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willholloway

The idea that the lack of competition between states is the reason for high health insurance premiums is a red herring.

The reason premiums are high is that costs are high, and our population is obese, disease prone and litigious.

If we want to contain costs we have some options:

1) Public option/Medicare for all could save us 10-20% in parasitical insurance company costs/administrative overhead.

2) We find solutions for obesity. Obesity is the #1 driver of increased health costs in America.

3) We stop holding doctors/pharma financially responsible for bad outcomes outside of their control through the legal system.

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Premiums also saw a large increase due a cynical and intentional move by the GOP congress to withhold funds from insurers that were initially promised for the first few years while they sort their pricing out.

Part of the initial law were "high risk corridors" to limit the losses for insurers that initially mispriced their ACA plans. The insurance companies had to make a ton of assumptions about the age, health, and wealth of the populations who would sign up for their plans. To make sure they didn't accidentally bankrupt themselves, the law provided funds to limit their losses for the first three years of the exchanges (2014-2016). In the first year, they had a shortfall as the population was older and sicker than expected, so CMS was going to cover the $2.5 billion gap but congress refused to let them pay these user fees.

The GOP knew that the premium changes would come during the election season, so they denied funding for the high risk corridors last year. To give themselves room against mispricing, the insurance companies predictably raised premiums beyond where they would otherwise have been. Other insurance companies decided they didn't want the risk, so they pulled out of the marketplaces.

The election season was rife with announcements about "20% premium increases" and "xx Insurance company exits the exchange market". Millions of people get to pay more for health insurance but at least their guy won the race.

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The present state of affairs is that everything is a red herring. The health care system is so convoluted, with business entities inside business entities paying other business entities, that it's impossible to know where the money goes, so we have no idea what makes it so expensive.

Somebody is gouging us, but we will never know who, and everybody can point to somebody else, or to "society," but we just don't know.

Chances are, everybody who can make money while covering their tracks through a web of business entities, is gouging us.

One potential advantage of the government owning the whole system, is that it would facilitate figuring out what the costs actually are. This may be why other civilized countries pay half what we pay. It's a saying in business, that you can't manage what you can't measure.

Yes. Check out the pharmacy benefit management industry. That's a multi-billion dollar industry which does something that should be entirely unnecessary. Drug companies overcharge for prescription drugs, then pharmacy benefit management companies make bulk deals to negotiate them down while taking a cut.

I've always thought that the famous line about "let customers shop across state lines" should be better formulated as

"let insurance companies shop for the best state"

Meaning, when customers have the ability to buy across state lines, the true competition becomes not consumers shopping for insurance, but STATES competing for health insurance COMPANIES to set up shop in their state- offering whatever it takes-- handing over amazing liability protections, tax giveaways, dropping regulatory standards-- all to get them to create jobs in the state.

The result is that (A) one or two financially strapped state governments give the industry whatever they ask for, promising them minimum regulation/oversight and low/no taxes, then (B) the entire industry moves there, where they further consolodate power. (C) companies regulated in other states (with safer products and actual responsibility to their customers) can't compete fairly, so they either move to that state or go out of business, resulting in (D) fewer choices for customers, poor quality products, higher prices, and more abuse and negligence from the companies.

I've heard this expressed as a "race to the bottom", which I always thought was a really confusing way to say it without context.

What makes me think this is going to happen? Watch the Secret History of the Credit Card documentary on Frontline about how this exact same thing happened in that industry.

http://www.pbs.org/wgbh/pages/frontline/shows/credit/

The CC industry "state-shopped" to find a state (South Dakota I think it was) that would let them get away with just about anything. At that point, every major player moved there, and suddenly credit cards became super abusive to customers and there was no recourse (until very recently with the consumer financial protection bureau...)

Wrong. The main problem with the US system is the outrageous level of corruption and greed being displayed by the Health Industrial Complex of pharma, hospitals, service providers, device makers, and insurance companies. All of them together infiltrate the government and collude to fix prices and line their pockets at the expense of the taxpayer, and at the human cost of literally hundreds of thousands, of not millions of lives.

In advanced Western countries, you see many different configurations for functioning health care systems. Some do insurance based models, others do single payer, others are hybrids. The issue is not about choosing which configuration of system, it is about rooting out the disgusting level of corruption that exists currently in the system.

The ACA did nothing to tackle this underlying issue.

Or instead of coming up with our own lists, just look at what other countries are doing?

The UK is doing OK with the NHS at half the US cost as a fraction of GDP. Singapore is doing at least as good at about a quarter of the costs.

American combines the worst of government and private healthcare. The UK does a decent job with government healthcare. And Singapore combines the best of government and private healthcare.

http://econlog.econlib.org/archives/2008/01/singapores_heal....

The NHS can barely stay afloat financially year to year... https://www.kingsfund.org.uk/publications/deficits-nhs-2016

Yes. But they are spending vastly less than the US.

I put some of this blame on the hospitals themselves as well. The fact is that I have no idea what I'm going to pay when I get to a hospital or doctor's office. They won't tell you anything up front. By the time you know what they cost, you're on the hook for some ridiculous amount. They won't give estimates, you can't shop around.

And medical coding to figure out what you're paying for and what a normal price should be is ridiculously hard to understand. Some of this is going to be their response to a litigious society, but you can't use that excuse for all of it.

Also, if someone doesn't have insurance, the fact that the hospital puts you on the hook for the full bill is ridiculous. Insurance isn't paying 100%, they are discounted crazy amounts, even only paying 20% in some cases. But you don't get this discount from the hospital. If you show up without insurance, you will be charged the full amount, less what you can negotiate on the spot. And most people don't know they can even try to negotiate it.

I agree that the insurance companies are a huge problem, but I don't think the hospitals and doctors' offices themselves should be absolved from their share of the blame.

> Also, if someone doesn't have insurance, the fact that the hospital puts you on the hook for the full bill is ridiculous. Insurance isn't paying 100%, they are discounted crazy amounts, even only paying 20% in some cases. But you don't get this discount from the hospital. If you show up without insurance, you will be charged the full amount, less what you can negotiate on the spot. And most people don't know they can even try to negotiate it.

And what happens with the majority of people who don't have insurance, they don't pay it. So the costs get eaten by the hospital and eventually by everyone else that can pay.

In that respect, we have socialized healthcare already. It's just a horrible implementation.

> the majority of people who don't have insurance, they don't pay it

Exactly so. They don't pay it because they can't. And they're ruined. Even people who have insurance -- good insurance -- can be ruined. This system is the ultimate form of price discrimination, perfectly tuned to extract the optimal amount of money from the consumer who has literally no pricing information, and maximize the profits of the business. When insurance companies pay out, it's referred to as "loss".

Markets and the profit motive may be "efficient", but they're not optimizing for health outcomes, and certainly not optimizing for morality. Insurance companies ultimately cannot be part of the equation.

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