Health Insurance Costs for Businesses to Rise by Most in 15 Years
wsj.com
wsj.com
https://www.kff.org/affordable-care-act/employer-responsibil...
The ACA exchanges are possibly doomed long term. People on that skew mid to lower income (but higher than medicaid), and many won't be able to afford the higher premiums - so they will drop off. So then there is the death spiral situation.
You will be taking a shadow pay cut instead. Or soooo much worse, they will cut your healthcare benefits, and instead pay you the balance of your portion of the premium, which isn't even close to what health benefits cost, and they will angrily expect you to thank them for the privilege.
I would also accept Medicare For All if we're shooting big here :)
On it's face it might seem like this isn't related to your complaint, but one of the consequences of self-insurance is that the employer essentially has a dial that they can turn that influences what level of service you get from the provider. If the pool is okay, then your employer might spring for additional benefits like free telehealth. If the pool is marginal, they might force you into a pharmacy plan. And if the pool is completely hosed, then the provider can get aggressive about requiring documentation to bring pool spend back in line.
You are right, the insurers in a sense don't care about specifics - you can say "everyone gets 52 massage visits a year covered 100%" and they'll do that for you.
But when you talk about TPAs, realize too that those self-funded employers obviously haven't done the actuarial work, so they'll by and large follow an insurer plan because that's had a lot of effort put into balance, optimization and such. Otherwise it's like "I don't know, how much -should- we pay for X?"
Of course if we take a step back it's crazy that the current system of tax incentives and penalties essentially forces most large employers to do some level of healthcare actuarial work. There's a whole niche industry of consultants who assist self-funded employers with this. But we'd all be better off if access to affordable health coverage wasn't tied to employment.
Pointless blaming employers or governments - their pockets aren't unlimited.
The problem is the greedy insured.
The insured only want the best when it comes to medicine and procedures.
Infinite want for important needs is hard to deal with (our economics cannot match our morals). Part of the reason for our roundabout ways of managing healthcare is so that budgets exist at all (nobody wants their healthcare options restricted). For public healthcare in New Zealand waiting lists are used to ration procedures, and expensive drugs don't get funded.
But we spend far more, multiple times more for exactly the same medical goods andservices available in other countries, for that fraction of the price.
It'd be a great start if there was equality, before we start talking about "greedy insured".
Not only does what you describe introduce additional middle-man costs that aren't being spent on actual care, but it also obscures the overall health of the public, by creating a number of private health pools that are administered separately.
If we had a single payer system, we'd have much better data on spend vs outcomes and would be able to direct the flow of care much better.
Isn't that just great?
I too would love to disconnect healthcare from employment, but good god is this the wrong way to do it. But the current administration has shown for over 20 years that it is utterly incapable of building a solution, so they will just keep tearing down what little of this system is effective while pocketing billions.
Health insurance is part of the total compensation so it's employees who have absorbed the cost by lower salary and higher deductibles, co-pays and whatever other ways insurers find to reduce their own cost.
The market simply cannot correct for this. It's just not possible. As fewer people can afford care, prices will go up to offset lost profit. The only organic correction that can happen is if so many people die that the entire economy collapses.
So yes, we'll see a decrease in hiring, a decrease in the number of insured and/or healthy workers, and absolutely nothing will change. The public simply cannot squeeze insurance into lowering prices, nor can businesses. Only legislation can fix this problem.
But since that seems to be ever more unlikely, the best solution is probably for the people to storm the insurance companies and put the CEOs on pikes for all of the death and destruction they've inflicted on our entire society. Democracy has utterly failed us and the only reasonable option left is incredible violence. That's the sad, sorry state that american society is left in today.
And it's horrifying that you would advocate for violence on this issue so I flagged your comment.
The profit motive and health care outcomes are fundamentally at odds.
Likewise, employers won't have to carry this burden. Companies that hire employees across multiple states have to navigate a patchwork of state/region based health insurance policies. Whenever there is a wrinkle in health insurance paperwork, an HR person has to to hunt down the issue and coordinate between an employee and the health insurance.
My gosh. I switched employers within a month of having a major medical event, and it was just the worst. The hospital was claiming I didn't have insurance, but I did (through COBRA, which is a whole other shit show that should and would go away), so I had to have multiple phone calls with the HR dept of the employer that I had just left. It's pretty awkward!
How often do we get to say that the government option reduces bureacracy.
That's not to mention the increasing potential for innovation! I know personally I left a fulfilling but somewhat unstable freelance lifestyle to get a job that offers health insurance after I had kids. I would like to pursue something else independently, and I can tolerate the financial risks, but I simply cannot tolerate the high costs of health insurance for myself and the rest of my family (or worse, the risks that come with having no insurance at all). If my family had health insurance, I'd leave my day job and chase other more exciting, fulfilling prospects. If that was a successful venture, maybe I could afford to hire a few employees because I wouldn't have to cover their health insurance.
Medicare For All should be a slam dunk. The only thing standing in the way is the health insurance industry, which is rolling in money. Get rid of them.
The whole system is broken. It's overdue to launch our own publicly owned instance of what they built in Taiwan to sidestep political gridlock:
https://www.theguardian.com/world/article/2024/aug/17/audrey...
This public-private healthcare system as it currently exists in America combines glacially-slow subpar public services with the rent-seeking behavior of private insurance.
More than any other group, it screws small business owners, i.e. the people the politicians usually claim to run for office on behalf of.
People in this thread ask why don’t businesses lobby for public health. Wrong: why doesn’t Apple lobby for public health? Follow the money. It’s so naive to think it’s solely about providers. Who anyways, when there is fraud, they are defrauding CMS, not UNH.
There is plenty of waste, fraud, and abuse committed by providers against all payers including Medicare, Medicaid, and commercial health plans. Most providers are honest and follow the rules in good faith but there are a few bad apples who attempt to exploit all payers.
Ha ha, “merely act as third-party administrators.” Dude, does United Health or Apple deny your claims?
Anyway, it’s a simple question. Why doesn’t Apple lobby for public health?
The largest employers do have a financial incentive to maintain the current broken system. Despite the hassles, their economies of scale in running self-funded employee health plans give them a cost advantage over smaller competitors. I suspect that's part of the reason why they don't lobby for reforms but I'm not privy to internal Apple decisions.
The reality though is that the employer generally doesn't want to pay 100% of all claims, all the time.
So they're left with "well, what do we pay, how much, and how can we use the insurer's negotiated pricing, etc., etc." and they ask UHC to provide plans that largely match UHC's plans, rules and the like, potentially with one or two little carve outs or exceptions, because UHC is the one that has done the math to make sure that balances cost/benefit for Apple. So a lot of time, they just "pass through" plans.
Which is why most self-funded plans look "suspiciously similar" to what you might find elsewhere in the market.
I wrote software for a healthcare claims benefit management company that drove insurance for direct insureres and TPAs for 12 years.
Why does it have to be so complicated? The government HAS to pay for treatments that are FDA approved. UNH and Apple, working together, do not. Furthermore, Apple doesn’t have to cover everyone, the government would! It’s that simple!
For people reading this thread: Apple gets paid a rebate at the end of the year by United. The employee whose paycheck has a cut out for “health plan” does not. It’s that simple. Apple gets to pay the employees less when it chooses United. Apple has not lost many antitrust cases, but it has lost them for paying employees less! This is their MO! Your cheaper ACA plans do not pay rebates for unused services. The government, which pays for the health costs of the people whose claims are denied, does not pay you a rebate. Your auto insurance sometimes “pays” you a “rebate,” if for some idiosyncratic reason Gavin Newsom decides that’s how it should work. So generally, Apple is not lobbying for public health because the status quo lets them save a TON of money by overcharging their own employees for “health plans.”
I don’t think you should throw around “total misunderstanding” like that either. You don’t know me, or know how much I know about this stuff. Not every generalization is Wrong. It can be wrong, but not Wrong. And anyway, you have a problem with my generalizations, and then you say “total misunderstanding,” which is itself a generalization. It’s bad faith. I am choosing rhetorically to generalize, in a way that aligns very well with the truth, and you are choosing meaningless specificity that may be ever so slightly more truthful, but doesn’t align with the emotions - the anger against giant corporations, the government, etc. - at all. We’re both being intellectually honest, but only one of us is co-opted. That is my feedback to you.
There is no credible allegation here that Apple has dodged US federal or state tax laws.
Government sponsored health plans such as Medicare aren't legally required to pay for all FDA approved treatments (and much of what they do pay for are procedures which aren't subject to FDA approval at all). Commercial health plans offered by UHC and their competitors cover everything that is medically necessary (and they often cover more than Medicare does), but as with everything in healthcare the precise definition of that term gets a bit fuzzy in some edge cases.
- why does Apple prefer the status quo? How do they “make more money”? Why do they use UNH? They make software, if it’s so simple as you say, administer plans, why don’t they do it themselves? Btw, Apple Health as in Health IT does exist! So does Google’s Health (IT)?
- how can health IT be the second worst performing VC sector (only Ed tech is worse), but UNH is worth whatever it is, hundreds of billions? What is UNH’s actual product? It’s not “being a middleman” - that’s health IT…
- why do doctors think Kaiser sucks? Like how does Kaiser make money?
- do we have “death panels” in this country? What do they look like?
These are all related.
In general, I don’t think health IT has the answers to rising costs. That’s the POV I’m hearing. It’s likely that greater adoption of health IT has accelerated, not slowed, the growth of costs in a way that has not improved outcomes per dollar. That’s an orthodox opinion.
In my experience, the intellectual leap for a lot of engineers working in enterprise sales heavy sectors is two realizations: (1) that just because something happens, doesn’t mean it makes sense (2) and just because you give people what they ask for, such as in the context of health IT fulfilling dull consulting services asks, doesn’t mean that what people are asking for makes sense or is a net positive, maybe by any metric.
And anyway, most experts agree that the middlemen in the healthcare sector, like pharmacy benefit managers and insurers, are responsible for a significant part of the cost difference per outcome here compared to Europe. To me, it is unsurprising that middlemen in general cause costs to rise for very little actual gains, even if in their POV, they are fulfilling some requirement by regulations or whatever. You know, they’re stuck in the “I did what someone asked and paid for, and therefore it makes sense” mindset.
The loss ratio seems to be a good incentive for insurance to pay more to hospitals in order toincrease their own cut of the premiums they are taking in.
https://www.msn.com/en-us/money/insurance/health-insurance-c...
Text-only, no Javascript:
https://assets.msn.com/content/view/v2/Detail/en-in/AA1Mg1Fv...
Of course, since many companies prefer less regulation, the last thing they'd want to do is hand over the keys to what they do for the healthcare for their employees over to the government. With things how they are now, they can always cut or pair back their plans if they want to cut costs. That lever would be gone with single payer.
Like many things, the system is set up to benefit those in charge rather than those who it's meant to serve. You can look just about anywhere outside the US and see that universal healthcare is a much better system, but better for who? Not much of a benefit for those who make the decisions, so we keep the flawed system we have.
Do they really? I've see only select hedge funds actually advertise their health plans. Even that is usually that "we pay 100% of premiums." Most plans are impossible to assess until you actually get to the job and see the tiers available and support available. The devil is in the details -- network coverage for your specific state, co-insurance, co-pays, deductibles, % premium paid, support like QoS/tier.
If you're a tradesperson, just having insurance coverage is a big thing. It doesn't matter if it's not great, it's better than nothing. Leaving a job with insurance for one without insurance is likely going to cost you thousands of dollars out of pocket for the same coverage.
At the top end, companies will have plans that cover so many things at very high percentages, meaning that your out of pocket for health insurance will be surprisingly small. Less competitive companies simply can't offer that.
It's only in the middle where the details of a plan matter, and those are going to be the hardest details to find.
I think this is a trend a lot of people need to keep an eye on. Heuristics are changing as the system grows more complex.
Even today, most people will pay several hundred dollars a month for insurance; the employer will pay several hundred dollars and the plan will still have a $2K or so deductible. That's a lot of money that most people make no use of at all.
If you accept higher wages to pay it for yourself, it's a bad deal, either to the employer or to you or possibly to both.
Not necessarily: I gain the ability to switch insurances (imagine, for example, a "free market" where insurance has to compete…), job losses or changes don't affect my insurance, etc. Actual competitive pressure and lower switching costs should, in theory, drive the price down.
Also, IIRC, insurance premiums paid with post-tax dollars are deductible, so they're not really post-tax. However, that deduction is part of the itemized deduction — while currently most people are not itemizing (as they do not have enough itemized deductions to hit the "it is worth it" threshold), my napkin math says that throwing HC premiums in there — since HC is so damn expensive — tips the scale / breaks the threshold for basically any normal income level.
But this is also an "imagine if" thread. Imagine if we made healthcare premiums outright deductible to alleviate the problem you've identified?
I honestly didn't even realize the thing about the standard deductible until I had already done it. I was shocked to find I couldn't deduct it because I'd have to use the itemized deduction which would have been lower. I just assumed my insurance could have been deducted like it was when I bought it through my employer... how wrong I was.
But yes I would absolutely prefer the "imagine if" scenario.
But you're right, this taxation intertwine is another tangle that shouldn't exist. Too much energy is spent by everyone trying to optimize take home pay, coverage etc.; and lower wage workers who just don't have the mental cycles to do any thinking get shafted.
"This is a better paradigm because the government has decided to subsidize it" isn't a particularly compelling argument.
Also, original Medicare Part A/B doesn't cover certain types of healthcare at all such as prescription drugs. So not everyone on Medicare "gets" healthcare today. That's why many Medicare beneficiaries choose to pay out of pocket for Drug Coverage (Part D), Medicare Advantage, and/or Medicare Supplement (Medigap) insurance.
80 years ago, in the context of the war economy of WW2
How is that relevant? Democrats have been pushing for Medicare for all or some other fully socialized system since the Kennedys, while republicans have shown zero ability to do anything but ban you from buying cheaper drugs
Pretending this is "gubermint bad" is just ignorant. It also just, wasn't the government's explicit doing. The government froze wages during a literally existential war. Look at Russia right now for why that's generally a good idea. Companies responded by offering non-wage payments of various sorts.
The US built a significant fraction of ALL war material for the allies in WW2. They did this through significant amounts of command economy. Building a Liberty transport ship every other day was done by centralized planning, NOT the free market. See the US's current difficulties buying 155mm howitzer rounds for examples of how the "free market" is worthless at dealing with real wartime production concerns. We didn't build 50k tanks by waiting for the free market to collect a payday. We didn't build more aircraft carriers than the rest of the world combined by relying on the free market.
So why haven't republicans fixed this in the near 70 years of political dominance they've had in the US? Democrats have consistently pushed for solving this shitty situation for decades, but have never gotten the votes needed to even get into government.
The philosophy behind a business caring for employees and implementations of slavery are two fundamentally different topics, only confused when buying into US propaganda.
I gotta wonder how much hassle this is if it doesn't cause them to advocate for alternatives. Rather lobbying efforts and such seem to focus on other things.
How much hassle this is to them seems up in the air to me.
And no, we don't have the wait times Americans are afraid of. I can visit a doctor the same day and get treatment. My friends back in the US are desperately trying to find appointments with everything filled months down the line. America has the worst of all systems combined.
Americans (I'm an American) sometimes have a preconceived notion that, if something is really expensive, it must be good. No... no that's not necessarily the case.
The insurance companies would love for you to believe that, but in actuality, we're just getting fucked. It's just a worse system overall, in pretty much every metric you could possibly choose.
It's been done to death. Literally.
Edit: People seem to think I'm proposing businesses keep operating how they are. I'm suggesting businesses that truly care need people running them who know how to care, not the normalized psychopathy that's become corporate culture. I'm not suggesting current or past harmful relationships with businesses continue or that even those businesses should continue.
Another way to say it, there is more to health than how an employer affects a person's life, and those things are none of the business' business.
It means to actually care about the quality of food the employees have access to and the quality of culture surrounding them. It means caring about the environments people live in. It means recognizing people LEARN to make harming choices through harm (individual, familial, social, collective, cultural, systemic...etc) so recognizing repair is needed & pursuing that. This is what lobbying would be about without dehumanization.
Don't get lost in the fascist fantasies of what it means to care.
In all seriousness, if a private business with all the incentive in the world can't figure out how to lower healthcare costs, I don't see how punting to the government would somehow be better.
Everyone that proposes a single payer can't explain who makes less money. Will we save money by the doctors getting paid less? The drug companies? Where do these savings come from?
Even if you're able to do everything the health insurance company does and capture 100% of their margin with equal efficiency, you'll capture a profit margin of around 2-6%.
The only argument I hear is "other countries do it", which is just unpersuasive. It's not a serious argument. Propose something better
Move to single payer, kill the medical insurance industry, and save these costs:
The health insurance industry employs approximately 605,000-912,000 people directly. The top 10 companies generate over $1.5 trillion in combined revenue annually. Conservative estimates suggest these companies spend $45-90 billion annually on employee salaries.
US has medicare and medicaid. It actually spends more than most other countries. I guess they need to spend more to save money?
Again throwing around stats about health insurance industry is not an argument. That money gets spent on something unless you think there is some grand cabal of health insurance companies to do make-work and hire people and set money on fire for no reason. Why doesn't some greedy capitalist start a health insurance company, set slightly less money on fire and provide great healthcare?
https://www.visualcapitalist.com/u-s-spends-public-money-hea...
The reason you have health insurance, and you don't just pay for healthcare, is because pooling together a lot of people and paying for all of them is cheaper than paying for each individually.
You've probably noticed that, the bigger the company, the better the health insurance plans. Why is that? Their risk pool is bigger.
Follow the logic. What's the biggest risk pool you can use? The entire US population. What would then provide the lowest per-capita cost? Spreading the cost across the entire US population. It's economies of scale.
Bonus: we can also eliminate much of the administrative aspect of healthcare because we are no longer coordinating thousands of separate insurance entities. You mentioned make-work - yes, we have that. Why does a hospital need 500 billing specialists? You tell me.
Some great quotes from your own link about US healthcare:
> The underlying challenges in fixing U.S. healthcare may be multi-faceted and complex, but the overall diagnosis is clear: costs are out of control.
> In other words, costs seem to be out of whack across the board in the United States, regardless of whether it is private or public care being discussed.
> Spending keeps rising, but the effect of that spending seems to have decreasing marginal returns on life expectancy – a metric that is an important indicator for the overall effectiveness of any health system.
> It’s clear that Americans aren’t getting bang for their buck when it comes to medical treatment – so how is it to be fixed?
Your own link comprehensively and thoroughly disputes your original assertion:
> If you think health insurance is expensive now, wait until it's free!
> The only argument I hear is "other countries do it", which is just unpersuasive. It's not a serious argument. Propose something better
Given that all those countries pay less for the healthcare they provide AND have better morbidity and life expectancy outcomes, I dunno, that sounds "better" to me, but apparently you have a different definition?
What if their incentives aren't to lower cost? Insurance companies make more when the obfusicate pricing and payout less. That's the opposite of incentive, it's a way to cover up your profits.
> Everyone that proposes a single payer can't explain who makes less money.
If you think the healthcare industry is just doctor-insurance-you, then you're nuts. Look up pharmacy benefit managers. They're basically third parties that are in place to jack up prices.
> Even if you're able to do everything the health insurance company does and capture 100% of their margin with equal efficiency, you'll capture a profit margin of around 2-6%.
Insurance companies have had their profits capped via the ACA for more than a decade now. Where they're making their money is by using more third parties in the middle to jack up pricing and increase costs so that A) their 2-6% is bigger, and B) their "investments" in the third parties are not regulated by the ACA so they can get their massive profits their.
> The only argument I hear is "other countries do it", which is just unpersuasive. It's not a serious argument. Propose something better
Its a very serious argument, you're just happy to dismiss it for some reason. If the entire developed world uses a different system than us, gets better results and for less money, then you'd have to be insane to insist that mimic those systems is not a serious alternative.
The health insurance company's bottom line profits are determined entirely by the volume of cash that they funnel to healthcare. Their profit margins are capped by law to X% of this volume. So the only way they grow year over year is to increase the amount of cash they hoover up and direct to healthcare providers. Because the stock market demands year over year growth, they are incentivized naturally and by fiat to increase the volume of cash that flows through their network. This volume of cash is directly spent on healthcare. So you can see pretty easily that the incentive structures in our society are geared toward raising costs steadily.
If you couple that with private equity buying up healthcare providers and globbing them together, then you can see that there's a whole market system being built to make healthcare more expensive so that health insurance providers can absorb more costs and therefore increase their year over year profits. PE companies increase the negotiating power with insurance companies, and costs increase. And when costs increase, the insurance company's profit increases proportionally year over year.
So what you're saying about private companies doesn't make any sense. There doesn't even have to be collusion, although United Healthcare, an insurance provider, owns Optum, a healthcare provider, and I suspect there is a lot of collusion in relationships like that. The incentives are perfectly aligned to create this situation.
What's unserious about this?
Of course they can. But why on earth would they? Health insurers are mandated by law to not exceed certain profit margins, so the only/best way to make more money is not by increasing volume and lowering margin, it's by increasing costs for your target captive market. That flows down the chain, you increase the allowed costs, so providers increase to meet that (why wouldn't they?) and the only person left hurting is the policy holder (and their employer, paying some portion of it).
> unpersuasive. It's not a serious argument
Your argument amounts to "this doesn't make sense, why wouldn't companies look to lower costs" when lowering costs in the health insurance mathematically equals lowering your profits.
What's not a serious argument is this constant belief that America is unique. "We're bigger than other countries", "our population density is different", all these things.
But you're going to need to do better than a pithy "it's not a serious argument" with no substance behind it when acknowledging that the entirety of the developed world hasn't "solved" healthcare but does a better job at making it equitable and accesible to more, at a lower cost, with oftentimes better outcomes (looked at our mortality rates around childbirth, lately?). It's not about the quality of care, it's about a system that revolves around making more money, not patient care. Another simple example, my insurer, Aetna, simply refuses to authorize 90-day (or rather, anything beyond 30-day) prescriptions from any pharmacy except the pharmacy they wholly own. Why? That doesn't provide patient benefit. There's no discount - the charged amount for the 90-day script is 3x the cost of the 30-day. It provides a worse experience for the patient, removing flexibility for them. It doesn't change their pharmacy network - they're still serving pharmacies all over, just for a subset of patient needs.
No, it's just about money. Again, there's near no incentive in the current US healthcare market to compete on price. And that's why US healthcare is ~20% of GDP, double, if not triple the cost of other developed nations.
One of the few things I'm happy about republicans being in power for is the current grey market situation with GLP-1s. I have a feeling that a democratic FDA would try to come down hard on the current situation. Rich people and girls who are pissed at their body know how easy it is to get these drugs with no oversight. Thank god for it and may it never get harder to access these substances.