3/29/11

Comments (13)

3/29/11

Good post.

What sht priorities. Unfort the non-inclusion of the segment of the uninsured that's young/choosing not to buy insurance raise risk in the insured pool and therefore raise premiums for individuals who really need it.

3/29/11

Hey Econ,

You know I respect how you shine the torch on truth man, but I gotta speak out against this one.

One of the issues that is being casually swept under the rug is the type of coverage that healthcare companies are willing to provide you as well as what your company is willing to pay for. Let me explain...

For example, every year I get a physical. It's been the same deal for the last couple of years. This year was the FIRST YEAR EVER that I received a bill in the mail. For what? My blood test. Apparently they are only covering select blood tests now. Why? Because companies are slowly passing more of the cost onto their employees. The cost for me? 250 bucks. I just can't side with this type of view above. At the present moment, insurance is affordable but the quality/coverage is diminishing as companies (where the majority of Americans receive their benefits from) realize what a costly burden it actually is and stealthily pass it on to employees.

"Cut the burger into thirds, place it on the fries, roll one up homey..." - Epic Meal Time

3/29/11
vadremc:

Hey Econ,

You know I respect how you shine the torch on truth man, but I gotta speak out against this one.

One of the issues that is being casually swept under the rug is the type of coverage that healthcare companies are willing to provide you as well as what your company is willing to pay for. Let me explain...

For example, every year I get a physical. It's been the same deal for the last couple of years. This year was the FIRST YEAR EVER that I received a bill in the mail. For what? My blood test. Apparently they are only covering select blood tests now. Why? Because companies are slowly passing more of the cost onto their employees. The cost for me? 250 bucks. I just can't side with this type of view above. At the present moment, insurance is affordable but the quality/coverage is diminishing as companies (where the majority of Americans receive their benefits from) realize what a costly burden it actually is and stealthily pass it on to employees.

-Insurance is not affordable to all, esp those who really need coverage and who have a terminal illness where the risk/pricing is too onerous for both sides of the trade. Adverse selection. Again, the risk pool is not being repopulated with young / healthy as those individuals have diff priorities as the video aptly shows. Their non inclusion means the risk pool generally gets less healthier and more risky for insurance providers. As risk pool becomes less healthy, premiums increase to offset expected loss ratios and coverage/quality contracts to reduce costs, which also provides an offset to expected loss increases. Demographically speaking this is a trend that will continue.
-Generally companies are not obligated to shoulder coverage costs so unclear what your point is here

3/30/11

vadremc:
Hey Econ,

You know I respect how you shine the torch on truth man, but I gotta speak out against this one.

One of the issues that is being casually swept under the rug is the type of coverage that healthcare companies are willing to provide you as well as what your company is willing to pay for. Let me explain...

For example, every year I get a physical. It's been the same deal for the last couple of years. This year was the FIRST YEAR EVER that I received a bill in the mail. For what? My blood test. Apparently they are only covering select blood tests now. Why? Because companies are slowly passing more of the cost onto their employees. The cost for me? 250 bucks. I just can't side with this type of view above. At the present moment, insurance is affordable but the quality/coverage is diminishing as companies (where the majority of Americans receive their benefits from) realize what a costly burden it actually is and stealthily pass it on to employees.

3/29/11

vandremc,

In the particular case you mentioned, I think it's important to separate issues. The video I provided above shows that many of the uninsured are not those who "can't afford it," but rather people who choose not to (as evidenced by the average amount of money the uninsured spend on my other goods and services, listed towards the end of the above video).

What you seem to be talking about is issues regarding whether employees should cover insurance, why so many of them currently do, and other regulatory questions that alter the efficiency of the entire industry.

3/29/11

Econ / DurbanDiMangus,

I think the issues share a strong relationship.

The video purports the idea that while many of the uninsured claim that they cannot afford health coverage, they actually use the financial resources they otherwise would be able to spend on coverage, on leisure related items.

My postulation is that while ostensibly this may be true, the argument is actually paradoxical. The current hidden costs of coverage (i.e., additional charges that have traditionally been incorporated into basic care) actually make coverage more expensive than spending those aforementioned funds on entertainment/leisure related items.

DurbanDiMangus, I hope my position has been made more clear.

"Cut the burger into thirds, place it on the fries, roll one up homey..." - Epic Meal Time

3/29/11
vadremc:

Econ / DurbanDiMangus,

I think the issues share a strong relationship.

The video purports the idea that while many of the uninsured claim that they cannot afford health coverage, they actually use the financial resources they otherwise would be able to spend on coverage, on leisure related items.

My postulation is that while ostensibly this may be true, the argument is actually paradoxical. The current hidden costs of coverage (i.e., additional charges that have traditionally been incorporated into basic care) actually make coverage more expensive than spending those aforementioned funds on entertainment/leisure related items.

DurbanDiMangus, I hope my position has been made more clear.

Vadremc -
The argument is not that paradoxical. I explained to you why risk is increasing, driving costs higher and quality/coverage lower. What do you think of these drivers/catalysts, agree/disagree?

Separately, I have yet to see any strategy/plan to incentivize/bring the people who CHOOSE (as econ aptly put it) to be uninsured due to their spending priorities INTO the risk pool. If they buy insurance then their addition to the risk pool DIMINISHES risk for the entire risk pool as they are benign sets of risks that will likely not generate losses, decreasing aggregate expected losses and therefore likely reducing/shifting down the entire premium curve charged to the riskiest insurance buyers who really need it and currently can't afford it.

I think providing incentives to the ppl who CHOOSE to be uninsured to get insurance should be a focus, not explicit regulation of insurance cos...

3/29/11

much bigger issue is those who don't want insurance being forced to pay for it/being taxed for not having it

3/29/11

I tried getting health insurance in the private market yesterday, healthy non smoking 26 yr old, i was quoted 1200 dollars a month. 100 bucks a month sacrifice of booze isn't gonna cover you.

3/30/11

Health insurance is regulated by the state. If we knocked that bullshit off we could have national competition. That would at least spread the risk more.

I also support capping profits. Utility providers are heavily regulated, yet make money and provide a service some would call a right. How health insurance operates as if it is providing a consumer discretionary product is beyond me.

Make health insurers like power companies. Sleepy dividend plays that provide a basic service. Set up a tier system so you can still adjust for risk. Cut out a lot of the admin costs and start pushing down prices.

Whenever I go to the doc, i see an NP. She checks menout and I'd something is up I go to a specialist. Let's face it, at that level it is a decision tree. I don't need a high prices doc to run blood tests.

Anyone even thinking about socialized healthcare without first addressing the problems is out of their mind.

3/30/11
ANT:

Health insurance is regulated by the state. If we knocked that bullshit off we could have national competition. That would at least spread the risk more.

I also support capping profits. Utility providers are heavily regulated, yet make money and provide a service some would call a right. How health insurance operates as if it is providing a consumer discretionary product is beyond me.

Make health insurers like power companies. Sleepy dividend plays that provide a basic service. Set up a tier system so you can still adjust for risk. Cut out a lot of the admin costs and start pushing down prices.

Whenever I go to the doc, i see an NP. She checks menout and I'd something is up I go to a specialist. Let's face it, at that level it is a decision tree. I don't need a high prices doc to run blood tests.

Anyone even thinking about socialized healthcare without first addressing the problems is out of their mind.

Aren't utility companies essentially run by the gov't (in that they're told exactly which prices to charge, etc.)? With regards to utilities, there's an economic case that the industry can only be run by a natural monopoly, which makes it a unique industry. I suspect some people even argue for deregulating the utility industry, but I digress...

If you cap profits in the health insurance industry, I would argue you're making a mistake. Let's not forget the crucial role that profits play in an economy as a signal, and let's also not forget the way in which excessively high profits will increase competition. Lastly, profits margins are not even that high in the health insurance industry, despite all the rhetoric: http://1.bp.blogspot.com/_otfwl2zc6Qc/SoMLoWBKM4I/...

In regards to your NP, specialist, etc. problem, I totally agree. However, that's precisely because it's such a regulated industry that you get these massive inefficiencies. As Milton Friedman once said, the AMA is the largest, most powerful union out there.

4/1/11
econ:
ANT:

Health insurance is regulated by the state. If we knocked that bullshit off we could have national competition. That would at least spread the risk more.

I also support capping profits. Utility providers are heavily regulated, yet make money and provide a service some would call a right. How health insurance operates as if it is providing a consumer discretionary product is beyond me.

Make health insurers like power companies. Sleepy dividend plays that provide a basic service. Set up a tier system so you can still adjust for risk. Cut out a lot of the admin costs and start pushing down prices.

Whenever I go to the doc, i see an NP. She checks menout and I'd something is up I go to a specialist. Let's face it, at that level it is a decision tree. I don't need a high prices doc to run blood tests.

Anyone even thinking about socialized healthcare without first addressing the problems is out of their mind.

Aren't utility companies essentially run by the gov't (in that they're told exactly which prices to charge, etc.)? With regards to utilities, there's an economic case that the industry can only be run by a natural monopoly, which makes it a unique industry. I suspect some people even argue for deregulating the utility industry, but I digress...

If you cap profits in the health insurance industry, I would argue you're making a mistake. Let's not forget the crucial role that profits play in an economy as a signal, and let's also not forget the way in which excessively high profits will increase competition. Lastly, profits margins are not even that high in the health insurance industry, despite all the rhetoric: http://1.bp.blogspot.com/_otfwl2zc6Qc/SoMLoWBKM4I/...

In regards to your NP, specialist, etc. problem, I totally agree. However, that's precisely because it's such a regulated industry that you get these massive inefficiencies. As Milton Friedman once said, the AMA is the largest, most powerful union out there.

Econ & ANT,

You both make some compelling points. Econ, I'm not sure your video voices both sides of the debate; seemingly only bolstering your position as explained by someone who is an academic and not a practitioner in the field. Visit this site to gain some additional perspective: http://www.pnhp.org/facts/single-payer-faq#rationing

I agree that over-regulating the industry only compounds the problem. But let's not pretend that "regulation" is the sole problem. The insurance companies fight to maintain supremacy and exclusivity within their state boundary (they truly don't want competition) and state-wide competition is a position that I would support; allowing for competition to play a critical role in price determination. (I support your position in this ANT) They merely play the game of RISK as it relates to the healthcare of Americans; allowing for regions to be dominated by select brands.

The question of healthcare is in my opinion, an ideological one. There are those that believe it should be run as a PURELY as a business, and there are those that believe it should be a natural right. I believe capping profits reinforces the latter. We would be here all day trying to persuade people that the aforementioned is true, so I will leave that for another time (potentially another post Econ?)

And as far as not needing a blood test/LFT etc., I couldn't disagree with you more ANT. Think of it as a true deep dive assessment of your wellness. If you dropped your car off at a mechanic (assuming you own one being in NY) would you just accept a quick glance over and a "thumbs up"? You don't go to the mechanic AFTER your brakes go out on you on the highway (well you do, but chances are your car will be totaled and so will you), you go periodically beforehand, so that you can manage your driving behavior until they are changed. Preventive care vs Emergency care. The US insurance business prefers the latter.

"Cut the burger into thirds, place it on the fries, roll one up homey..." - Epic Meal Time

4/9/11
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