind ObamaCare that people who can't get healthcare but instead rely on ERs and other expensive latter stage care will get preventative/routine (lower cost) care instead of going to the ER and in doing that save private insurance people from getting cost-shifted by the hospitals?

 
At 7/08/2012 3:19 PM, Blogger Buddy R Pacifico said...

Larry,

Singapore's Central Provident Fund appears to be a combiniation of a 401 plan, Medicare and Health Savings accounts.

Under the Sinapore health system a person can take out what they put in, plus accumulated investment gains.

As Morgan has stated, a comptitive system of medical market prices is incentivied, when one's own money is being used.

 
At 7/08/2012 3:22 PM, Blogger Larry G said...

@Buddy - I agree but the most relevant thing is the fact that people are forced to save - it's not a voluntary system.

the only way they can keep costs down is by making everyone pre-pay into the funds so they actually do pay for healthcare rather than get it "free" (paid for by others).

agree?

 
At 7/08/2012 3:23 PM, Blogger OBloodyHell said...

LOLOLOLOL.... "Medical insurance is to regular insurance what ..."

ROTFLMAO.

 
At 7/08/2012 3:30 PM, Blogger Scott Drum said...

It would be one giant step if we could stop misapplying the word "insurance" to that which is really prepaid healthcare. Insurance is not the big problem. It is people who expect to have all their minor healthcare expenses covered by third-party payment that is the problem. Imagine an Obamacare-like plan except that the only thing you really had to buy (or that was subsidized) was protection against truly expensive risks (remember when it used to be called "major-medical"?). If people want to buy a plan that covers chiropractic, drugs, acupuncture, massage therapy, etc., let them do so at their own expense. The only reason these things are bundled into plans today is because pharmacists, chiropractors, acupuncturists and massage therapists have been successful at lobbying their state governments to mandate it.

 
At 7/08/2012 3:42 PM, Blogger Buddy R Pacifico said...

Larry,

"the only way they can keep costs down is by making everyone pre-pay into the funds so they actually do pay for healthcare rather than get it "free" (paid for by others)."

agree?

Healthcare is complicated, but people actually paying for their own healthcare, health savings accounts and personal private catostrphic insurance, is essential for any healthcare system to have a chance for long term viability.

 
At 7/08/2012 3:59 PM, Blogger Larry G said...

" Healthcare is complicated, but people actually paying for their own healthcare, health savings accounts and personal private catostrphic insurance, is essential for any healthcare system to have a chance for long term viability. "

totally agree.

I still wonder why our tax laws say that you cannot write off your out-of-pocket costs unless they exceed 7.5% of your AGI.

That "penalty" encourages people to NOT pay out of pocket IMHO.

As far as I know, you cannot not even write off a catastrophic policy (or non-employer-provided policy) plus your out of pocket if it is less than 7.5% of your AGI.

that encourages people to seek employer-provided insurance and not buy their own.

 
At 7/08/2012 4:06 PM, Blogger arbitrage789 said...

Larry G (3:15)

“the idea of the exchanges is that anyone can buy health care insurance without being denied and would get it at the same rate that everyone else paid for it. That's much like the plans currently offered to civil service and military folks where they have a choice of plans, cannot be denied, and the price is the same for everyone”.
___________________


You can make whatever moral arguments you want, but I just want to stick with the economic facts. If you look at military personnel and federal employees TAKEN AS A GROUP, they are relatively healthy. There are not vast hordes of drug addicts, alcoholics, and AIDS patients coming to work every day. And for those who become seriously ill through no fault of their own, they will eventually get fired if they are unable to work.

Again, I’m not attempting a moral argument. But you cannot compare the insurance risk of presently uninsured persons (taken as a group) with that of military and Federal employees (taken as a group)

 
At 7/08/2012 4:16 PM, Blogger morganovich said...

"well does it happen right now in countries without govt healthcare?"

yes. it's exactly what happens. how else could it possibly work? you think people just walk into a doctor and ask for treatment without asking the price? you'd never buy other goods and services that way. you would not let someone mow your lawn that way.

and then you just get bogged down in the specifics of singapore.

i am not arguing we should emulate it. i am pointing to one aspect: that people spending their own money leads to price shopping and rational use which keeps costs low and using it to demonstrate that moving to cash pay lowers prices and increases the availability and quality of care.

the fact that it is compulsory has no bearing on that.

 
At 7/08/2012 4:17 PM, Blogger Larry G said...

" But you cannot compare the insurance risk of presently uninsured persons (taken as a group) with that of military and Federal employees (taken as a group)"

Probably a fair point but remember we're talking about the entire families not just the employee and retired service members as well as active.

It's a very large pool of all kinds of people with risk factors.

and all things considered - for any prospective insured - getting care are the ER is going to be seriously more expensive than getting care not at an ER.

From a purely economic (and not moral) point of view - as long as we provide ER care to uninsured, wouldn't it be cheaper to provide non ER care in lieu of ER care?

Without ObamaCare don't we just continue the practice of using ERs for non emergency care?

 
At 7/08/2012 4:20 PM, Blogger morganovich said...

"What you would want would be able to search all providers in your area and compare prices and there's just no easy way to do that."

this is a total straw man and factually inaccurate.

first off, if the system were predominantly cash pay, such a system WOULD exist just like it does for cars and lawn care. providers would advertise low costs to get patients, just like grocery stores, hotels, and airlines do.

second, it does exist.

http://www.comparemricost.com/

there are lots of services for things like this.

 
At 7/08/2012 4:21 PM, Blogger Larry G said...

i am pointing to one aspect: that people spending their own money leads to price shopping and rational use which keeps costs low and using it to demonstrate that moving to cash pay lowers prices and increases the availability and quality of care.

the fact that it is compulsory has no bearing on that.

wouldn't it if people did not pre-save for their care and had no cash?

I see the compulsory savings as central to a system of cash pay much like we have HSAs.

What is health care like with and without HSAs?

 
At 7/08/2012 4:24 PM, Blogger Larry G said...

" http://www.comparemricost.com/

there are lots of services for things like this. "

well when I put in my zip instead of a list of providers and prices, I get a bunch of Ads for insurance.

Did you actually get a list for your zip?

I put in a different zip and still got no providers/prices

but I AGREE this is what we need!

 
At 7/08/2012 4:34 PM, Blogger arbitrage789 said...

Larry G @ 4:17


“getting care are the ER is going to be seriously more expensive than getting care not at an ER. From a purely economic… point of view - as long as we provide ER care to uninsured, wouldn't it be cheaper to provide non ER care in lieu of ER care?”
____________________

The problem with this argument is that people make “static assumptions”. If you provide low-cost insurance to people with little or no deductable, what is likely to happen is that every time they sneeze, or have a headache or a stomach ache (or their child does), they’re going to go running to the doctor. So the use of medical services is going to increase markedly, I believe. As it is now, waiting around in an emergency room is not a pleasant experience, so few people will do it unless they have a real medical problem.

I am not, in any way, shape or form suggesting that the current system is optimal, or even economically rational. But it’s a question of comparing system “A” with system “B”. I think that Obamacare is going to raise overall HC costs, impede economic growth, and make matters worse for people who already have healthcare.

 
At 7/08/2012 4:41 PM, Blogger morganovich said...

"wouldn't it if people did not pre-save for their care and had no cash?"

1. hey, if you do not save, then that's your lumps.

2. no, as fewer people using care would drop prices.

3. cash grants as aid would still allow a price mechanism to function.

and why do you need an GSA to save? you save up money for possible need, just like you do for anything else.

actually, you seem to be right that that site is just an add for insurance.

this looks more legit though:

http://www.remakehealth.com/

most of my healthcare in SF was cash pay. my doctor did not even take insurance. you paid $100 or so for a visit, got a full 30 mins, he had drugs right there is you needed them, etc.

it was better service and MUCH cheaper than paying $400 a month to get a $25 copay.

i just kept high deductible insurance around for emergencies.

this lowered my costs and upped my level of care while protecting me from somehting catastropic.

some private US plans have done similar things.

whole foods is a notable example.

http://online.wsj.com/article/SB10001424052970204251404574342170072865070.html

it costs less and is very popular with employees and very effective.

 
At 7/08/2012 4:42 PM, Blogger Larry G said...

" I am not, in any way, shape or form suggesting that the current system is optimal, or even economically rational. But it’s a question of comparing system “A” with system “B”. I think that Obamacare is going to raise overall HC costs, impede economic growth, and make matters worse for people who already have healthcare."

actually, it won't be easy to see GPs either. You'll be able to get an appointment maybe but not right away and the doctor will not get reimbursed for frivolous reasons.

the difference is that they'll see a GP before things will progress to more much damaging stages that will require much more intensive and expensive care.

Preventive care saves money and catches potentially damaging and expensive diseases earlier.

It's the same basic reason why people with insurance get routine checkups.

It's the reason why health care costs are cheaper in countries that provide routine access to providers rather than late stage intensive care.

When people delay getting treatment at an ER, eventually it gets much worse for some and then when they come back - there are in much worse condition and need much more expensive care.

As long as we accept the cost of the care that they will eventually get - even if we hold them off from getting intermediate care - we still get the bill.

 
At 7/08/2012 4:53 PM, Blogger arbitrage789 said...

In principal, good preventative care, and diagnosing disease early, will improve patient outcomes and MAY, depending on how it is administered, reduce overall costs.

But offering "free" preventative care and "free" diagnostic tests will also cost (someone, somewhere) money.

Devil's in the details.

 
At 7/08/2012 4:58 PM, Blogger Larry G said...

@morg - well your second site was better but still no real list of providers and prices....

re: why have an HSA?

to save up for future expenses?

I would assume the rationale for HSAs was agreed to when they make it available.

" it was better service and MUCH cheaper than paying $400 a month to get a $25 copay"

point has merit.

re: whole foods points

yes... agree

we could have done that a long time ago, right?

ObamaCare seems to be what happens when all these other "good" ideas were never made into law....

but many of those points are govt-dictated, agree?

• Equalize the tax laws so that employer-provided health insurance and individually owned health insurance have the same tax benefits. Now employer health insurance benefits are fully tax deductible, but individual health insurance is not. This is unfair. -

this is one of Romney's proposals and it means doing away with a govt tax benefit...

• Repeal all state laws which prevent insurance companies from competing across state lines.

states rights?

• Repeal government mandates regarding what insurance companies must cover.

agree

• Enact tort reform -

govt taking away the "right" of individuals to recover damages? that does not seem to protect "rights".

• Make costs transparent

do you mean govt dictated rules?

• Enact Medicare reform. totally agree.

first thing - get rid of Part C subsidized "gap" insurance. 2nd thing require 50-50 co-pay for things like knee and hip replacements especially if you own 2 homes and 5 cars.

• Finally, revise tax forms to make it easier for individuals to make a voluntary, tax-deductible donation to help the millions of people who have no insurance and aren't covered by Medicare, Medicaid or the State Children's Health Insurance Program.

well we already allow charitable deductions. They are one of the most heavily used ways to reduce tax liability...

but this is not really going to help with things like open heart surgery for a child or a pregnancy that can easily top 20K.

Question - who should pay for pregnancy costs?

right now, it's the big enchilada for most employer-provided health insurance and it's not usually covered as "catastrophic".

 
At 7/08/2012 5:04 PM, Blogger arbitrage789 said...

Larry G @ 4:42

And let me also add: I have no interest in paying for preventative HC measures for people who use illicit drugs or alcohol, or people who engage in unprotected sex with someone they just met an hour before.

Nor do I have any interest in paying for preventative HC services for someone who spends all his time sitting on the couch eating pizza.

 
At 7/08/2012 5:11 PM, Blogger Larry G said...

And let me also add: I have no interest in paying for preventative HC measures for people who use illicit drugs or alcohol, or people who engage in unprotected sex with someone they just met an hour before.

Nor do I have any interest in paying for preventative HC services for someone who spends all his time sitting on the couch eating pizza.

but you already pay!

the question again is how much!

as long as we allow drug addicts and pizza gluttons to get their care at ERs - you and I will pay.

we can't seem to get past this part.

Until/unless we repeal EMTALA - we will not only pay, we'll pay ER rates.

we simply do not get to choose.

 
At 7/08/2012 8:52 PM, Blogger Methinks said...

In principal, good preventative care, and diagnosing disease early, will improve patient outcomes and MAY, depending on how it is administered, reduce overall costs.

Doubtful.

There are certain things for which this is true. Pap smears, for example test for a highly curable cancer and are less expensive than actually coming down with cervical cancer.

But, most "preventative medicine" is just more spending. We're able to now diagnose and aggressively treat tiny cancer tumours (and I hate to tell y'all, we all have a little cancer in us) that will take decades to grow and are unlikely to ever be the cause of death if left alone.

Laboratory testing is vastly overused. It's pretty much only good to confirm disease in the presence of symptoms or for detecting cholesterol, testing liver function, and things like that. Very basic things. As an example of overuse, I once had an anomalous result for a test that is usually only administered in the presence of symptoms (I was asymptomatic and had no idea that this panel was requested as part of my regular blood work). For this particular disease, the only thing that mattered were symptoms (which is why it's never part of a normal panel and one had never before been ordered for me). Yet, I was given it. Insurance was forced to pay for it and it was recommended I prance around wasting time and money on specialists so they can administer panel after panel of expensive tests to satisfy their intellectual curiosity at my expense. In the end, if they found anything, it would have been useless because all possible diseases for which this test is administered are incurable and only symptoms are managed through medication I knew I would refuse to take. And here I was completely asymptomatic.

I had no symptoms, but I had way too damn much insurance and that sort of thing encourages doctors not to practice better medicine but more to practice more bullshit instead.

The best, most effective and cheapest preventative medicine is a preventative lifestyle.

Obamacare worsens the existing problem and provides no incentive to improve lifestyle (poking, prodding and "educating" are all dismal failures).

 
At 7/08/2012 8:52 PM, Blogger Bill said...

I haven't read through all the comments so don't know if this has been covered. I don't think the part of the video where it is argued that when premiums increase, people will use more medical services "in an attempt to get their money's worth" is good economics. The premium is a sunk cost just as the price one pays at an all-you-can-eat buffet is a sunk cost. If the price of the buffet went from $10 to $12, would the typical person eat more "in order to get his money's worth"?

 
At 7/08/2012 8:56 PM, Blogger morganovich said...

"In principal, good preventative care, and diagnosing disease early, will improve patient outcomes and MAY, depending on how it is administered, reduce overall costs."

but such things are weaker incentives than exist under user pays.

let people face the costs of their own actions and they will not make such expensive choices.

 
At 7/08/2012 8:56 PM, Blogger Methinks said...

Hancke @ 11:36 am,

I concur. I dumped my old insurance and took only catastrophe with the highest deductible available. I pay out of pocket for almost all of my doctors (alas, insurance covers blood tests, so I choose minimalist doctors who understand the limits of lab tests). Posting prices has become far more common.

You know, dental insurance is not as prevalent and prices are common. Prices are also common in cosmetic and lasik surgery. Prices ought to be more common everywhere - and they will be as Obamacare creates wait lists.

 
At 7/08/2012 8:58 PM, Blogger Methinks said...

It's amazing to me how many people still believe that Obamacare has anything at all to do with reforming health care.

The legislation is nothing more than a massive tax increase (besides the tax mandate there are at least 19 other new steep taxes) and a large expansion of government. That's all it is, folks.

 
At 7/08/2012 9:02 PM, Blogger morganovich said...

"If the price of the buffet went from $10 to $12, would the typical person eat more "in order to get his money's worth"?"

yes. especially when the price goes up a lot.

you eat more and more expensive foods. you don't fill up on rolls after dropping $90 for the seafood buffet at deer valley. you hit the crab and the lobster. but the analogy is not precise because people get full. healthcare is not like that. you get 20 tests run when you need 3 "just in case".

you go to an expensive MRI at a hospital because its closer. you get it in the first place "just to be safe" after an accident when you would never pay your own money for it.

you see dermatologists for simple issues.

when the price goes up, you expect more. if you pay $49 for motel 6 you expect different things than a 4 seasons room at $1200.

when you pay a lot, you expect a lot.

worse, the doctors are incentivized to make sure you over consume. they schedule too many follow ups, run too many tests, and go for the expensive reimbursement procedures, not the most cost effective.

that may be one of the biggest cost drivers.

 
At 7/08/2012 9:23 PM, Blogger Hydra said...

I had occasion to meet a German touristwho was here hiking the Appalachian trail. He had been to the US numerous times before, sometimes on work assignments.

He explained that in Germany you MUST haveinsurance. However, one has the choice of paying a tax and getting the government plan, or avoiding the tax and buying a private plan.

He was no fan of the government plan, saying that although the tax had stayed constant the coverage has been reduced.

Even so, he said, you had to be crazy to opt for the private plan, unless you were extremely wealthy. Opting for the private plan shut you out from the go ernment services and left you vulnerable to being wiped out if something bad happened.

The US system he said, was stark raving mad, from what he had seen.

 
At 7/08/2012 9:26 PM, Blogger Hydra said...

There is no free market in health care, in the normal sense. When you are in pain you are in no position to negotiate or seek other options. You will take a vet or an emr, if that is what is available.

 
At 7/08/2012 9:33 PM, Blogger Hydra said...

I hope your catastrophic care insurance pays if you need it. Given my experience I would not count on If. That said, you are lucky to be able to get it. Before obamacare, I was shut out of the market: no insurance available to me are any price. PERIOD.

 
At 7/08/2012 9:35 PM, Blogger Bill said...

Once the premium (sunk cost) is paid, then one presumably asks, "What is the cost and what is the expected benefit of one more test?" The incremental cost of the test will be the same whether one's annual premium is $X or $2X. So if one finds it worthwhile to get that one more test when the premium is $2X, why wouldn't he have found it worthwhile to get the test when the premium was $X? I'm skeptical that people will seek more medical tests if their sunk cost premium is increased.

 
At 7/08/2012 9:49 PM, Blogger Hydra said...

Let people face the cost of their actions.......

++++++++++++++++

What actions? One day I was healthy and the next I was bedridden with a. Chronic disease I did.nothing to cause. The o e course of action that eventually worked was an incredibly expensive drug.

What choices did I have, and how could I have chosen a less expensive one, there being none?

My wife carried united sued motorists insurance. When she was struck by an uninsured motorist, her company refused to pay. It took eight years to Sue and ultimately collect. What could she have chosen to do better or different?

You are espousing a nice theory, but in the real world it has little meaning.

Sure, it works for buying jeans or underwear, but insurance is just a racket,% in many cases. I have had some good experience CES: my disaster silty insurance paid as promised, but in my experience that was the ex eption rather than the rule.

 
At 7/08/2012 10:04 PM, Blogger Hydra said...

Methinks has a point about testing. When we could measure water pollution in the parts per thousand, laws were set to regulate it at that level. But when we became able to measure at the parts per trillion level, the laws advanced to manage at that level, which is probably ly silly a.d not cost effective.

But, the fact That you can measure at the part let trillion level is sufficient to prove pollution exists. Like as in medicine, the amount of money in play assures the tests will be run, meaningful or not.

But hey, its a free market. If it is worth it for someone to Sue, it is worth it to run the test.

Hey, I have an idea, Ltd skew the free market by preventing lawsuits.

 
At 7/08/2012 10:07 PM, Blogger Hydra said...

Disaster silty insurance e is how Droid spells disability. Insurance.

 
At 7/09/2012 6:36 AM, Blogger Methinks said...

But hey, its a free market. If it is worth it for someone to Sue, it is worth it to run the test.

We need a loser pays system to cut down on the number of frivolous lawsuits.

There is no free market in health care, in the normal sense. When you are in pain you are in no position to negotiate or seek other options. You will take a vet or an emr, if that is what is available.

You're talking about an emergency, not regular health care. In an emergency, you may have to pay a convenience premium (and that's one reason emergency rooms are more expensive, btw) just as you have to pay your plumber more to fix a leak on a Saturday. There is nothing but government preventing a free market in medical care just like the one we have for financial planners, lawyers, plumbers, contractors and every other professional service.

 
At 7/09/2012 8:32 AM, Blogger mike k said...

"There is no free market in health care, in the normal sense. When you are in pain you are in no position to negotiate or seek other options. You will take a vet or an emr, if that is what is available."-Hydra

That's exactly why you buy health insurance!

 
At 7/09/2012 11:35 AM, Blogger Duncan said...

The debate may have moved past this, but here is a price list for care

http://www.surgerycenterok.com/pricing.php

I believe Prof Perry may have posted this or similar in the past. These seeem very reasonable. I had athroscopic knee surgury last year and after repeat attempts to get a price I gave up, and filed the claim under insurance. The "negotiated" insurance rate was around $12k, roughly double the price at this surgery center. It is encouraging to see prices for care and given the shortage of supply and new demand for care maybe we will see more of this type of transperancy.

 
At 7/09/2012 11:39 AM, Blogger Hydra said...

That's exactly why you buy health insurance!

============================

That fine, if someone will sell it to you. If you are simply refused, then where is the free market?

Even worse, when an insuror sells you insurance and then renegs on the agreement, cancels your insurance retroactively, wher eis the free market then?

All that aside, your comment about health isnurance has little to do with my comment that the ordinary concept of free market does not apply to health care, since you may not be in a position to negotiate freely.

It is all well and good to say that people are responsible for their own actions, but when it comes to health care, one may easily fall victim to something they had nothing to do with.

THAT is why you buy health insurance and why it must be universally avaialable.

 
At 7/09/2012 11:47 AM, Blogger Hydra said...

You're talking about an emergency, not regular health care. In an emergency, you may have to pay a convenience premium (and that's one reason emergency rooms are more expensive, btw) just as you have to pay your plumber more to fix a leak on a Saturday. There is nothing but government preventing a free market in medical care just like the one we have for financial planners, lawyers, plumbers, contractors and every other professional service.

==================================

I understand that, but that is not the point I was trying to make.

Not all pain indicates an emergency: You can be doubled up in chronic pain for months at a time, as I was, and it is no emergency. But when the proper treatment was finally found, I had no real choice in what it was or who was the provider.

Either way, the usual free and open rules of what we consider a free market often do not apply, simply because of the nature of the business; the custome is under some form of duress or distress and unable to negotiate or shop, very much.

As pointed out, we can do better with more transparency, but that isn;t going to solve the real problem at hand, any more than restricting acces to legal recourse will.

 
At 7/09/2012 11:49 AM, Blogger Hydra said...

We need a loser pays system to cut down on the number of frivolous lawsuits.


============================

How do you know it is a freivolous lawsuit, until a jury decides?

 
At 7/09/2012 11:52 AM, Blogger Ken said...

Hydra,

When you are in pain you are in no position to negotiate or seek other options.

This is a bullshit argument and false at that. If you break your leg, you are in a lot of pain. But if you know that hospital A charges $5000 to fix you and hospital B charges $2500 to fix you, even in that pain you can make a sane decision.

Additionally, a lot of the most expensive stuff doesn't have to be done right now. Most big purchases can be put off for at least a couple days, giving you plenty of time to shop around.

 
At 7/09/2012 11:56 AM, Blogger Ken said...

Hydra,

Additionally, the emergencies you are describing are certainly not what anyone thinks should only be covered by insurance. Why the hell are people thinking when they expect their insurance to provide copays for regular visits and tests? This expectation for insurance to cover everything is the driving force behind increasing premiums.

Insurance is defined by high cost, low frequency events. By insisting that low cost, high frequency events (which do not have the chance of bankrupting you) be covered, more medicine is consumed than necessary and premiums spiral out of control.

 
At 7/09/2012 12:11 PM, Blogger Hydra said...

government should get entirely out of health care provision and regulation. (including tax incentives)


==============================

That is merely a bald opinion, not a statement of fact. I don;lt seeany reason Larry should accept the idea or give it any credence, based on the evidence offered.


Providing health acare is NOT like providing care repair services, and that idea stikes me as just silly.

And the idea of cash pay is simply ludicrous, unless youare very wealthy. We have insurance for many, many things, and they work pretty well, as a reasonable way to spread the risk.

It has not worked so well for health isnurance, but that does not mean it can't. The risk and recovery proposition is not so different. but, you would not suggest we go to a cash pay only system for, say, damage to your home would you?

Well, maybe you would, if you are wealthy enough that losing your home makes little difference, it might make sense to self insure, but even then,the price of the isnurance is small comapred to the cost of the risk it covers.

Yet we don';t have people running around claiming homeowners isnurance is a socialist scam, or have people complaining about paying for repairs to other peoples homes through their insurance premium.

Imagine if your homeowners insurance was provided by your employer. Your wife calls and sayts the house is on fire, so you rush home. On your way, your boss calls ant tells you you are fired. then your insureor tells you your fire is not covered because youa re no longer employed.

That is the situation we had with healthinsurance, before Obamacare. Obamacar may be the worst system in the industrialized world, but it is still better than what we had before.

Obamacare can be improved on: give people the private option like Germany has, and see how many are silly enough to take it. But there simply is no eveidence anywhere that the best answer can be found by simply kicking government out.

Since that is unlikely to happen, it makes sense to figure out how to improve what it is that we have to work with.

 
At 7/09/2012 12:27 PM, Blogger Hydra said...

This expectation for insurance to cover everything is the driving force behind increasing premiums.

Insurance is defined by high cost, low frequency events. By insisting that low cost, high frequency events (which do not have the chance of bankrupting you) be covered, more medicine is consumed than necessary and premiums spiral out of control.

===============================

That strikes me as one of the more cogent things said here. You don;t expect your homeowners or car isnurance to cover everything, and you can choose your deductible to fit your risk profile. But your lender will insist you have insurance.

In the case of health care, the government is the provider of last resort, which means we are all "lenders" to those who experience uninsured losses, and we should insist they have insurance same as any other lender would.

The other aspect of not covering everything, eventually boils down to what a life is worth and rationing. Nobody beleives we can, or should, provide free full body transplants for every terminally ill person. Everyone knows there will be some kind of rationing, just as there is triage at any battlefield hospital. Yet the hue and cry about rationing and death committees and all that other nonsense is used as a cudgel to prevent any meaningful advance.

If you have enough money, you rlife is wotrth whatever you are willing to spend: no probvlem, it is a free market after all. but if youdo not have any money, your life is still worth something, even if only to the person who takes your food stamps.

Therefore, as you point out, it comes down to a question of how much rik will we cover, and how do we define that risk? At some level, preventive care reduces bigger downstream risk, but thaty does not mean we do quarterly full body cat scans starting at age five.

 
At 7/09/2012 12:29 PM, Blogger Hydra said...

This is a bullshit argument and false at that. If you break your leg, you are in a lot of pain. But if you know that hospital A charges $5000 to fix you and hospital B charges $2500 to fix you, even in that pain you can make a sane decision.

===============================

It is not a bullshit argumnent. Yo let me break your leg an then try and sell me the argument that you can still make monetary decisions rationally.

That is a bullshit argument, and you will know that the first time it takes four strong men to put you on a gurney.

 
At 7/09/2012 12:35 PM, Blogger Hydra said...

Most big purchases can be put off for at least a couple days, giving you plenty of time to shop around.

=================================

What godd is that when there is one drug that serves your purpose and it cost more than you earn every month.

What shopping around are you going to do, and what good will it do you. There is no other option. And try finding an insurance company, when they find out you need a high dollar drug.

Sure, you could shop around for another country, maybe. You and I can probably fly to Switzwerland for our drugs and save money on the deal, but that doesn;t help the average Joe.

 
At 7/09/2012 12:57 PM, Blogger mike k said...

"All that aside, your comment about health isnurance has little to do with my comment that the ordinary concept of free market does not apply to health care, since you may not be in a position to negotiate freely."

Hydra, This really isn't that difficult. When you are healthy you are most certainly in a position to negotiate with health insurance companies. If you forgo insurance when healthy, you risk being put into a bad negotiating position when the need for health care arises. Although, only the most urgent health care needs would be that way. You could still seek out the best prices for the majoriy of medical needs. Also, if you forgo insurance you would actually have more money to spend on preventive and routine medical care, theoretically reducing your chances of not catching the onset of major illnesses in time for reasonably priced treatment.

 
At 7/09/2012 1:21 PM, Blogger Jet Beagle said...

Scott Drum: "It would be one giant step if we could stop misapplying the word "insurance" to that which is really prepaid healthcare. Insurance is not the big problem. It is people who expect to have all their minor healthcare expenses covered by third-party payment that is the problem"

Scott, I read this all the time from economists. But I think they're mistaken. Other than maternity and child birth, the big expenses covered by health insurance are not "routine" and normal at all.

Paying an insurance premium to cover potential long term costs of expensive medical conditions is exactly the definition of insurance. Such conditions include diabetes, cancer, heart disease, osteoarthritus, emphysema, hypertension, and spinal misalignments. Treatment of these diseases includes expensive pharmaceuticals and so-called "routine" office visits.

You may believe that a "routine" office visit is a minor expense. But if you were a diabetic like me, and had 5 or 6 such visits to different physicians each year, you would quickly realize that the expense is not minor.

Among the insured population, it is those with chronic conditions which chew up the lion's share of medical expenses. What we buy each year as health insurance is exactly that - insurance to protect us if we lose the lottery and contract one of those chronic conditions.

 
At 7/09/2012 1:32 PM, Blogger Jet Beagle said...

Ken: "Why the hell are people thinking when they expect their insurance to provide copays for regular visits and tests? This expectation for insurance to cover everything is the driving force behind increasing premiums. "

As I just argued to Scott Drum, it is certainly not the "routine" conditions which are the driving force behind premiums. There is nothing at all "routine" about the medical conditions which consume the overwhelmingly majority of health care expense. Heart disease, diabetes, cancer, mental illness, and arthritis are not routine.

Broken legs, routine medical exams, mamograms, and all the other small treatments you rail against are chump change in the world of medical spending.

Ken: "Insurance is defined by high cost, low frequency events."

I disagree, especially with the "low frequency" part of the sentence. Treatment for my diabetes is a series of very frequent, very regular events. Each one by itself would not consume my savings. But the sum of those events - including the pharmaceuticals - will be an enormous expense for my insurance company.

 
At 7/09/2012 1:42 PM, Blogger Jet Beagle said...

Why do so-called free market advocates keep trying to redefine the word "insurance"? And insist that only coverage for catastrophic events qualifies to be called insurance?

I can purchase automobile insurance with a variety of deductibles. If I choose, I can pay more for a very small deductible. The low deductible insuarnce will protect me against the cost of the least expensive fender bender. But it's still insurance, even though it covers more than just the big collisions.

Why, in your minds, is the same not true for health insurance? If I want to insure against the cost to treat ankle sprains and skin rashes and maternity care, what on earth is wrong with allowing insurance companies to sell me a policy providing for such insurance?

Of course, the real problem with health insurance is the problem which causes all th economic messes: government interference in markets.

It is government - not insurance companies - that requires us all to pay for the routine minor care.

 
At 7/09/2012 2:49 PM, Blogger morganovich said...

jet-

"I can purchase automobile insurance with a variety of deductibles. If I choose, I can pay more for a very small deductible. The low deductible insuarnce will protect me against the cost of the least expensive fender bender. But it's still insurance, even though it covers more than just the big collisions.

Why, in your minds, is the same not true for health insurance? If I want to insure against the cost to treat ankle sprains and skin rashes and maternity care, what on earth is wrong with allowing insurance companies to sell me a policy providing for such insurance?"

because car insurance does not cover tune ups, oil changes, your engine breaking, or any of the other myriad things that health coverage covers.

it covers things that happen infrequently and tend to have high cost.

that is insurance. much of "health insurance" is more like a maintenance contract and a warranty.

if car insurance covered oil changes, new tires, and detailing, imagine how much more it would cost and how much more of those things you would consume (and of how much higher quality).

synthetic oil, pirelli corsa tires, and the detail van once a week.

that would make it like health insurance.

 
At 7/09/2012 2:53 PM, Blogger mike k said...

"Among the insured population, it is those with chronic conditions which chew up the lion's share of medical expenses."

Jet, I'd love to see the numbers on that. Here's one link to a report (there have been numerous studies) that show the lion's share of all health care costs is actually the last year of life.

http://www.reuters.com/article/2010/10/14/us-care-costs-idUSTRE69C3KY20101014

Couple that with the defensive medical practices of most physicians and hospitals you start to get a feel for why health care is so expensive.

No throw in the regulatory burdens faced by physicians, hospitals, pharma, surgical device manufacturers, insurance companies etc. as well as the litigious state of their business and it's no wonder health care is expensive.

 
At 7/09/2012 2:56 PM, Blogger Larry G said...

re: insurance

the Whole Foods approach sounded good ... a little like the Singapore Plan.

the problem is still the difference in affordable access if you have a pre-existing condition.

Even employer-provided health insurance can jump premiums if it is a small pool.

Small business is even more vulnerable.

If Exchanges are set up and they are anything like the plans the Feds offer to employees and military - there will be a range of options from Cadillac to bare-bones catastrophic only.

but again the thing that differentiates is that no Fed employee nor his family can be excluded by any of the companies in the pool - and that's the way the exchanges will operate also.

No matter how one feels about ObamaCare, the Exchanges will help people , provide them with guaranteed access that is portable and it will help small businesses who are hammered because they cannot get in the larger pools.

 
At 7/09/2012 2:56 PM, Blogger Larry G said...

well the tort reform idea seems mostly bogus from both CBO and private sector anaylsis:

" CBO concludes that limiting malpractice liability would reduce total national health care spending by about one-half of 1 percent, or about $11 billion this year. That would save taxpayers about $41 billion over the next decade in lower Medicare, Medicaid and other federal spending for health care."

http://cbo.gov/sites/default/files/cbofiles/ftpdocs/49xx/doc4968/01-08-medicalmalpractice.pdf

" Towers Perrin, medical malpractice tort costs were $30.4 billion in 2007,"

http://www.towersperrin.com/tp/getwebcachedoc?webc=USA/2008/200811/2008_tort_costs_trends.pdf

a much higher number than CBO but still a tiny number in a 2 trillion dollar system.

The "tort reform" seems to be just another excuse to not doing anything but pretend otherwise - not to mention that the right to sue and recover damages is a property right.

 
At 7/09/2012 3:06 PM, Blogger Larry G said...

In terms of "emergency" care.

When you don't have insurance and you put off getting even routine/maintenance/preventative care - the cost goes up before you ever show up at an ER. The ER then adds costs on top of that. The correct analogy is never having your furnace maintained or checked-up and then having it break down over the weekend.

Not only the emergency call.. but a new furnace because you failed to do periodic maintenance on the old one and it ended up with a premature failure.

Pap smear was cited as one but many others exist - for instance if you have elevated A1C levels (type II diabetes), if that goes untreated, you end up with massive organ damage from eyes, to internal organs to cardiovascular damage and you don't die quick nor cheaply.

Type II not treated leads to very expensive downstream costs - and we ALL pay those costs when they do not get preventative attention.

it is estimated that as many as 42% of Americans are obese - and vulnerable to Type II Diabetes.

If someone has Type II diabetes and does not seek a doctors care, they will end up going blind, having organ failure including kidneys, have limbs amputated, and catastrophic cardiovascular damage that results in open-heart surgery and worse.

And make no mistake - when someone finally shows up at the ER needing bypass surgery- those costs are directly transferred to those who have insurance and taxpayers.

the only real way to get to a "true" free market system in the US would be to actually repeal EMTALA such that those without insurance
could not actually transfer costs to us.

I've not heard a single elected representative, even the most rabid anti-ObamaCare ones, advocate repeal of EMTALA as the necessary reform to move to a true free market system.

So we're playing games because as long as EMTALA is in place, we're all agreeing to pay those costs.

" There is nothing but government preventing a free market in medical care just like the one we have for financial planners, lawyers, plumbers, contractors and every other professional service."

that's true. The countries in the world without govt healthcare are "free market".

Every country that came up the economic ladder choose to have gov healhcare and to reject free market healthcare.

why is there not a single affluent country in the world that rejected govt involvement and chose non-govt healthcare?

Singapore repealed their Great Britain style national health care in 1994 and had the perfect opportunity to transform to a completely non-govt system and instead they went to an individual mandate system with steep payroll taxes, mandatory govt-required price disclosure/controls and subsidized care for those that could not afford it so that in the end - every citizen is covered and the per capita costs are about 2K and they have among the highest life expectancy and lowest infant death rate - in the world.

we keep saying that free market principles can give us a better system so I'd ask what is the difference between an unfettered free market and one that has "free market principles"?

 
At 7/09/2012 3:14 PM, Blogger Larry G said...

re: " "The problem with socialism is that eventually you run out
of other people's money."

—Margaret Thatcher"

just as a point of reference, did Thatcher every try to actually get rid of the UK Health Care system?

I do not recall that she did but I could be wrong. Anyone remember?

Did she have a different vision of health care for the UK?

 
At 7/09/2012 3:17 PM, Blogger Jet Beagle said...

Mike K,

No argument from me about the cost drivers you listed: defensive medicine; last stage life support; regulatory burdens; etc.

I was referring to the medical conditions for which treatment accounts for the lion's share of medical expenses. Scott Drum and Ken had implied that treatment of routine medical conditions were driving medical costs.

All medical conditions - "routine and minor", chronic, or catastrophic - are subject to the factors you listed.

WebMD provides a slideshow listing most expensive medical conditions and their costs Except for the category "normal childbirth", there is nothing at all routine about these conditions.

 
At 7/09/2012 3:30 PM, Blogger Larry G said...

" The costliest 1% of patients consume one-fifth of all health care spending in the U.S., according to federal data. Health systems are trying to reduce the imbalance."

http://www.ama-assn.org/amednews/2012/03/05/gvsa0305.htm

but say one more word and you'll be accused of "rationing" and death panels.

 
At 7/09/2012 3:39 PM, Blogger Jet Beagle said...

morganovich,

I've seen that analogy of doctor's visits and oil changes many times before. Quite frankly, I think it represents very shallow thinking - not just by you but by every economist who offers it.

First, consider the total cost of medical treatment for a medical condition such as cancer or diabetes. A single pill or a single office visit may not be that expensive relative to a six month oil change. But those of us with chronic diseases consume hundreds of pills and a half dozen office visits a year. Insurance - and it really is insurance - protects us from the sum total of all those so-called "routine" pills and "routine" office visits.

Second, consider the upside protection the insurance company or self-insured employer receives from having the insured's health monitored. The maximum value of comprehensive/collision auto insurance is the value of the automobile - which for most people is under $40,000. The potential risk to the insuror is much, much higher if a potential life-threatening condition is not uncovered in time.

Routine treatments of non-chronic medical conditions is a red herring. The U.S. does not spend hundreds of billion of dollars on physical exams and treatment of minor cuts and rashes. It spends hundreds of billion of dollars on cancer, diabetes, heart disease, mental illness, and other chronic ailments.

The idea that health insurance costs could be reduced very much at all by cutting out treatment of "routine" medical conditions is just plain wrong.

I will grant one exception to that last statement. Maternity and childbirth are routine and foreseeable. Expenses for this one predictible medical condition does constitute a significant portion of our total health care bill.

 
At 7/09/2012 3:52 PM, Blogger Jet Beagle said...

morganovich: "it covers things that happen infrequently and tend to have high cost.

that is insurance."

Sorry, but I disagree with your definition of the word "insurance".

The competitive market for auto insurance - not some imagined definition of the word "insurance" - has determined what auto insurors will cover with their standard policies.

The competitive market for health insurance - not some imagined definition of the word "insurance" - would determine what health insurors would cover, if government did not interfere with markets.

IMO, market forces would lead health insurors to cover so-called "routine" visits to the doctor's office for all but minor medical conditions. The five office visits my diabetes forced me to make in 2011 would be covered. The five prescription medications I consume daily would be covered.

Where I think you and the other proponents of so-called "catastrophic" health care coverage misdiagnose the problem is in focusing on the event - the prescription drug or the office visit - and not on the medical condition which causes the event.

Yes, medical insurance costs might go down if insurors were not forced to pay for office visits and drugs for treatment of sprained ankles and acne. But not by much. That's not what were paying hundreds of billions of dollars for.

 
At 7/09/2012 4:27 PM, Blogger Hydra said...

The competitive market for health insurance - not some imagined definition of the word "insurance" - would determine what health insurors would cover, if government did not interfere with markets.

==============================

The reason government had to step in is that the market, in fact, failed to do as you claim.

Neither is the auto insurance market free of government interference.

 
At 7/09/2012 4:33 PM, Blogger Hydra said...

The costliest 1% of patients consume one-fifth of all health care spending in the U.S., according to federal data. Health systems are trying to reduce the imbalance.

==============================

Sure and something like 90% of all your health care expenses will occurr in the last three years of your life.

We need to distinguish between health care and death care.

 
At 7/09/2012 4:38 PM, Blogger Hydra said...

WebMD provides a slideshow listing most expensive medical conditions and their costs Except for the category "normal childbirth", there is nothing at all routine about these conditions.

===============================

And except for not smoking, weight control, and adequate exercise, there is nothing you can do about them, except maybe postpone when it happens.

 
At 7/09/2012 4:45 PM, Blogger Hydra said...

Hydra, This really isn't that difficult. When you are healthy you are most certainly in a position to negotiate with health insurance companies.

=================================

You can't be serious.

When My insuror rescinded my insurance retroactively, they would not even speak or correspond with me.

Your isnurance is cancelled retroactively, don;t bother contacting us.


Where exactly was my opportunity to negotiate?

It took government intrervention to even discover what the insurance company's reason for the action. Even though that reason was false, no recourse was available.


Is there anyone who has successfully negotiated a change in their insurance policy or costs? Anyone?

 
At 7/09/2012 4:50 PM, Blogger Hydra said...

Here's one link to a report (there have been numerous studies) that show the lion's share of all health care costs is actually the last year of life.

===================================

That is probably true ( though I think it is the last three years of life). But one doesn;t preculude the other: people eventually die of chronic diseases.

But you raise a valid point: when a life is almost over in any case, what does rationing mean? you lived a full life, we took good care of you for 75 years, and now you are complaining because we won't give you a new heart?

 
At 7/09/2012 5:01 PM, Blogger Larry G said...

" and now you are complaining because we won't give you a new heart? "

friendly amendment:

" and now you are complaining because we won't give you a new heart so you can live another month?"

that's the essential problem with end of life care.

But if the care comes from the govt and we dare mention the cost/benefit, death panels and rationing get brought up.

The same exactly thing happens with private insurance but we pretend it's only govt that rations health care and put's a bureaucrat between you and your doctor.

we have the same issue no matter where the health care comes from but we pretend it's a govt-only problem.

Remember, not everyone gets Medicare. It's not a free entitlement. Those who do not sign up for Medicare - either have their own insurance, are wealthy and self-insure or get MedicAid.

No matter the path - the only path where you get all the health care you want/need is the one where you pay for it out of your own pocket.

It would be interesting to know how many wealthy people still use Medicare.

I personally know people who are retired and have annual incomes in excess of 100K and still pay $100 a month for Medicare rather than pay for it themselves.

 
At 7/09/2012 5:23 PM, Blogger Jet Beagle said...

larry G: "Those who do not sign up for Medicare - either have their own insurance, are wealthy and self-insure or get MedicAid."

Just so we're clear, You Can't Opt Out of Medicare Without Losing Social Security
I think that refers to Medicare Part A.

Medicare Part B costs more than $100 monthly for high income individuals (Individuals with income above $85,000 or couples with income above $170,000). The top rate in 2011 was $319/month.

 
At 7/09/2012 5:33 PM, Blogger Larry G said...

@ jet -

Yes.. Medicare Part A which is pre-paid from FICA taxes.

Part B is entirely voluntary but you are correct about the 85K and 170K thresholds that boost premiums.

http://answers.hhs.gov/questions/3006

Part B you can choose to not have.

The Govt can also choose to boost premiums beyond the current rates.

Often, Part B premiums are often directly deducted from Social Security benefits rather than people receiving a bill.

We often hear that we should cut/repeal Medicare but the govt could continue the program, increase premiums and co-pays, and get rid of Part C the subsidized gap coverage.

 
At 7/09/2012 5:55 PM, Blogger juandos said...

Government-Run Health Care
vs. the Hippocratic Oath


'Politicians’ efforts to impose government-run health care include their goal of “guaranteeing” health care to everyone. But whenever the government attempts to “guarantee” health care, it must also control the costs of that service—which means, it must dictate how doctors may and may not practice'...

 
At 7/09/2012 5:58 PM, Blogger Larry G said...

" But whenever the government attempts to “guarantee” health care, it must also control the costs of that service—which means, it must dictate how doctors may and may not practice'.."

isn't this the same as non-govt private insurance?

 
At 7/09/2012 10:17 PM, Blogger Ken said...

Hydra,

Yo let me break your leg

Why would I let you break my leg? Are you just a blathering idiot?

Your argument is that pain makes people illogical and completely unable to make rational decisions, therefore all should be made to go to doctors dictated by the IRS (Obamacare will be administered by the IRS) for all medical procedures. I can only repeat this is a bullshit argument. All those medical decisions can be made better by the individual, even in extreme circumstances.

Jet Beagle,

Heart disease, diabetes, cancer, mental illness, and arthritis are not routine.

These are indeed routine. 8.6% of Americans have diabetes. Cancer is the second leading cause of death. 26.2% of Americans have mental illness. 20% of adult Americans have arthritis. To say that these are not routine is to say you don't understand statistics or what "rare events" means.

I disagree, especially with the "low frequency" part of the sentence.

Then you don't know what insurance actually is.

Why do so-called free market advocates keep trying to redefine the word "insurance"?

It is you who is trying to redefine what insurance is.

If I want to insure against the cost to treat ankle sprains and skin rashes and maternity care, what on earth is wrong with allowing insurance companies to sell me a policy providing for such insurance?

There is nothing wrong with this, but you would never do this in a free market. It's far cheaper to simply saver your money to pay for the frequent, routine medical services and products. And this is not at all what advocates of Obamacare are arguing. In fact, they are arguing the complete opposite of this: that government should dictate what insurance you buy, removing the decision to buy or not buy and what to buy and what not to buy.

 
At 7/10/2012 1:56 AM, Blogger Jet Beagle said...

ken: "Then you don't know what insurance actually is."

Oh, yes, I do, Ken.

The definition of insuarance from Merriam-Webster online:

"coverage by contract whereby one party undertakes to indemnify or guarantee another against loss by a specified contingency or peril"

From the free dictionary online, the legal definition of insurance:

"A contract whereby, for specified consideration, one party undertakes to compensate the other for a loss relating to a particular subject as a result of the occurrence of designated hazards"

The definition of insurance from the Oxford dictionary online:

"an arrangement by which a company or the state undertakes to provide a guarantee of compensation for specified loss, damage, illness, or death in return for payment of a specified premium"

Nothing in those definitions restricts the event being covered by insurance to anything catastrophic or unusual.

Neither you nor anyone else who wishes to so restrict the meaning of this word is the accepted authority on the English language.

 
At 7/10/2012 1:56 AM, Blogger Jet Beagle said...

This comment has been removed by the author.

 
At 7/10/2012 2:09 AM, Blogger Jet Beagle said...

juandos: " But whenever the government attempts to “guarantee” health care, it must also control the costs of that service—which means, it must dictate how doctors may and may not practice'.."

Larry: "isn't this the same as non-govt private insurance?"


You are correct, Larry, that the policies underwritten by insurance companies do dictate what treatments will or will not be compensated.

The difference between Obamacare and private insurance is that a party, such as a large employer, can determine through a competitive market what treatments his insurance policy will cover. If that party is not satisfied with the bundle of treatments which are proposed by the insuror, he has the right to negotiate changes or to seek other insurors.

 
At 7/10/2012 2:20 AM, Blogger Jet Beagle said...

ken: "These are indeed routine. 8.6% of Americans have diabetes. Cancer is the second leading cause of death. 26.2% of Americans have mental illness. 20% of adult Americans have arthritis."

Sorry, Ken, but you and I apparently also differ on the definition of the word "routine".

While the broad category of diseases referred to as "cancer" does afflict a large portion of the population, each one is markedly different from the other. The cost and type treatments are very different.

Lymphoma is not routine.
Lung cancer is not routine.
Prostate cancer is not routine.
Renal cell cancer is not routine.

Likewise, there are many types of mental illness. Each one is not routine. Treatment for the various types of mental illness vary in nature and in cost.

That only 8.6% of the population suffers from diabetes is evidence that diabetes is not routine for the human population.

 
At 7/10/2012 2:29 AM, Blogger Jet Beagle said...

Ken: "but you would never do this in a free market. It's far cheaper to simply saver your money to pay for the frequent, routine medical services and products"

In fact, in the very early free market days of health insurance, Blue Cross and Blue Shield were successful in selling coverage for maternity and childbirth and for treatment of such "routine" accidents as broken legs.

I have evidence that the treatments I listed were covered under the free market. Do you have any evidence to support your assertion that these treatments would never be covered "in the free market"?

 
At 7/10/2012 5:37 AM, Blogger Larry G said...

@Jet

re: " The difference between Obamacare and private insurance is that a party, such as a large employer, can determine through a competitive market what treatments his insurance policy will cover. :

but Jet - no matter what you 'negotiate', there still is going to be a point where someone else, a 3rd party associated with the insurance provider, govt or private will be making a decision as to what they will cover or not.

Any time you "contract" with an insurance provider, there will be questions of coverage and interpretations.

Also - Govt ALSO has a contract of what they will cover or not.

you know, for instance that Medicare does not cover some things and other things - like multiple lipid panels within a too-short period of time may not be covered.

I have to sign these things all the time since my doc orders some tests more frequently than Medicare will pay - depending.

My point is that pvt insurance works much like govt insurance when they have on their staff a person who is going to make determinations about your coverage when the policy/contract is not clear.

The big hit on ObamaCare and Medicare is that some bean-counter will deny you, ration you.

Well the pvt insurers do the same thing and changing providers might get you better in one area but worse in another. You cannot fix this by changing providers. It's endemic to insurance itself.

 
At 7/10/2012 7:14 AM, Blogger Methinks said...

How do you know it is a freivolous lawsuit, until a jury decides?

The person who is suing frivolously is hoping it won't go to trial. He's hoping to make it so expensive for the insurance company that the company settles the suit for less than it'll cost to litigate it even if it wins. That's what happens - it's basically an extortion scheme.

If it's a truly frivolous suit (and so many of them are), then then plaintiff's attorneys will be more reticent to take the case because insurance companies will be less likely to settle. There will be fewer lawsuits (which is why lawyers hate loser pays).

The guy who was sewn up with a clamp still attached to his one remaining kidney will absolutely win a suit (that's just plain negligence). The family of the patient who died as a result of a severe head injury which put his probability of survival at 5% will be unlikely to find a lawyer to try to shake down the hospital in a malpractice suit.

 
At 7/10/2012 8:14 AM, Blogger Jet Beagle said...

Larry G: "Any time you "contract" with an insurance provider, there will be questions of coverage and interpretations."

Again, Larry, the difference is the freedom to change insurors or to negotiate a package which better suits your needs. Without government interference in markets, health insurors would almost certainly offer a wide variety of health insurance packages.

There is no question that medical care, like every other good, must be rationed. The issue is how. With government rationing of health care - or government rationing of any other good or service - we will certainly get a solution which provides less benefit to consumers than the free market.

 
At 7/10/2012 9:30 AM, Blogger Larry G said...

@jet

"Again, Larry, the difference is the freedom to change insurors or to negotiate a package which better suits your needs."

you are free to choose your own with ObamaCare - it's not single-payer. The Exchanges are all private and compete with each other.

"Without government interference in markets, health insurors would almost certainly offer a wide variety of health insurance packages."

but they would likely not cover high-risk nor those with chronic diseases. private insurance seeks to enhance profits and reduce losses so they get rid of subscribers who cost them money or they exclude the diseases and treatments that cost them money.

Govt will cover those who cannot get insurance.

there's good and bad with that but at least we ought to recognize that the pvt sector will not cover some things that govt will.

"There is no question that medical care, like every other good, must be rationed. The issue is how. With government rationing of health care - or government rationing of any other good or service - we will certainly get a solution which provides less benefit to consumers than the free market."

that's simply not the truth for some people with chronic conditions or higher risk people.

How many elderly could get affordable health care without Medicare?

the private sector does not want elderly subscribers - they are going to be costly and hurt profits.

 
At 7/10/2012 9:40 AM, Blogger Jet Beagle said...

Larry G,

Prior to government interference in health care - way back in the early 20th century - consumers established fraternal organizations to increase their bargaining power with health care providers. Those fraternal organizations contraced with physicians to provide medical care to all members of the organization. Hospital care was often not included because hospitals were infrequent providers of health services.

Today, persons with costly afflictions are covered by their employers' health insurance plans. Ninety years ago, such persons were likewise covered by the health insurance plans of their fraternal organizations.

With free markets, solutions - perhaps fraternal organizations - would emerge to provide risk-sharing for those you believe would not be covered. We have evidence from the early 20th century to show that to be true.

 
At 7/10/2012 9:48 AM, Blogger Jet Beagle said...

Larry G: "private insurance seeks to enhance profits and reduce losses so they get rid of subscribers who cost them money or they exclude the diseases and treatments that cost them money."

I completely disagree.

Today, private insurance companies provide - for a fee - long term care for the general population. Those insurance companies know that a very small percentage of the population will consume a huge portion of the long term care expenses. Those private insurance companies do not rid themselves of subscribers who begin to consume the benefits of those plans. That's because doing so would be widely reported, and would make it near-impossible for the insuror to continue selling long term care insurance.

 
At 7/10/2012 9:54 AM, Blogger Larry G said...

@jet

" Prior to government interference in health care - way back in the early 20th century - consumers established fraternal organizations to increase their bargaining power with health care providers. Those fraternal organizations contraced with physicians to provide medical care to all members of the organization. Hospital care was often not included because hospitals were infrequent providers of health services."

true. How come not a single country out of 200 has such a system now?

"Today, persons with costly afflictions are covered by their employers' health insurance plans. Ninety years ago, such persons were likewise covered by the health insurance plans of their fraternal organizations."

nope. the people who have employer-provided insurance are covered. those without are not. Ninety years ago many people had no coverage at all and died for lack of it.

"With free markets, solutions - perhaps fraternal organizations - would emerge to provide risk-sharing for those you believe would not be covered. We have evidence from the early 20th century to show that to be true. "

that might be true if you repealed EMTALA but as long as you and I are the cost-payers of last resort, we'll continue in that role.

the 'evidence' from the early 20th century does not seem to work anywhere in the world in the 21st century even though more than 150 countries have similar economies to what we had when we had 'fraternal' health care.

I'm not opposed to it - I just doubt that it can exist as long as we have EMTALA as our safety net and yet I've not seen anyone advocate repeal of it.

As long as uninsured folks can go get free care at a hospital - no "free market" is going to really exist.

 
At 7/10/2012 9:59 AM, Blogger Larry G said...

" Today, private insurance companies provide - for a fee - long term care for the general population. Those insurance companies know that a very small percentage of the population will consume a huge portion of the long term care expenses. Those private insurance companies do not rid themselves of subscribers who begin to consume the benefits of those plans. That's because doing so would be widely reported, and would make it near-impossible for the insuror to continue selling long term care insurance."

Jet, have you actually looked into how much long term care insurance costs?

In most cases, it about covers what you pay into it then your benefits stop. It's not much different than setting aside your own money to live on later.

Long Term Care could only exist and remain profitable if more people paid into it than actually lived to use it.

agree?

Long Term Care is actually one of the biggest drivers of MedicAid because Medicare does not cover it.

And many folks try to transfer their assets to their kids, then plead destitution to get MedicAid.

MedicAid has had to establish 6yr rules that all assets owned are subject to payment to MedicAid for long term care.

In the earlier 20th century, there was no long-term care insurance. Your house paid for your long-term care and your kids were lucky if your house covered the cost and they did not have to pay.

Now..the parents try to keep the house, give it to the kids and get Uncle Sam to pay for their long term care.

 
At 7/10/2012 10:01 AM, Blogger morganovich said...

"IMO, market forces would lead health insurors to cover so-called "routine" visits to the doctor's office for all but minor medical conditions. The five office visits my diabetes forced me to make in 2011 would be covered. The five prescription medications I consume daily would be covered"

perhaps, but quite likely not.

what other insurance works that way?

not cars. not homes. you point to the insurance than markets have driven, but then assume they will drive somewhere else for health.

that seems like a stretch to me.

it also seem undesirable as it breaks the price mechanism around care.

5 office visits are likely cheaper than the additional premium you pay for coverage to get access to them for "free".

 
At 7/10/2012 10:09 AM, Blogger morganovich said...

jet-

but again, whatever a free market wants to do is fine. if someone wants to sell you that health coverage at a price you find agreeable, great. i think you should both have a right to transact.

but the issue with insurance today is that it is driven by tax issues and regulations that distort the market and its offerings leading to all manner of bad outcomes and curtailments of liberty.

a truly free health market would likely look quite different.

 
At 7/10/2012 10:11 AM, Blogger Larry G said...

re: insurance for "routine" expenses.

check out the health care plans for US Govt employees:

they are:

Fee-for-Service Plans
Health Maintenance Organizations
Point of Service
High Deductible Health Plans
Consumer-Driven Health Plans

http://www.opm.gov/insure/health/reference/handbook/fehb05.asp#top

if you drill down for each one you'll see a wide variety of offerings INCLUDING plans that cover virtually everything.

Families will often opt for these kinds of plans because they never really know when a child will get sick or injured and need more care.

Most families have a monthly budget and they want a known number for health care so they get insurance that limits their out-of-pocket (even if it is not cheap).

they do that if they have employer-provided health care.

If they don't have it - they have to go "bare" in that they lose one of the most important benefits of employer-provided and that is for the class of insurance you have - everyone pays the same price.

 
At 7/10/2012 10:19 AM, Blogger Larry G said...

" but again, whatever a free market wants to do is fine. if someone wants to sell you that health coverage at a price you find agreeable, great. i think you should both have a right to transact.

but the issue with insurance today is that it is driven by tax issues and regulations that distort the market and its offerings leading to all manner of bad outcomes and curtailments of liberty.

a truly free health market would likely look quite different. "

any govt is going to have regulations.

there is no such thing as an unregulated free market in health care except in 3rd/developing world countries.

it's more than a "coincidence" that all the affluent countries have the govt involved in health care and the 3rd/developing world much less or none.

I maintain that there is absolutely no reason why a less affluent developing world country could not have free market health care.

the best chance for a country to move to a free market system are the ones that have relatively govt-free markets.

Those markets have the opportunity to demonstrate free market principles because even in less affluent countries there are always those who are affluent enough to afford some level of health care and one would think those countries would provide more free markets in healthcare.

As such, one would think there OUGHT to be even a FEW countries that we could point to as examples of less govt and more free market

RATHER than insisting that the ONLY WAY to get to a free market is to UNDO an existing govt-sanctioned system.

it just seems illogical to say the best chance for a free market is to pick systems that are already govt-laden as the best candidates.

 
At 7/10/2012 10:35 AM, Blogger morganovich said...

"any govt is going to have regulations."

why?

most DO but that is no reason that they must or should.

if the government simply enforces contracts between individuals, why must it be involved any further?

you seem to be assuming your claim here.

 
At 7/10/2012 10:37 AM, Blogger morganovich said...

larry-

the rest of your argument is basically the same as saying "well, i am fat and it would be hard to diet and exercise, so why do it?"

it's more important for fat people to do it. those that are already skinny do not benefit as much.

 
At 7/10/2012 10:47 AM, Blogger Larry G said...

re: govt regs

well no Morg, I'm not assuming - I'm looking pragmatically at the reality.

I just don't see too many govts that don't have regulations.

Perhaps we misunderstood and you were restricting your scope to only health care regs.

which would again drive us back to asking which countries in the world are best positioned already to not have regulations - as opposed to trying to undo regulations.

but are we really talking about undoing regulations or just changing them to use more "free market principles"?

it appears to me that the Whole Foods approach you cited the other day actually requires the govt to get involved - but a a different way than now - as opposed to the govt getting out all together.

and in this country, until we repeal EMTALA and it is the defacto healthcare provider of last resort, I don't think even getting rid of other regs will lead to lower prices.

Free ER health care trumps other kinds.

 
At 7/10/2012 10:50 AM, Blogger Jet Beagle said...

morganovich: "what other insurance works that way?"

Nothing else we insure has the potential to bankrupt us from recurring expenses. Recurring care for cancer could easily cost a consumer $500,000 over a few years. Recurring care for diabetes could cost tens of thousands. Recurring, non-catastrophic care for our homes or our cars does not approach such levels.

Furthermore - and probably most important - the personal risk of not receiving medical treatment is huge. The risk for not maintaining one's automobile engine is merely the early replacement cost for said engine.

 
At 7/10/2012 10:54 AM, Blogger Larry G said...

untreated diabetes type II almost always leads to organ failure, amputations and catastrophic cardiovascular damage.

the people who are uninsured and do not get intervention will go on until they need open heart surgery, kidney dialysis and in general hundreds of thousands of dollars of medical care - paid for by you and me.

Neither the anti-ObamaCare nor the free market folks seems to accept this reality.

the only way you can stop this cost from being put on taxpayers is to repeal EMTALA and MedicAid.

otherwise, we're going to pay it.

 
At 7/10/2012 10:55 AM, Blogger Jet Beagle said...

morganovich: "a truly free health market would likely look quite different."

I completely agree with that statement. But I don't believe it would be a market predominated by individually negotiated policies. IMO, consumers would use their organizations - whether it be employers or churches or fraternal organizations or whatever - to acquire bargaining power with large insurors. I also believe consumers would still opt for coverage of what some on this thread have referred to as "routine" medical care.

 
At 7/10/2012 10:59 AM, Blogger Larry G said...

" IMO, consumers would use their organizations - whether it be employers or churches or fraternal organizations or whatever - to acquire bargaining power with large insurors"

why is that not already possible?

if we can do that right now with employer-provided, why not AARP or Catholic, NAACP, etc?

Not sure exactly what keeps "affiliations" of people from establishing their own pools.

but I essentially agree that individuals are at a severe disadvantage compared to organizations.

 
At 7/10/2012 11:22 AM, Blogger morganovich said...

"Nothing else we insure has the potential to bankrupt us from recurring expenses"

i'm not so sure that's true.

the loss of a home would do this to most people if they had a mortgage. (depending on local law and level of recourse)

so would a great deal of home damage cause by somehting your policy did not cover. (like an earthquake)

 
At 7/10/2012 11:23 AM, Blogger morganovich said...

"I also believe consumers would still opt for coverage of what some on this thread have referred to as "routine" medical care."

some might. insurers might or might not provide it and costs would be reflective of that.

i certainly would not want it, but perhaps you would.

the great thing about a free market is that it allows us both to buy what we want. (assuming we can find a seller etc).

 
At 7/10/2012 11:27 AM, Blogger morganovich said...

larry-

"
I just don't see too many govts that don't have regulations."

that's not an argument though.

DO is not the same as MUST or SHOULD.

the whole foods approach doe s not require the government to be involved.

it is an attempt to find a way to worth in spite of government intrusion.

nothing about that plan REQUIRES government.

it's just steering around the government that currently exists.

you seem to be making this weird jump from does to must and should that could be used to argue for slavery in 1400 or not allowing womens suffrage in 1700.

seeking change must start with should, not does.

 
At 7/10/2012 11:32 AM, Blogger morganovich said...

" i don't see many people using cell phones. these things are never going to catch on."

that's pretty much the argument you are making if we go back to 1997.

 
At 7/10/2012 12:45 PM, Blogger Jet Beagle said...

morganovich: "the loss of a home would do this to most people if they had a mortgage. (depending on local law and level of recourse)"

You misunderstood my reply. I was not referring to catastrophic events for either homeowner's insurance or health insurance.

I argued that:

"market forces would lead health insurors to cover so-called "routine" visits to the doctor's office for all but minor medical conditions."

You then replied:

"perhaps, but quite likely not. what other insurance works that way?

My reply to your question was referring to my original statement about so called "routine" visits to the doctor and regular, but very expensive drugs. Neither recurring home expenses nor recurring automobile maintenance has the potential to bankrupt a person. Recurring treatment of many diseases does.

 
At 7/10/2012 12:51 PM, Blogger morganovich said...

jet-

i understood you, my point was that
a mortgage payment is a recurring home expense. so are property taxes etc.

deprived of the home that it provided and faced with a need to find new shelter and pay for it, such an expense would bankrupt many people.

 
At 7/10/2012 1:10 PM, Blogger Jet Beagle said...

Larry G: "Not sure exactly what keeps "affiliations" of people from establishing their own pools."

Many organizations do offer group health insurance plans, Larry.

Here's a few of the many organizations which currently offer the benefits of group buying power for health insurance:

AARP
Writers Guild of America
National Dog Groomers Association
American Institute of Certified Public Accountants
The Freelancers Union (160,000 self-employed members)
Las Vegas Chamber of Commerce

 
At 7/10/2012 1:14 PM, Blogger Jet Beagle said...

morganovich, you irritate the hell out of me sometimes.

I was referring to recurring expenses which resulted from unplanned and unexpected health conditions such as diabetes You try to offer a counter by referring to mortgage payments.

I'd rather not waste any more time arguing this point.

 
At 7/10/2012 1:56 PM, Blogger Larry G said...

" Here's a few of the many organizations which currently offer the benefits of group buying power for health insurance:

AARP
Writers Guild of America
National Dog Groomers Association
American Institute of Certified Public Accountants
The Freelancers Union (160,000 self-employed members)
Las Vegas Chamber of Commerce"

so.. what's broke then? what are we arguing about?

re: "do vs must" and "undoing" regs

I see this as what is possible - not what is "right" since what is "right" is totally subjective.

I just don't see our govt actually getting out of regulating health care but if they were really serious about it the very first thing they ought to do is repeal EMTALA and the 2nd thing would be to tax employer-provided health insurance like any other compensation.

3rd remove the 7.5% threshold on healthcare in the tax code.

These are the kind of things I see as having some possibility of happening not total de-regulation...

A more realistic approach would be to identify the top 5 or 10 things that could be changed then once those 5 or 10 get changed, go after the next 5-10...

but you've got a split country and you're restricted to what you can get passed by how much opposition to it exists.

 
At 7/10/2012 3:24 PM, Blogger morganovich said...

jet-

if logic irritates you, i'm not really sure what to say to that apart from urging you not to engage in such discussions.

you seem to be trying to make a special case where none exists.

mortgage payments on a house you no longer own because it was destroyed in an earthquake are a recurring and unexpected expense. so is the rent you need to pay on a new one.

think of the new rent as the money you would unexpectedly have to spend on diabetes.

the analogy is quite apt.

 
At 7/10/2012 4:12 PM, Blogger Jet Beagle said...

Larry G: "so.. what's broke then? what are we arguing about?"

The same thing that's always broke: government interference in the free markets.

First, individual state governments have hundreds of health insurance mandates. It is impossible for the free market to create the health insurance packages which consumers desire. That's because state legislators, bribed by physician and other medical lobbies, require insurance polcicies to include all sorts of crap.

Second, the U.S. Congress, through the McCarrann-Ferguson Act in 1945, allowed states to prevent the interstate sale of health insurance. So consumers, who can purchase Big Mouth Billy Bass or 8 Ball Leather Jackets from other states, cannot purchase health insurance from anywhere other than their own states.

As a result, competitive forces which would drive down the price of health insurance are not allowed to function.

 
At 7/10/2012 4:22 PM, Blogger Larry G said...

all other "interference" aside if Insurance companies can and do provide insurance for companies....

why can't the same approach work for non-corporate affiliations?

It would seem to be a win-win for both those without insurance and fraternal organizations looking for more members.

Seniors can buy Medigap insurance for Medicare from AARP but I'm pretty sure they don't offer non-Medicare policies.

so what's the deal? What can't organizations like NAACP or your college Alumni or your Church offer health insurance?

 
At 7/10/2012 4:24 PM, Blogger Jet Beagle said...

morganovich,

Guess I'm a glutton for punishment for trying.

There is no need to purchase insurance that covers mortgage payments after an earthquake destroys a home. Simple homeowner hazard insurance covers the loss of the home. The homeowner can either be made whole - by having his home rebuilt - or use the csah to pay off the mortgage.

With health insurance, it is often not possible to restore the insured to the condition prior to the unexpected event. Instead, the unexpected event - such as diabetes - often requires recurring costs over long periods of time.

That's why health insurance is different from homeowner's insurance or automobile insurance. Not because health insurance is not insurance. Rather, because the costs for which the insuror is obligated cannot be determined at the time the unexpected event occurs.

 
At 7/10/2012 4:31 PM, Blogger Jet Beagle said...

Larry G: "all other "interference" aside if Insurance companies can and do provide insurance for companies....

why can't the same approach work for non-corporate affiliations?"


The federal government has gamed the market in favor of the employer option.

Employers provide a benefit to employees - health insurance - which is not included in the employees' taxable income.

On the other hand, suppose employees instead received the same amount of cash from their employers in lieu of health insurance benefits. Those employees would pay income taxes on the cash wages. When those employees purchased health insurance through their fraternal organization, they would have to use after-tax dollars.

Do you understand this one reason why the employer option predominates? There are other reasons, but this is probably the major one.

 
At 7/10/2012 4:37 PM, Blogger Larry G said...

okay - so employers can provide the healthcare tax-free and people who would buy it from non-corporate affiliations could not spend that money and get a tax-deduction for spending it.

correct?

Can't do that with an HSA?

 
At 7/10/2012 5:05 PM, Blogger Jet Beagle said...

Larry G: "Can't do that with an HSA?"

I don't know. As I understand it, only high deductible health plans can be purchased using HSA funds. Putting such a restriction on plans probably inhibits their use.

 
At 7/10/2012 5:16 PM, Blogger Larry G said...

hmmm.. the plot thickens:

Humana HSA Plans
Humana offers flexible "build-your-own" health plans that let you choose from many of the features usually found only in group health plans.

Humana has recently revamped its HSA plans and rates, and now offers the most popular and competitive plan in many areas. The coverage is strong, the rates are usually very good, and there is a very large PPO network.

Humana offers numerous HSA compatible plans, allowing you to pick a plan that perfectly suites your needs. There are plans that cover you at 100% after your deductible, as well as plans with a more traditional co-payment after meeting your deductible. The most comprehensive coverage is the HumanaOne Enhanced HSA, which covers you at 100% after meeting your deductible, including prescription drugs.

http://www.health--savings--accounts.com/humana-hsa.htm

this sounds like even individuals can get tax-deductible health insurance.

Are HSAs overlooked by folks?

 
At 7/11/2012 4:39 PM, Blogger Hydra said...

That's because state legislators, bribed by physician and other medical lobbies, require insurance polcicies to include all sorts of crap.

================================

You mean like colonoscopies?

When my wifes doctor ordered a colonoscopy her isnurance took one look at the claim and though: colon cancer, get rid of her.

Which they did. The test was negative for colon cancer and everything else it is used for.

does that mean the test was a waste, or coverage for it should not be requred?

 

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