service, not cost… Like if they ran your card for every individual item
I’m not really following the point of the analogy.
If cost doesn’t matter, I’d just give them my card and they can run it as often as they like. That’s basically how it works on cruise lines, you set up a payment system and they scan your cruise card with each transaction. It’s not an issue at all.
individual plans are so personalized
Right, and that’s because the policy holder usually isn’t the customer, the employer is.
Health insurance would likely be a lot simpler if the average policy holder could switch insurance, especially if there’s no open enrollment period (like car insurance, I can shop rates anytime and understand what I’m buying pretty easily).
delay in care due to billing issues with private insurance
No, there was no delay in care. Once I picked the option, I got the procedure done in the next week or two.
The only delay was because I wanted the quote before picking the solution, and that’s a totally artificial limitation that can be fixed by changing how insurance works (i.e. give me the cash price, and I’ll figure in the deductible and whatnot).
You’re right, the problem is paperwork, which is why we should give the insurance companies fewer options to reject claims. Eliminate or automate the authorization step. Care providers should never need to talk to anyone at the insurance company.
Why would an insurance company want to attract uninsured people?
Higher risk just means higher costs. They can still collect some percentage of premiums, so why would they turn it down?
you have no idea the average cost of healthcare people accumulate during their lifetimes
You’re right, and those numbers are hard to come by since most studies/articles assume Medicare in retirement and focus on out of pocket costs. If I was proposing actual policy, I’d do my due diligence, but for this kind of discussion, I use what’s readily available.
65+ insurance is indeed unique, hence why I mentioned an escrow system. Basically, you prepurchase insurance including end of life care. That amount of money buys you a certain guaranteed tier of end of life care, even if your individual costs exceed that. I’m guessing that escrow is something like $300-500k for basic EOL care, plus some extra for routine medical care. But I only have mediocre data to work from. If you have a good source, I’m interested.
I don’t know how practical it is, it’s just an idea for an alternative to Medicare for the wealthy. But honestly, just uncapping income for paying in and expanding Medicare a bit for poorer people is probably more reasonable.
I don’t think you quite understand that the people whom work in healthcare do so because they want to help people
Sure, and the same is true for education. And the problems with both are pretty similar:
they’re restricted in how they do their jobs
there’s a lot of paperwork, and paperwork sucks
there absolutely is a point where the career isn’t worth it
In many areas, the government has a near monopoly on education, yet the problems persist. Why should we expect medicine to be much different? Once government has a near monopoly on something, it becomes very political.
Maybe something like the public option doesn’t have as many tradeoffs, IDK, but socialized medicine certainly would. I’d only be in favor of a public option if care providers received the same amount from cash customers vs Medicare customers, and that amount is transparent and publicly auditable (i.e. if Medicare wants to fight high prices, that should benefit cash customers). That doesn’t happen today with the privatized system, so that’s where my focus is.
Privatized insurance isn’t the goal here, privatized medicine is. If we want to subsidize that for the poorer end of the income range, I’m fine with that, but the majority should be expected to pay for a large portion of medical care, otherwise market forces don’t work properly.
insurance companies purposely create inefficient and archaic systems so their customers won’t utilize their services as often
They do it because it doesn’t cost them customers. I can’t vote with my wallet and switch my insurance, I can only beg my HR department to offer something different. I am not the customer here.
Many customers are willing to pay a bit more in other industries to avoid BS, I don’t see why that should be any different for health insurance.
The reason we have the system we do is because government incentivizes company-provided health insurance. We should instead encourage people to select their own plans. The ACA increases barriers to rejecting company insurance and doubles down on involving employers in health insurance decisions.
Either we need to completely put patients in control of their insurance or provide it as a public good. The current middle ground is worse than either extreme imo.
they could just change plans every year they needed an expensive operation
Auto insurance seems to work just fine with this. If I make lots of claims with one insurer, that slate won’t just be wiped clean with the next one.
If customers can easily switch, that should encourage insurance companies to lock in customers with longer term policies to spread out the risk.
And insurance isn’t really a gamble, it’s actually quite the opposite, a way to reduce risk. The insurance company doesn’t expect any particular individual customer to be profitable, they just expect that their customers will be profitable on average. Individuals buy insurance knowing that they statistically don’t get value from the insurance, they’re merely getting it to reduce their own financial risk. For an insurance company, it’s like buying an index fund instead of individual stocks, and for individuals it’s like buying an annuity instead of stocks.
You are comparing individual self funded plans to those offered by your work?
Yes. I’m comparing individual, non-subsidized ACA plans with those offered by my work. My work only offers high deductible plans with a premium and HSA contribution, and I’m comparing against ACA HSA plans with a similar deductible and max out of pocket. I’ve never had a copay, everything has been a relatively simple deductible.
Specific details certainly differ, but I think it gets me in the ballpark.
And this is for a reasonably large company. We have something like 3000 employees, so it should be big enough to benefit from collective bargaining. I haven’t run the numbers for a couple years (I compared ACA when self-employed vs new company), so things could have changed. I like this method because costs are both transparent, and I actually estimate my costs (and subsidy) if i decide to stop working in a spreadsheet. I’m certainly no expert, but I do try to be reasonably thorough.
And yeah, I’ll probably redo the numbers soon. I generally do this around tax season because I like to estimate my taxes to see how close I am (was really close last year), and I have a section to compare expected total costs of care for the two plans my company offers (only difference is deductible, premium, and max out of pocket) and a comparable ACA plan (those numbers are publicly available). Specific plan details vary, and it’s not something I can get super accurate with (how do you put a price on a procedure I’m unlikely to need?), but hopefully it’s close.
If you’re interested, maybe I’ll run the numbers this weekend and reply with the details. I’m not a medical or insurance expert, but I am very interested in personal finance and actually enjoy spending a few hours crunching numbers.
The amount they would have to raise rates exceeds their clients ability to pay
Maybe. But that’s also assuming healthcare costs stay stagnant. If we drastically reduce the complexity of dealing with insurance, we also reduce the costs to insurance, which may be enough to offset an increase in claims.
All the paperwork is waste, and it’s getting to be a massive problem, but it suffers from a prisoner’s dilemma-type issue (an individual company is better off complicating the process in the short term, but if everyone does that, net costs go up) so the current setup won’t resolve itself.
If insurance companies are not good enough to cover emergent healthcare what’s their point?
Insurance companies exist to cover extreme financial burdens, like developing cancer or other chronic conditions. Basically, things that could bankrupt you.
The issue with ER is that it often goes against your will, and getting financial consent could be the difference between life and death. What are you going to do if insurance rejects your claim? What if someone else calls an ambulance for you and you can’t pay? What if you’re a tourist and you don’t understand the US medical system? There’s just way too many weird cases to the point where we can’t just expect insurance companies to take the hit here.
Publicly funded ER solves those problems and can protect emergency care providers from lawsuits and whatnot so they can focus on providing care. Once the patient is stabilized, they can make decisions for ongoing care, and that’s where insurance should get involved.
In general, if something is involuntary or a natural monopoly, it should be publicly provided. That’s absolutely the case for emergency care (I can’t pick the ambulance company someone else calls for me). But routine and chronic care absolutely is voluntary and isn’t a natural monopoly.
If you can get free healthcare at emergency rooms instead of being insured, why not just go to the ER?
The ER would reject you and potentially fine you for nonemergency care. Just like calling 911 for non-emergencies.
I’m not really following the point of the analogy.
If cost doesn’t matter, I’d just give them my card and they can run it as often as they like. That’s basically how it works on cruise lines, you set up a payment system and they scan your cruise card with each transaction. It’s not an issue at all.
Right, and that’s because the policy holder usually isn’t the customer, the employer is.
Health insurance would likely be a lot simpler if the average policy holder could switch insurance, especially if there’s no open enrollment period (like car insurance, I can shop rates anytime and understand what I’m buying pretty easily).
No, there was no delay in care. Once I picked the option, I got the procedure done in the next week or two.
The only delay was because I wanted the quote before picking the solution, and that’s a totally artificial limitation that can be fixed by changing how insurance works (i.e. give me the cash price, and I’ll figure in the deductible and whatnot).
You’re right, the problem is paperwork, which is why we should give the insurance companies fewer options to reject claims. Eliminate or automate the authorization step. Care providers should never need to talk to anyone at the insurance company.
Higher risk just means higher costs. They can still collect some percentage of premiums, so why would they turn it down?
You’re right, and those numbers are hard to come by since most studies/articles assume Medicare in retirement and focus on out of pocket costs. If I was proposing actual policy, I’d do my due diligence, but for this kind of discussion, I use what’s readily available.
65+ insurance is indeed unique, hence why I mentioned an escrow system. Basically, you prepurchase insurance including end of life care. That amount of money buys you a certain guaranteed tier of end of life care, even if your individual costs exceed that. I’m guessing that escrow is something like $300-500k for basic EOL care, plus some extra for routine medical care. But I only have mediocre data to work from. If you have a good source, I’m interested.
I don’t know how practical it is, it’s just an idea for an alternative to Medicare for the wealthy. But honestly, just uncapping income for paying in and expanding Medicare a bit for poorer people is probably more reasonable.
Sure, and the same is true for education. And the problems with both are pretty similar:
In many areas, the government has a near monopoly on education, yet the problems persist. Why should we expect medicine to be much different? Once government has a near monopoly on something, it becomes very political.
Maybe something like the public option doesn’t have as many tradeoffs, IDK, but socialized medicine certainly would. I’d only be in favor of a public option if care providers received the same amount from cash customers vs Medicare customers, and that amount is transparent and publicly auditable (i.e. if Medicare wants to fight high prices, that should benefit cash customers). That doesn’t happen today with the privatized system, so that’s where my focus is.
Privatized insurance isn’t the goal here, privatized medicine is. If we want to subsidize that for the poorer end of the income range, I’m fine with that, but the majority should be expected to pay for a large portion of medical care, otherwise market forces don’t work properly.
They do it because it doesn’t cost them customers. I can’t vote with my wallet and switch my insurance, I can only beg my HR department to offer something different. I am not the customer here.
Many customers are willing to pay a bit more in other industries to avoid BS, I don’t see why that should be any different for health insurance.
The reason we have the system we do is because government incentivizes company-provided health insurance. We should instead encourage people to select their own plans. The ACA increases barriers to rejecting company insurance and doubles down on involving employers in health insurance decisions.
Either we need to completely put patients in control of their insurance or provide it as a public good. The current middle ground is worse than either extreme imo.
Auto insurance seems to work just fine with this. If I make lots of claims with one insurer, that slate won’t just be wiped clean with the next one.
If customers can easily switch, that should encourage insurance companies to lock in customers with longer term policies to spread out the risk.
And insurance isn’t really a gamble, it’s actually quite the opposite, a way to reduce risk. The insurance company doesn’t expect any particular individual customer to be profitable, they just expect that their customers will be profitable on average. Individuals buy insurance knowing that they statistically don’t get value from the insurance, they’re merely getting it to reduce their own financial risk. For an insurance company, it’s like buying an index fund instead of individual stocks, and for individuals it’s like buying an annuity instead of stocks.
Yes. I’m comparing individual, non-subsidized ACA plans with those offered by my work. My work only offers high deductible plans with a premium and HSA contribution, and I’m comparing against ACA HSA plans with a similar deductible and max out of pocket. I’ve never had a copay, everything has been a relatively simple deductible.
Specific details certainly differ, but I think it gets me in the ballpark.
And this is for a reasonably large company. We have something like 3000 employees, so it should be big enough to benefit from collective bargaining. I haven’t run the numbers for a couple years (I compared ACA when self-employed vs new company), so things could have changed. I like this method because costs are both transparent, and I actually estimate my costs (and subsidy) if i decide to stop working in a spreadsheet. I’m certainly no expert, but I do try to be reasonably thorough.
And yeah, I’ll probably redo the numbers soon. I generally do this around tax season because I like to estimate my taxes to see how close I am (was really close last year), and I have a section to compare expected total costs of care for the two plans my company offers (only difference is deductible, premium, and max out of pocket) and a comparable ACA plan (those numbers are publicly available). Specific plan details vary, and it’s not something I can get super accurate with (how do you put a price on a procedure I’m unlikely to need?), but hopefully it’s close.
If you’re interested, maybe I’ll run the numbers this weekend and reply with the details. I’m not a medical or insurance expert, but I am very interested in personal finance and actually enjoy spending a few hours crunching numbers.
Maybe. But that’s also assuming healthcare costs stay stagnant. If we drastically reduce the complexity of dealing with insurance, we also reduce the costs to insurance, which may be enough to offset an increase in claims.
All the paperwork is waste, and it’s getting to be a massive problem, but it suffers from a prisoner’s dilemma-type issue (an individual company is better off complicating the process in the short term, but if everyone does that, net costs go up) so the current setup won’t resolve itself.
Insurance companies exist to cover extreme financial burdens, like developing cancer or other chronic conditions. Basically, things that could bankrupt you.
The issue with ER is that it often goes against your will, and getting financial consent could be the difference between life and death. What are you going to do if insurance rejects your claim? What if someone else calls an ambulance for you and you can’t pay? What if you’re a tourist and you don’t understand the US medical system? There’s just way too many weird cases to the point where we can’t just expect insurance companies to take the hit here.
Publicly funded ER solves those problems and can protect emergency care providers from lawsuits and whatnot so they can focus on providing care. Once the patient is stabilized, they can make decisions for ongoing care, and that’s where insurance should get involved.
In general, if something is involuntary or a natural monopoly, it should be publicly provided. That’s absolutely the case for emergency care (I can’t pick the ambulance company someone else calls for me). But routine and chronic care absolutely is voluntary and isn’t a natural monopoly.
The ER would reject you and potentially fine you for nonemergency care. Just like calling 911 for non-emergencies.