Why Your Health Insurer Doesn’t Care About Your Big Bills
propublica.org
propublica.org
Wow. Great example of free market distortions that don't work. Now if there was true competition in the field, a company would never be able to get away with this.
Or, more technically: health care does not meet the requirements for a "free market", so cannot exist in principle.
Lack of transparent utilities at the time of transactions is more of an issue.
Outside of libertarian lala-land, most U.S. citizens are limited to three, two, or oftentimes, just one healthcare insurer. Also, most U.S. citizens will pay anything to not die.
"la la land" implies people are unaware of reality. Libertarian's by and large aren't naive. They know what reality is. They realize people don't have choice and want to change that by opening up competition for pharmaceutical sales and insurance across state borders and even country borders.
Just because something is far from the reality of current day does not mean it doesn't have merit or that the people who want it are la la land.
Imagine a world where if a drug is approved in the EU but not our FDA then we can still buy it. Or a world where if a drug is cheaper in Canada we can buy it from there. Or if the people on the other side of the border between two states has lower premiums than I can actually buy that plan without moving to the other state.
And further more, insurance and drug companies will feel the market pressure of consumers having real choice.
Doesn't seem that "La La" to me.
This assumes that the issue here is a regulatory failure, rather than intentional price discrimination on the price of drug companies.
Forcing the entire world into a single market with the same prices would raise drug prices on most of the world, without necessarily reducing prices meaningfully in the US.
He resents the implication that libertarians are delusional, and says that they "know reality". But then, attempting to buttress his realism, he implores the audience to "imagine" a world where everything works according to his will, or "imagine" a promised land just around the corner, or "imagine" this or that.
Religious cognitive dissonance is fairly weird.
And I agree, taken in isolation you are right. There is no guarantee that opening up the markets will lower prices. In fact, as you say, the opposite might happen.
But, I am also assuming that opening free trade between markets (not merging into one giant market as you say) will produce competition. Not just with insurers but also with pharmaceutical companies and safety agencies.
On the safety front if there was some reciprocity between safety agencies that the pharma company doesn't have to have their drug approved in every country that they want to sell in.
Now, you will say there is no guarantee big pharma will pass along that savings but...
- These savings should allow new entrants into the market by lowering the barrier of entry
- It allows multiple drugs that treat the same illness (but are not patent infringing) to compete. As opposed to currently it can be years (if ever) for a foreign drug to enter the US marker.
Edit: To summarize. The pharma and insurance companies can charge what they want because they are a monopoly. You are assuming the monopoly will continue when trade is opened. I am more optimistic if it can be executed well as opposed to just blind deregulation.
"...every time health care costs rose by a dollar, an employee’s overall compensation got cut by 52 cents."
When you read things like this, you should be remembering all those articles you saw about "the widening wealth gap." This is one of the mechanisms by which wealth is extracted from what's left of the middle class and given to wealthy shareholders.
And when you read...
"The hospital and insurance company had agreed on a price and he was required to help pay it. It’s a three-party transaction in which only two of the parties know how the totals are tallied."
...you should be reminded of the now commonplace idea usually mentioned regarding Facebook et al: If you're not paying (your own medical costs, directly), you're the product. The analogy isn't quite one-to-one, but the insurer kind of sells you to the hospital. But then the hospital wants its cut too. So they work out a deal. Your illness, to either of the two companies, isn't a misfortune; it's an opportunity. They jack up the price and basically end up splitting the profit.
It needs to be regulated. But legislators beholden to those rich shareholders will fight that idea, and they'll tend to hide it behind some deep-sounding philosophical argument about free markets that they don't actually believe.
"How much does that big Mac cost?" "Eat one. I will then send a bill to your food provider. They will tell you what share of the price, made up behind you back & after the fact, you are responsible for paying."
They are always a major payer and so hospitals will do what it takes to be Medicare certified. In high density areas there can be enough rich people for a hospital to not bother.
1) Not spending more than they captured in premiums in current year.
2) Increase of cash flow.
Once you combine these two you realize what insurance companies are looking to get steady increase in medical costs over long time. And medical service providers are playing along.
> No, common sense says people and companies will chose providers with best coverage at lowest price.
This is basically the argument Comcast uses to justify their de facto monopoly. In Comcast's case, their "competition" doesn't even exist on the same scale (which is hardly competition).
If the market were really a "free market" there would be viable options between insurance companies for the insured. Sure you can pick your doctor, and to some extent your plan, but does your company offer you multiple choices for where your health benefits come from?
That's actually terrifying! In a situation like this, why can't the authorities finally admit that the society as a whole has a problem, and adopt the European model where everyone is given free medical care?
It's just that we'd like our health care costs to be closer to the cost of delivery than to the realized value.
And if you actually use it, then you are talking about another $5,000 - $7,000 in yearly out of pocket max spending.
So conceivably, a very sick person is spending $14,000 a year to keep themselves alive
Your argument is that this somehow isn't worth $14,000 a year?
Like I say, It'd be great if US prices were closer to cost of delivery (cost assuming reasonable regulation).
however as you say, we want the cost of the product/service that is keeping you alive to be near the cost of what it actually costs to deliver that result.
In the case of nearly all drugs, a $100 brand name pill really only costs $1 per bottle to manufacture, with a lot of profit, legal and lobbying fees, and salary bloat baked into the margins along the way.
So $14,000 a year really honestly should be around $1,400 a year. Like, if i get my appendix out, and I pay $1,400, the hospital and surgeon are still making awesome money. It just so happens that in the US, they've inflated the price tag of that surgery to $80,000 lol
How did this little gem sneak into the ACA? It seems like it was put in by somebody who doesn't understand game theory.
It seems safe to say that, even at the time, the number of insurers was nowhere near sufficient (in any given geographic area). That number is even lower today, something feared by the law's critics.
There are some other shaky assumptions built in, as well, including the one that price alone is enough to win more business, even assuming identical/equivalent networks (another shaky assumption). A reputation for terrible claims practices might be enough to dissuade someone from saving that extra $3/month in premiums.
Either Obama and the Democrat super majority of 2010 were complete idiots when they wrote the ACA or they fleeced the American people with a false bill of goods. Note that “or” is meant to be interpreted as the Boolean algebra definition.
It certainly doesn't help that the GOP systematically blocks any attempt to reduce the influence of private industry in health care. Medicare manages to control costs, but a Medicare-for-all proposal never had a chance of making it through congress because it needed GOP votes to pass.
If one party consists of "complete idiots", the other consists of corporate lackeys and paid shills.
a Medicare-for-all proposal never had a chance of making it through congress because it needed GOP votes to pass.
"the Democrat-controlled House and Senate committees adopted nearly 190 Republican amendments while writing the legislation, according to data compiled by The New York Times."
Source: https://www.nytimes.com/interactive/2017/07/21/us/health-car...
To this day, NYT will not acknowledge how phony their financial assessments are with respect to the billions of losses via just the Risk Corridors and community centers. There was more than a $5.3 billion deficit in Risk Corridor spending for 2015 alone[0]. Enrollment was overestimated by the CBO by over 100% even while Obama was still in office[1]. And the numbers are still in flux as insurers who didn't get all the bailouts they were "promised" successfully sue for hundreds of millions[2].
[0] http://www.modernhealthcare.com/article/20161205/NEWS/161129...
[1] http://thehill.com/blogs/congress-blog/healthcare/309902-oba...
[2] https://ecf.cofc.uscourts.gov/cgi-bin/show_public_doc?2016cv...
What crocodile tears! Democrats bent over backwards to convince moderate Republicans to support the bill, and adopted many changes in committee. No GOP senators were going to be caught dead actually voting for an amendment on the floor, so they made their changes in private. Plus, Scott Brown's election meant that the law couldn't be amended or reconciled anyway.
But this has nothing to do with Medicare-for-all: it was killed because Joe Lieberman refused to vote for any bill containing such a provision. So if even one GOP senator had supported the idea, we'd all have access to Medicare. I made a factually true statement.
It didn't sneak in.
The issue was that before the ACA we had insurers that were below 60%.
They managed this by cutting people off of healthcare once they started using it aka recission panels.
The problem is that the ACA is a working solution and was meant to be updated once we got real data as to how things were or were not working. Of course, that was before Republican intransigence.
Personally, I'm glad for Republican intransigence. We're going to get to single payer long before I ever expected to.
I think you're right, but I think it will take a pair of full pendulum swings:
1. The GOP gets its way, and trashes the ACA more than it already has.
Followed by:
2. A huge backlash, including "middle America" who finally realize they shouldn't vote for the people most interested in cutting the programs they actually depend on.
I just worry the gap in time between #1 and #2 will be drawn-out, painful and; to some; deadly.
The GOP (barely) failed to hack up the ACA this Congressional term, and I would be shocked if they came out of the midterms in the same or better shape than they're in right now.
More shocked than when Trump won in 2016?
Healthcare in America is terminally ill. In it's current form, commercial insurance, like Aetna in this article, are rewarded for pumping up the total cost of care as big as possible while keeping their members just healthy enough to dump off at the doorstep of medicaid when they're old enough to qualify for it.