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Comment by rayiner | Hacker News Reader

> Someone with insurance that they've been paying for has no reason to put the brakes on

Especially when the insurance company itself can just pass the costs along in the form of higher premiums because people are legally required to buy insurance.

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The 2017 TCJA repealed all federal penalties for not having health insurance, making the individual mandate to have health insurance moot since 2019.

https://www.commonwealthfund.org/publications/fund-reports/2...

These people still get indirectly subsidized when they receive healthcare they can’t pay for and providers have to collectively eat the cost. Removing the penalty simply enables inefficient freeloading on the system (as these folks are likely to be stuck with medical debt or have to declare bankruptcy from medical bills they will never be able to repay).

I don’t understand the idea of freeloading here. Insurance companies charge rates the market will bear. They are still going to charge these rates if insurance payouts to the freeloaders go away. This is not a perfect market where competitors will spring up overnight to provide insurance at lower rates if the cost of doing so goes down.

Health insurance rates are highly regulated. Everyone pays higher rates due to people who don’t pay, because providers build their uninsured costs into what they charge insurance payers. They’d go insolvent otherwise.

https://www.healthcare.gov/how-plans-set-your-premiums

https://www.healthcare.gov/health-care-law-protections/rate-...

Additionally, "legally required" was a dubious way to describe the state of affairs even before then: you could continue to live freely your entire life without ever enrolling in an health insurance plan either by demonstrating participation in some other communitarian health share program or by paying a tax.

Protections of the ACA include the requirement to submit premium increases for state and federal review, and limits on how much of premiums can be used for anything other than medical costs. This means that they cannot legally "just" pass costs along, and that even when they can those costs are effectively a representation of the limited power anybody has to negotiate with healthcare providers, which is hardly something one can pin on insurance companies.

And of course on top of that, it's inaccurate to say that people are legally required to buy insurance. It's wholly without basis for the last 3 years or so, and even before 3 years ago it's a dubious representation of the options available to people.

I think it's the exact opposite actually. Insurance is incentivized to go along with Healthcare cost increases because it lets them increase their premium and profit. If you have a 10% profit margin and need approval to raise cost, higher healthcare costs overall is the best way to increase your net revenue while keeping the same profit percent.

It is the classic problem of Cost Plus contracts

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