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Comment by godzillabrennus | Hacker News Reader

Before my father qualified for Medicare he figured out this hack.

He has a severe chronic condition.

Health insurance for him as a self employed person at the time was $4k/month

Tuition at the local public college at the time came with a senior discount for folks in his age group and insurance for $10k/year.

He loved the classes and saved a bundle on health insurance.

He needed a life flight and weeks of hospitalization related to his chronic illness. The insurance had him covered. I think it was a non-trivial payout for the insurance company.

The following year the insurance company changed the terms with the university to charge more if you didn’t live on campus.

My father went to a different school with a different insurer after that.

He’s finally on Medicare.

We shouldn’t tie healthcare coverage to employment in our country.

It’s stupidly expensive.

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Tying health insurance to your employer is incredibly dumb. It means insurarers compete for your employers business, not yours, which influences their incentives. It means if you don't like your insurance company, your only option is to change jobs. It disincitives people from being self employed, because then health insurance is prohibitively expensive.

It's not dumb, it's smart for employers who want to trap employees.

So... it's dumb for 999/1000 people.

This was by design. Didn't the dems do this in '96?

All I see from '96 is HIPPA. What are you referring to?

How does it trap employees? If I’m considering switching jobs, wouldn’t my new employer offer the benefit also?

Not all providers and plans are the same, so some treatment for some health condition you have that is 75% paid for by insurance might go down to 25% or even 0% (not covered) with your new employer's health insurance plan. You also might just not have another job to go to immediately, like what happened at the beginning of Covid-19, in which you'd either need to pay for your previous insurance in full or cancel treatment.

This happened recently to someone I know. They were offered a significant pay bump and a leadership position in a well-respected organization that lines up with their personal goals, but the new employer doesn’t offer insurance.

They eventually decided to take the job, but having to even consider healthcare access in that calculus is ridiculous.

Suppose your employer is less than ideal but you’re not particularly confident in your ability to get another job should you be laid off. A lot of people feel trapped in this situation every day.

Not everyone has the skills and experience to be in demand. A lot of people feel their current job is the only thing standing between them and the food stamp line. These people should not have to worry about getting sick and losing everything after losing their job.

If you have a health condition then you can be trapped, because a new insurer won’t cover existing conditions.

This has not been true since Jan 1, 2014:

https://www.hhs.gov/healthcare/about-the-aca/pre-existing-co...

Before 2014 plans were required to cover pre-existing conditions as long as you had “prior credible coverage” and didn’t have a lapse in coverage for more than a short period of time.

If you let coverage lapse, plans were allowed to impose a waiting period before coverage for the existing condition would start.

Since 2014, the “fix” is that now it’s just required to always have insurance, or else you pay a penalty.

Then for the last couple years the penalty was repealed but the coverage for pre-existing conditions is still guaranteed, which does open up a hazard that people will only buy insurance after they get sick... but really the risk of a sudden health issue is still high enough that most healthy people will still want coverage.

No. They offer what they offer. Even when plans seem similar, are you willing to pay out of pocket for a $4k/month medicine that you've been taking for years and only paying $250/month now for, all because the new insurance doesn't cover it?

This is even more pronounced with lower-wage employees. I didn't switch jobs for years because of benefits: At best, I'd have to pay for COBRA for 60-90 days, which would basically take all of my money and then some. But mine was also fairly cheap and I had good coverage, something that similar jobs usually didn't match.

Deductibles and max out of pockets have to be met again.

I do not leave my current employer specifically because of health insurance. No other employer in the area provides comparable coverage. It would take about a $30,000.00 per year premium to get me to even consider leaving. Healthcare is my number one consideration on all employment decisions.

Exactly. I don't understand why people don't understand this.

It's a huge chilling effect on employee turnover. Until ACA pre-existing conditions was a huge aspect of that. Even now IIRC when I changed jobs once I recall any existing conditions would not be covered for 1 month.

And it's the biggest cost increase over the past 2 decades and has soaked up almost all the profits that could have gone to employee salaries.

https://www.pewresearch.org/fact-tank/2018/08/07/for-most-us...

https://www.healthsystemtracker.org/chart-collection/u-s-spe...

If a company has to trap employee with health insurance to keep them from leaving, that suggests they aren't treating their employees very well.

> It means if you don't like your insurance company, your only option is to change jobs.

Well, a bit less effective, but sometimes works, you can also complain to HR about the insurance.

Let's say HR really does care about employees interests. It could be that they chose an insurance program that is best for 90% of employees, but is a terrible choice for you. HR is unlikely to change anything because of a few outliers.

Think about the state of the software rolled out for HR. i.e. speed, UX, cross platform support.

I think from that alone you can safely conclude that HR departments don’t or can’t deliver things that employees need.

Employees are not the customers of HR departments and they won’t or can’t fix your health insurance.

No, it works exactly as it was designed. Health insurance keep s costing more, cover less and not care about helping people in the time of need. That is not an accident. It is a result of concentrated effort of lawyers, lobbyists, salesmen, etc... - a whole system that maximizes profits and market share at all costs, and not the quality, breadth and affordability of healthcare. It is like that by design. So the results are logical - we pay more and get less. And will continue paying more and getting even less. There will be a point in future when this approach will "meet its maker", the hope is that will happen sooner rather than later.

It's an efficient market. It's efficient at collecting money from customers who little or no choice, and at not providing those customers with a service - because providing a service costs money, which takes a cut out of profits.

This is what markets do. They amplify political and financial inequality.

Anyone who thinks that competition will somehow magically fix this isn't paying attention to how markets actually work.

> Anyone who thinks that competition will somehow magically fix this isn't paying attention to how markets actually work.

If you allowed foreign doctors to come and practice in USA the problem would get fixed extremely quickly. Competition is the solution. The problem isn't the free market here, but that the incumbents gets to control legalization and hence stifle competition. I'm not sure why private money has so much more influence in USA than other western countries, but it is the main source of this problem.

Aren't drugs very expensive in the US, too?

Isn't it illegal to move drugs across the border? Importing other goods seems much simpler. I mean, according to this you can only import drugs into USA if you are the manufacturer, meaning USA doesn't permit global market forces.

https://www.kff.org/medicare/issue-brief/10-faqs-on-prescrip...

drugs are very expensive everywhere it's possible, and implicitly expensive drugs are not available where they're unaffordable (and hence no market at the high price). This leads to bigger group buying programs and a focus on generics, but has the unfortunate effect of shifting the focus of drug companies to very high price, small-market specialty drugs and lifestyle & vanity drugs that a broad, public healthcare system would never cover.

Say you have a drug that you need to charge $100 to make it worth your time. Other countries say they will only pay $20 for it. Since the US doesn't have price controls, they will charge $180 here to make up for missing revenue in other countries. So in effect, the US subsidizes countries with universal healthcare.

we can both complain about the final outcome and disagree on how we got here. I think it's a stretch to call healthcare an efficient market. There are huge upfront and switching costs for almost every component making it rife with opportunities (intentional) and mistakes (mistakes) that erode efficiency. I also feel you conflate what markets can do with what their intent is. You seem to imply that markets have no role in a huge swath of our economy and lives, yet I look at my medical experiences in Canada (almost 100% public) and wonder if many people actually know how it works and what the outcomes look like. In a nutshell it's both harder to die and harder to get better under our system, and I think markets could help with the later without hurting the former.

You are conflating markets with meta-markets. The market for healthcare has been corrupted by activities outside of the market.

The market has been intentionally manipulated to set up little choice for individuals and even worse, little transparency on cost and benefits.

Markets DO work, but you have to set them up to succeed. Customers need to be able to choose between providers, customers need to know what the full cost of healthcare is prior to committing, and customers need to be able to walk away or find an alternative if a price is unattractive.

So markets work in theory, kind of like communism.

ha ha that's exactly how i play it to my friends.

Employer driven health insurance was pushed for by unions back in the 70s IIRC. That is how we ended up with this setup becoming normal.

It was older of a trend than that I believe back to post-WW2 when private sector was hobbled. To keep people incentivized to stay longer with employers they offered more benefits that were employer tied such as pensions and health insurance programs not available to job hoppers or self employed.

But more complex is that when people argued for a nationalized health plan a lot of people agreed with it until opponents argued that white people would be paying for minorities’ health insurance with their tax increases. These days it’s difficult to outwardly tell whom opposes public welfare policies requiring some solidarity based upon fiscal principles or social ones first.

Right, the initial were benefits offered by employers to sweeten their compensation and improve retention. Later unions demanded these everywhere and that’s what led to employer sponsored health insurance being normalized.

Separating the consumer of a insurance (the employee) from the decision of which insurance to use (the employer) is where this all went sideways.

Otherwise, in a competitive market, people would be free to jump to any provider with a better offer, forcing other providers to respond and preventing the disaster that we have now.

But now it’s a national mess to unravel and we have union demands to thank for it.

Yep, the more producers and consumers of products and services are separated the more markets are improperly incentivized even without any government involved. B2B has a place in commerce obviously but much of the problems of enterprise software is because it’s designed for a lengthy sales process to meet decision-makers’ needs rather than for those that work under the decision-makers.

Yes, the unions are 100% to blame for the current state of affairs.

Providers, trial lawyers, drug/device companies, and insurance companies are absolved of blame!

I used to tell people that when the subject of "why is healthcare so expensive" comes up, these four pigs feasting at the trough point to whomever is to their right.

Now they have someone to point to that's not even eating, and arguably died a long time ago.

The root cause is root cause.

No, it was during he Second World War. There was a labor shortage as many men were drafted or even signed up, but the federal government had instituted wage and price controls. As wages could not be raised, benefits like health care were offered to try to lure workers.

Some big companies, like the car companies, ran (and I believe may still run) their own medical systems. Most of course outsourced.

Nowadays a company would be insane to drop this because it’s a very sticky incentive. We’d probably have more innovative startups if we had ACA which is a reason the big companies lobbied against it and why having a company to simply pay your ACA premium was made more expensive than the company running a health plan the old way.

As is not allowing interstate competition, and not requiring pricing to be published, and not paying rebates for seeking out less expensive treatments.

I'm my own employer, and the exchange choices are shitty beyond belief. I pay $15K/yr for a family of 3 (that's excluding the considerable deductibles), and I'm not even sure to what extent I will be covered if I e.g. break a leg. The premiums go up every year like clockwork, and will likely go _way_ up this year, due to C19.

I'm thinking of just finding a clinic somewhere abroad if shit really hits the fan, and going without insurance in the US at all, covering my yearly physical out of pocket. It boggles the mind that politicians are proposing to sink trillions more into the bottomless money pit that is the US "healthcare" system.

I was paying about $1.5k / mo for a terrible plan for just a family of two in NC under ACA. The public risk pool is completely terrible and large corporate employers’ risk pools are separated from the general public and self employed.

More and more employers are now self insured. Making your employer your negotiate with healthcare providers directly for care. They might also us a TPA (third party administrator).

Thing is, your boss may know way more about your health than you’d expect.

The entire system is broken.

In my experience, when I was unemployed, an ACA plan doesn't cost $4K or even $800. I'm not sure even COBRA was that expensive.

Perhaps your anecdote is from before the ACA, but is it really productive to still be complaining about the way things were? Maybe spend more time making sure we vote for people who will keep it going.

It varies based on pre-existing conditions.

COBRA is just regular health insurance.

I have had an ACA plan during two separate periods of time over the last decade and it was on the order of $400/month, with no consideration of pre-existing conditions. I've also had the opportunity for COBRA, which was too expensive, but still under $800.

Where do you get your "information"?

I think you need to consider your age and zip code as well. I have a family member who is an insurance broker and she had to factor in age and zip code to give me quotes on insurance.

Maybe the original anecdote was about a family plan. I interpreted it as not, but then reconsidered.

Currently, in an urban area of NY state where I am, a basic family plan is ~$1600 and an individual plan is ~$550.

You may say "what about the deductible", but it looks to me like the deductible is effectively only a payment plan. Even if you have a chronic condition, and you know you will go through the deductible for sure, you don't gain anything by paying for a lower deductible. The deductible is nowhere near the difference between $1600 and $4000 anyway.

Yes, with ACA the government basically made it so health insurance premiums are a tax, and young people subsidize old people by capping old people’s premiums as a multiple of young people.

Of course, pricing will vary by zip code because healthcare providers cost different amounts in different places, so a rural area might be more expensive where there are fewer doctors who have more negotiating power versus in urban areas where there are more doctors competing.

Pre existing conditions don’t affect premiums or eligibility for coverage since Jan 1, 2014:

https://www.hhs.gov/healthcare/about-the-aca/pre-existing-co...

Depends on the state and plan. For me COBRA was $2000/mo. When employed I paid like $20/mo and my employer paid $1980/mo. When I left I paid the entire amount.

For an individual or family?

Actually in your case it depends on the employer.

The plan you had was $2,000 (wow, that's really a lot though) and your employer was willing to pay $1,980 (again, that's a lot compared to employers I worked for) in addition to your salary.

Has the ACA caused prices to go down? I'm getting mixed messages about who has actually benefited, with "only insurers and people who were covered by the Medicare expansion actually benefited" being the impression that I get.

Whether prices have gone down may be of importance to society, but on a personal level, being able to pay is more germane. Before the ACA, when I was unemployed and not in school, I just wasn't insured. At this point though, that's kind of a long time ago.

Also, I think you may be confusing Medicare and Medicaid. I've never been covered under either.

Yes, I am mixing them up.

It did (especially for older people), but in the states that were willing to expand medicaid (the red states refused so there's an income gap where you make too much to qualify for subsidy, but too little to afford the regular prices)

It dramatically decreased prices for people with pre existing conditions. Which slightly raised prices for everyone else. Considering that expensive medical conditions are the point of medical insurance this is likely a good thing on average. Aka, cheap insurance that’s not actually covering you is kind of pointless.

All Marketplace plans must cover treatment for pre-existing medical conditions. No insurance plan can reject you, charge you more, or refuse to pay for essential health benefits for any condition you had before your coverage started. Once you're enrolled, the plan can't deny you coverage or raise your rates based only on your health.

COBRA is essentially the employer's plan without employer's subsidy. The employer's plan seems cheaper because of that subsidy.

> The employer's plan seems cheaper because of that subsidy.

And it is cheaper, because that part of it is tax-free.

That's a good point, forgot about that.

I don’t think there is anywhere a single-person ACA plan costs anywhere near $4K. Even a “platinum” family plan in most places is $2K or less (not that that is cheap, but it isn’t $4K either) But these are also the “retail” unsubsidized prices. If you just lost your job and are without income, its extremely likely that you would qualify for a subsidy, making even a $1600 family plan likely much, much cheaper (and much cheaper than keeping your employer’s plan via COBRA as well).

Of course, as evidenced by people on this discussion thread, a lot of people are not aware of how ACA plans and subsidies work. Anyone who would even consider sticking with a COBRA plan after losing a job probably doesn’t realize they would come out much better with an ACA plan. When filling out the form you have to estimate what you’re whole year income will be... assume that you’ll be unemployed for the rest of the year when entering your yearly income. Even if you do end up getting a job in a month or two, you’ll just have to pay back some of that subsidy at tax time (the following April), but in the mean time you had cheap health insurance when you really needed it (while unemployed).

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