I, Health Insurer | Hacker News Reader

I, Health Insurer

charlespetzold.com

87 pointscgopalan106 comments

It's important to note that New York is one of the states from which ACA looks better than most:

New York's announcement this week that insurance premiums would drop 50% next year for individuals buying their own coverage in new online marketplaces made good talking points for proponents of the Affordable Care Act, but consumers in most states are unlikely to see similar savings.

That's because only a handful have New York's rules, which — like the federal law — bar insurers from rejecting people with health problems. Unlike the federal law, however, New York does not require consumers to purchase coverage, so over time, mainly older, sicker people, have purchased coverage. That drove up prices and discouraged younger, healthier people from buying policies, as did a requirement that insurers charge the same rates regardless of age or health status.

As a result, premium prices listed for individuals often top $1,000 a month for some New Yorkers buying their own coverage, making the state's rates among most expensive in the nation.

http://www.usatoday.com/story/news/politics/2013/07/20/kaise...

And the old New York model of a lousy risk pool with unaffordable premiums is where ACA is potentially headed if the individual mandate "tax" isn't given much teeth.

I've followed NY insurance premiums in the individual and small business market carefully for the last several years, and it is very hard for me to see how anyone came up with the 50% drop statistic. The linked article doesn't really help unfortunately.

The only thing I can think of is that they are comparing apples to oranges. The standardized plans available in the exchange are somewhat different from almost all plans that were available last year in the private market. In particular, and surprising to many not paying close attention, none of the exchange plans downstate have any out-of-network coverage at all. Not even the usual and customary rate reimbursement. So while it's true that you could easily have paid $1000/month or more for an individual health care plan last year (and remember NY has even stricter community ratings than ACA, everyone pays the same) it isn't true that the same plan is $500/month on the exchange.

I'm not an expert, but I hear that ACA platinum plans cover 90% of costs, which is a lower coverage level than some pre-ACA plans.

Well, the ACA stipulates 60/70/80/90% for bronze/silver/gold platinum plans. 90% is pretty high but I'm sure there are "some pre-ACA plans" that pay more.

In general, it's preferable for the consumer to "have some skin the game" so that they might negotiate or increase discretion.

The difference between fixed-size copays and 10% of expenses for the top 0.5% of costliest patients is probably a huge number, so the premiums for those patients would logically decrease though their aggregate out-of-pocket expenses would go up. The point is that it will be a future cost for some people who are currently happy about their lowered premiums.

But I actually agree that consumers should have more skin in the game. My issue is that the statement, "My premiums are lowered!" does not imply that, "The ACA saved me money!" It's more complex than that, and it's plausible that many of the people with lowered premiums are getting a worse deal here.

The relative toothlessness of the individual mandate was one of the reasons it was upheld by the Supreme Court (it's a tax, not a penalty).

> It's important to note that [NY already forced insurance companies to cover sick people, so the provision in the ACA that forces everyone else to do the same didn't hit them as hard.]

Is insurance that vanishes when a patient becomes unprofitable really insurance? Social issues aside, it looks like the health care market used to have a defect permitting the sale of fraudulent plans. Now that the defect has been closed, only real plans remain. It should be both unsurprising and acceptable that the new plans are more expensive (acceptable in the "this is an improvement" sense, not the "we can't do better" sense).

> > It's important to note that [NY already forced insurance companies to cover sick people, so the provision in the ACA that forces everyone else to do the same didn't hit them as hard.]

> Is insurance that vanishes when a patient becomes unprofitable really insurance?

It didn't vanish when the patient became unprofitable; the opportunity to buy it vanished when the patient became sick. That is, if you were covered and became sick, you stayed covered; it was if you were uncovered and became sick that it became almost impossible to buy insurance.

> Social issues aside, it looks like the health care market used to have a defect permitting the sale of fraudulent plans. Now that the defect has been closed, only real plans remain.

No, the plans were not fraudulent, and there was no defect. I don't know why you'd expect to not pay for a service and then receive it.

(There is a side issue, which is that once one became sick, it was common for insurers to try to demonstrate that one had defrauded them, and was therefor ineligible for insurance--but that's a separate issue).

> It didn't vanish when the patient became unprofitable

Yes it did. That was one of the "dirty tricks" pointed out in OP's article. The insurance company would intentionally enter contracts that the customer had already violated (by inevitably messing up somewhere in their paperwork). So long as the customer was profitable, they would take their money, ignoring the paperwork errors. If a customer became non-profitable, they would dig out the errors and kick the customer out of the plan.

And then the opportunity to buy care from anyone else also vanished.

> No, the plans were not fraudulent

Fraud is "A false representation of a matter of fact .. practiced in order to secure unfair or unlawful gain." Companies accepted money to insure a customer while secretly and intentionally retaining the option to drop them even if they stayed within the agreed-upon limits. If that isn't fraud I don't know what is. The act of accepting their money was the false representation of fact. I used a shocking word because the practice itself is shocking.

> There is a side issue...

No, it's the central issue.

Rescission was vanishingly rare. Regardless, it is a side issue, since it's not what the quote from the USA Today article was discussing. New York may have outlawed rescission too, but it was the requirement that "insurance" be available to purchase when you're already sick that made their pre-ACA premiums so high.

Yes, and those vanishingly rare cases were the most expensive ones.

My point was that the latter was partially caused by the former along with every other mechanism of dumping undesirable patients on the open market. I suspect the major one is the exploitation of the fact that most people will underestimate the extent to which high health costs correlate with decreased income and a higher rate of premium lapse. It won't be counted as "rescission" even though the industry benefits from it (and the people hurt because of it) in exactly the same way.

These mechanisms might not constitute the entirety of the central issue, but they certainly account for a healthy chunk of it.

Regarding health care being a failure of the free market, I recommend this (rather long) article for some perspective:

http://www.theatlantic.com/magazine/archive/2009/09/how-amer...

One of the biggest disappointments for me about the ACA was that it didn't address one of the most obvious problems with the American healthcare system -- the significant discount for employer-provided healthcare.

Is employer-provided healthcare discounted, or merely subsidized by the employer (or both)? The plan through my employer seemed inexpensive, but they were paying a significant portion of the premium.

It depends on exactly what you mean by discounted, but in a very real way the answer is both.

First there's the obvious, and quite significant, tax benefits to employer provided healthcare over private purchased healthcare. In the former case, neither the employer nor the employee pay payroll taxes on their contributions and the employee portion is also exempted from income tax (the employer also doesn't pay income tax on its contribution, but it wouldn't for cash salary either).

Second, more subtly, the group market faces much more favorable underwriting than the individual market. Even if non-employer group health insurance were allowed (which it isn't anymore under ACA) such groups are always subject to self-selection bias and thus are unlikely to be underwritten as as favorably. However, this point is somewhat tricky because there are both cross-subsidies and gross economic surpluses, which can be hard to untangle.

It's tax deductible for the company to offer employees health care, but individual plans bought by individuals on the exchanges are not. So it's effectively subsidized in one case but not the other.

The biggest disappointment about the ACA is that the discussion completely ignores the cost of care.

In other words: the healthcare discussion in America revolved around "how can we make it so everyone can afford this $300 asprin?" rather than, "Why are we letting hospitals charge $300 for asprin?"

A very clever smokescreen.

I won't argue with that. Employer-provided healthcare is one of the key obfuscators of the cost of healthcare as far as patients are concerned.

It also has secondary effects in employment markets:

* employers should not be encouraged to replace full-time workers with part-time workers because of health insurance costs

* employees shouldn't be making decisions about careers and jobs based on what health insurance costs will be

* the actual compensation levels between jobs is harder to evaluate since health benefits can be a huge chunk of compensation these days

There's a simple reason they charge whatever they want and generally can't even be bothered to disclose those prices ahead of time: because they can.

To critics of the ACA, the relevant question is, who or what is in an effective position to put downward pricing pressure on hospitals? Because to date, it has clearly not been individuals or insurance companies.

Single-payer systems have a track record for being much better at putting downward pressure on pricing. Not only can they secure drug discounts of ~50% due to their ability to bargain as a bloc against much smaller insurance companies in the US, but they lack perverse incentives to allow costs to rise. Insurance companies don't care about reducing costs, only reducing costs relative to competitors. Since their "cut" is a fraction of overall expenditures, they're quite happy to see costs rise, as long as they rise in tandem for their competitors.

Nobody who is familiar with the market is surprised that single-payer systems are so much cheaper.

Health Care costs by country: http://en.wikipedia.org/wiki/List_of_countries_by_total_heal...

Scholarly Analysis: http://www.pnhp.org/facts/single-payer-resources

[state health insurance]

> they lack perverse incentives to allow costs to rise

But, of course, they also lack incentive to actually provide all that much care, so long as those who are inconvenienced are politically unimportant (e.g. disabled newborns), and they have plenty of incentive to provide more care for the politically connected.

Theoretically, you're right.

In practice, we can just look at existing single payer systems and see how they're doing. Would you rather be a poor parent of a disabled child in the US or the UK?

The person best in the position to apply pricing pressure is the person paying the bills. Since individuals do not pay the bills, of course they haven't been put pricing pressure on hospitals.

The ACA pretty much doubles down on employer-provided health insurance that covers many routine costs, which doesn't address that issue.

Well, if you really wanted to de-couple health insurance from employment, you'd have been better off voting for John McCain, whose health plan transformed the tax-advantaged status of employer health care into an individual tax credit available regardless of how your health care was purchased.

Neither President Obama nor Sen. Baucus (the real author of what became "Obamacare") ever had that in mind: If you weren't going to get single-payer, there was no way you were going to cut government worker and blue collar labor unions away from the very cushy tax-advantaged plans they'd negotiated with their employers for current and retired members. They're already extremely upset about just the "Cadillac" tax.

She single biggest disappointment of the ACA is how few people understand what could be passed in the american system of governance, which combines a huge number of veto points with the republican party that plainly couldn't give a fuck less about people unable to afford healthcare.

Regarding drug prices, there's also Sam Peltzman's book "Regulation of Pharmaceutical Innovation" where he shows with statistics how the 1962 FDA amendments have caused large price increases in drugs while greatly reducing innovation. Such lack of innovation means many cures are never developed, indirectly resulting in harm to patients.

The question is whether this indirect harm is greater or less than the direct benefit of the 1962 mandate that drugs be "effective".

Even after you are fully insured, say with an 80-20 policy, healthcare costs in the US can be high enough to bankrupt someone, as many people in this recent thread reported (http://www.reddit.com/r/pics/comments/1tugnm/i_never_truly_u...)

This scared me like anything when I first saw it. Any steps that the HN crowd can suggest to pre-empt such costs (I know that there might be very little you can do, but figured every little helps.)

There have always been disasters, disease, and death. No financial instrument will 100% protect everyone from those things. Any scheme (market- or bureaucracy-based) that guarantees to cover everybody from healthcare costs is a fool's errand because people will spend themselves poor, lie, cheat, and steal to stay alive.

That being said, the best things to do are the obvious things. Take care of yourself (no smoking habits, no binge drinking). Tell your doctor about your family medical history so you can keep an eye out for hereditary diseases. Live below your means. Have an emergency fund -- a huge one if you're especially concerned.

But besides all that, bankruptcy exists for this sort of situation. Sometimes life sucks and there should be a way to hit a reset button and move on.

>Any scheme (market- or bureaucracy-based) that guarantees to cover everybody from healthcare costs is a fool's errand because people will spend themselves poor, lie, cheat, and steal to stay alive.

I hear talk of far-off countries, where no one goes bankrupt from medical expenses.

Nah, that's just fairytales.

To rephrase, giving everyone a blank check to pay for healthcare will never work.

Many countries that provide universal healthcare either have budget problems or financial situations not true of the U.S. (small size, proportionally large oil reserves). Even then, at the end of the day, someone still says no to some costs.

Sure. Some procedures are uneconomic, and it would be awkward to make them illegal, so there will probably always be private options. But the US approach is just grossly inefficient (I've heard it spends twice as much per capita on healthcare as comparable nations, for indistinguishable outcomes). Driving people into bankruptcy for health problems they have no control over doesn't make anyone more productive. Tying healthcare to employment makes the labour market illiquid and disadvantages everyone. And I shudder to think what life must be like for e.g. someone who wants to leave an abusive marriage but is dependent on their partner for health coverage.

Bankruptcy was specifically created to handle such situations.

Except odds of said ill person recovering financially are still crappy.

Ya, because I should go bankrupt due to a drunk driver slamming into me some random afternoon.

That's extremely rare (in fact, I couldn't find a single instance) and what drivers insurance is intended to alleviate. It would take a lack of insurance by the driver (and you, if you were driving), lack of medical insurance, a particularly expensive-to-treat injury, lack of savings and lack of community support before we get to bankruptcy.

How could you possibly know what the status of any given motor vehicle accident victim's insurance or financial state is at the point of impact? I suppose I can break it down further. What if I were walking across the street and hit by an uninsured motorist (an illegal immigrant, perhaps)? That is a catastrophic injury that could certainly result in a long-term hospital stay with potentially multiple life-saving surgeries required (head, neck, spine), plus physical therapy and likely long-term care needed to manage the aftermath. Tell me again, why is it that the act of crossing the street should ruin me physically and financially?

It (probably) shouldn't. But like I said, it's extremely rare (to the point where I'm not even sure it actually happens). And such an extreme edge case that it shouldn't debilitate the whole rest of the system.

Then disregard that example and simply substitute it for getting sick with cancer or something if it seems too far-fetched to you, it does not seem that way to me.

Regardless, medical bills are the leading cause of bankruptcy in the United States [1]. How can we live in a society where anyone but the wealthiest individuals could be struck down financially at any moment? How much entrepreneurship is completely stifled by the need to stay at a particular job due to proper healthcare coverage? I would venture to guess the answer is quite a lot.

[1] http://www.cnbc.com/id/100840148

In that case, you were just injured terribly in a catastrophe. It seems strange to expect not to experience catastrophic injury in that incident.

That should be mostly fixed now. ACA plans have a reasonable max out-of-pocket and don't have lifetime maximums.

> With healthcare, the free market has clearly failed. The United States now has the highest per capita healthcare costs in the world, but not a commensurate level of health, ...

Because you aren't buying health. You're buying health insurance. It may come with free assumptions, but those are generally worthless, and they are not health either.

If you want a thing, you should buy that thing. Health insurance is not health, and absolutely everyone who buys health insurance gets exactly what they pay for: insurance. Whether that indirectly results in health depends on the individual policy.

> Health insurance is not health, and absolutely everyone who buys health insurance gets exactly what they pay for: insurance.

Part of his point is that people often pay for health "insurance" and don't receive the insurance they thought they were paying for (their "insurance" provider drops them the moment they get sick).

You can blame people for not being able to understand the plans they are buying (dozens of pages of dense, industry-specific terminology) but you might as well blame the sky for being blue.

One of the things the ACA does is make it easy to compare plans so that insurance companies actually have to compete against one another.

> If you want a thing, you should buy that thing.

There are two problems health insurance solves that make direct purchase of health care a complete non-starter.

* 1: Most people have insufficient cappitalization to accept the heavily skewed risk profile.

* 2: If you purchase emergency care at the point of provision, you are either forced to accept the terms "offered" by an effective monopoly (if you are conscious) or you are forced to pay whatever the "care" provider wants after the fact (if you are not conscious).

> You can blame people for not being able to understand the plans they are buying

Hmm, didn't mean to sound like I'm blaming people. I'm mostly just raging impotently at the fact that for most people the only meaningful way to get at health care is through health insurance, whose motivation is to not give it to you, good and hard.

Given the costs and accessibility of modern medicine, I recognize that it would also be difficult for most people to pay directly. I would prefer, though, that we did that through a single payer (government) arrangement, the same way we pay for national defense. (The difference being, of course, that national defense is required by the Constitution, and health is not.)

Give me a break.

Here is a scenario for you. What if you were hit by a drunk driver on your way into work on Friday morning and end up in an extended hospital stay with multiple surgeries? The bill could rack up to several hundred thousand dollars. You get all of your medical bills and you think everything is just fine, your insurance will take care of it. Then, your insurance company sends you a letter that says you missed one of the dozens of questions during the course of filling out your policy and they cancel it on you. Now, you can either pay those bills (haha, unlikely), settle them (killing your credit), or declare bankruptcy (killing your credit). Now, you cannot finance shit. House, car, credit cards. You are essentially fucked, through no fault of your own.

Your argument is unbelievably ignorant.

That's a very detailed hypothetical in which there is clear liability so talking to a hypothetical lawyer would be the best course of action.

The point is that we don't pay for the bandages and bedpans, we pay deductibles and premiums (if that) so of course costs are out of whack.

Ya, because the justice system is so efficient. While I wait two years for a settlement that might or might not cover all of my bills, I can fend off creditors while my FICO score goes down the drain (and that is even if there is somebody to sue).

If you believe that medical bankruptcies are okay, then there is really nowhere for this discussion to go because I happen to think that is total hogwash.

I'm sure that quick judgement against the hypothetical drunk driver will result in you soon receiving the hypothetical hundreds of thousands of dollars he has in his hypothetical savings account.

I'm not a lawyer, and every case is different, but you should be covered by his insurance or your own insurance in that case. If you're driving without uninsured motorist protection, that's an entirely separate issue.

And, again, we're talking about the equivalent of a car warrantee, not collision insurance. There's no argument that universal collisions insurance (and uninsured motorist insurance) is a good idea.

I said talk to your lawyer because if you're not getting paid fast enough, there are creditors and insurance companies that needs to be negotiated with.

In my opinion (and I suspect you simply disagree), a working healthcare system in a thriving society would not have "hundreds of thousands of dollars in debt negotiating with insurance companies and hiring lawyers while recovering from major surgery" as one of its common states. Whatever the answer is, I don't think "talk to a lawyer" is a very satisfying dismissal of the problem.

I was going to write a reasoned rebuttal to this post, but by the time I got to the bottom, it read like so much astroturf.

Please do rebut. Based on the AstroTurf comment, hard to think you will be convincing at all.

A quick example is the obvious contradiction in the following quotes from the blog:

> With healthcare, the free market has clearly failed.

> Does this even qualify as a “free market”? I don’t think so.

Later the post pulls out some talking points about Mitt Romney and some conservative think tanks, which are definitely relevant if you are trying to score political points instead of discussing healthcare policy.

The closing section that glosses over the big problems with centralized planning systems (broken promises with no legal recourse, implementation issues caused by politics interfering with sound decision making) and finishes with enthusiastic exclamation points:

> Now this is what a free market looks like!

> Wow!

> This is a time to be proud.

It seems like political cheerleading to me, but maybe I'm missing something.

To summarize this piece, it seems like this guy felt guilty for working at an insurance company, but now he feels better because the he politically supports the ACA, which he feels is going pretty well. Is there an apolitical thesis for this blog post that I'm missing? Why was it written if not to express a political position?

EDIT: The Romney and think tank thing is clearly an association fallacy. I don't want to get into pointless political bickering, which is why I was hesitant to comment in the first place. I brought up that part of the article because it only serves this sort of tangent instead of furthering the (IMO much more interesting) discussion of healthcare costs, policy, and incentives.

All opinions are political in some sense. However the author is a very well-known writer in the field of computer programming - as opposed to a political figure or someone of an unknown provenance. If you wish to dismiss his writing as fake grass roots rather than genuine, the burden of proof is on you.

Ah. I'm not familiar with the author. It may not be astroturf, but it reads like it. That's a rather unfortunate direction the author took, then.

It finishes in a political argument, far from the interesting personal narrative about working in insurance that it initially seemed to be.

You may enjoy a book he wrote called CODE[0], which is one of my absolute favorites, but I doubt it will convince you to share his political opinions.

0: http://www.amazon.com/Code-Language-Computer-Hardware-Softwa...

It was a breakdown of various ways the incredibly distorted healthcare market fails. The word 'free' is so politically overloaded that using it in multiple ways isn't a contradiction, although you could call it sloppy if you wanted.

The post does make reference to politics, but it also has cogent argument about why market conditions lead to a downward spiral of gametheory when it comes to insurance and something you only have one of, like your body.

So that's the thesis. I think he feels better because, as a free-lancer, he finally has the ability to shop for providers, instead of being locked into one because he's terrified about what 'pre-existing conditions' have come into existence since the last time he shopped.

Yes, because when discussing the history of healthcare in this country, Mitt Romney and conservative think tanks had nothing to do with the direction of policy. You can't rebut anything he's said, but you're obviously upset that he said it anyway.

There are better explanations for why the American healthcare system was the way it was pre-ACA.

This post links a much better examination of the issue: https://news.ycombinator.com/item?id=6992392

If you're going to dismiss most/every healthcare discussion for being political then I don't think we will get very far. The guy was apparently a healthcare actuary which gives him a lot more insight than most of us. And I think it's not too controversial that ACA had a lot in common with the Romney/heritage plans.

I'd be very interested in an article about problems and solutions in American healthcare from an actuarial perspective. I'm siginificantly less interested in reading apologetics about the ACA. The article started out like the former and ended up like the latter.

It's not controversial that there are similarities between the ACA and Romney plans. Bringing it up serves no purpose outside of making political points, which was my point.

I am very interested in discussing healthcare. I just don't think this article advances the discussion. Again, a well-written actuarial perspective would probably be more interesting.

Are you arguing that the inclusion of political opinions negates the value of the author's actuarial discussions? If so, why would that be the case? If the author's statements about actuarial science are incorrect, why not just say so?

Or is it that you don't trust the author, so you suspect the factual claims underlying his argument are false? If that's the case, then why not cite outside sources to demonstrate as much?

It's not about negating his points or trusting the author.

I actually liked the piece. Until I reached the part of the article that started talking about how the free market failed. Characterizing the pre-ACA health insurance system as a free market is not a given and deserves much more discussion. I've already commented on the other issues I had with the end of the article, but at the end I felt that the real conclusion of the article (ACA! With exclamation points!) was at the end and that the points earlier served to support that conclusion.

As far as facts go, I don't have much factual issue with the piece except for the reliance on anecdote and his errors in omission.

As far as outside sources, the Atlantic article linked in these comments is good. I also like the coverage of the topic in the EconTalk podcast. For instance: http://www.econtalk.org/archives/2012/11/cochrane_on_hea.htm...

> the post pulls out some talking points about Mitt Romney and some conservative think tanks

Political or not, this historical description happens to be accurate. Obamacare is ultimately intellectually rooted in the Heritage Foundation's attempt to come up with an alternative to more liberal proposals. It is also the same ideas that made Romney a name to watch nationally in political circles circa 2007.

You said you were trying to offer a rebuttal. So I aim to show that the counterarguments presented do not rebut the author's main point.

His main point is, roughly: 1) a variety of factors, including fear and antiselection, made for a broken health insurance market prior to the ACA, and 2) the ACA has substantially mitigated some of those problems.

> A quick example is the obvious contradiction in the following quotes from the blog:

The author is using the term in subtly different ways in different contexts. Not the best rhetoric, I admit. Yet, does his failure to define or consistently use the term "free market" undermine his thesis? I would venture not, but I'd be open to a counterargument. Otherwise this objection seems like just so much caviling.

> Later the post pulls out some talking points about Mitt Romney and some conservative think tanks, which are definitely relevant if you are trying to score political points instead of discussing healthcare policy.

The Heritage Foundation and Mitt Romney both played significant roles in the history of healthcare in the US. Historical background is often very useful in a policy essay. That appears to be the reason the author mentioned them. You're free to disagree with the author's characterization of their roles. But you didn't.

> The closing section that glosses over the big problems with centralized planning systems (broken promises with no legal recourse, implementation issues caused by politics interfering with sound decision making) and finishes with enthusiastic exclamation points:

"Broken promises with no legal recourse" would be a pretty good characterization of pre-ACA health insurance, by the author's account. Why would you expect the ACA to be any worse in this regard?

My experience has been that private companies very often fall victim to "implementation issues caused by politics interfering with sound decision making." I've seen symptoms of that malady in every private health insurance company with which I've dealt. So, again, what evidence is there that this problem will be more acute under the ACA?

> It seems like political cheerleading to me, but maybe I'm missing something.

Yes, I believe you did. The article included much substantive information about the inner workings of health insurance companies and the economic forces that drive their behaviors. Indeed, there is much more of this sort of thing than there is political cheerleading, the latter being confined to the final section.

The presence of some political cheerleading does not indicate the absence of a valid argument. The fact that the author feels strongly about a certain political issue cannot be used to rebut his argument about that issue.

> To summarize this piece, it seems like this guy felt guilty for working at an insurance company, but now he feels better because the he politically supports the ACA, which he feels is going pretty well. Is there an apolitical thesis for this blog post that I'm missing? Why was it written if not to express a political position?

The author offers technical arguments concerning a matter of public policy. He then states a political opinion which follows logically from those technical arguments. There's nothing invalid about this pattern of reasoning or argumentation.

> Yet, does his failure to define or consistently use the term "free market" undermine his thesis?

Yes, since one of his main points was that the free market failed in this case. Even allowing that he imprecisely described a distorted market pre-ACA, he clearly prefers a differently-distorted market post-ACA without much justification about why this time it will work out in the end. Anecdotal evidence about quoted premiums (not even considering out-of-pocket expenses going forward) is not convincing.

> Historical background is often very useful in a policy essay.

He cherry-picks his historical background then. A better background would discuss the employer-provided healthcare mess, the financial insolvency and increasing costs for Medicare and Medicaid, and the perverse incentives of related programs like Social Security Disability. Even if going into the Republican/Democrat history, it's a limited view. He left out more piecemeal initiatives like Medicare Part D, health insurance co-ops, and subsidized high-risk pools.

So I disagree that the limited historical background the author provides is value-added. On the contrary, that talking point detracts from his thesis.

> Broken promises with no legal recourse" would be a pretty good characterization of pre-ACA health insurance, by the author's account. Why would you expect the ACA to be any worse in this regard?

You can sue an insurance company if it advertises one thing and then changes the deal after you sign up. People, the author included, are not keeping their plans and doctors. I was pointing out that this bait-and-switch will happen in either system, but companies can be held civilly liable for making bad promises.

> So, again, what evidence is there that this problem will be more acute under the ACA?

What evidence is there that it will be less acute? To me the convincing prima facia case is that ACA will at least be more of the same in this regard.

> The fact that the author feels strongly about a certain political issue cannot be used to rebut his argument about that issue.

I think you're missing my point. I actually thought the first half of the piece was interesting. But by the time I reached the end of the piece, it seemed to me that the beginning of the piece was just a roundabout setup to his final point about how ACA is great and cathartic to the author.

> The author offers technical arguments concerning a matter of public policy.

Some. But he also offer personal anecdotes about how he felt guilty that a family friend couldn't get insurance. And many of his arguments are appeals to fairness more than they are descriptions of incentives and outcomes.

> He then states a political opinion which follows logically from those technical arguments.

That's the thing. It's a political opinion, so it doesn't follow logically. Even his logic is suspect. There are matters of fact that aren't considered (employer-provided healthcare, healthcare costs for state governments, healthcare subsidies, price regulations, policies changing between states). There are arguments that aren't, strictly speaking, logical (association fallacies, false dichotomies, straw men).

A logical conclusion would be more modest, technical, and have fewer exclamation points.

> he clearly prefers a differently-distorted market post-ACA without much justification about why this time it will work out in the end.

He very precisely describes how parts of the ACA address different modes of market failure he observed. The existing-condition regulations prevent the bandwagon effect and corporate freeloading (only covering healthy people). The individual mandate prevents individual freeloading (retaining fallback benefits without paying into the system).

See, health care markets have a long history of failing (or at the very least failing to deliver value in comparison to their single-payer counterparts). We already know "undistorted" markets where care providers sell directly to patients don't work for emergency services (you have consent issues with unconscious people AND the nearest hospital is always an effective monopoly and can price gouge accordingly). The "undistorted" market already failed to deliver value. Health insurance companies tried to fix the problem but it turned out that deceiving customers into buying shit plans was a better business strategy than legitimate innovation. Again, the "undistorted" market already failed to deliver value.

The US strategy amounts to trying different permutations of regulations until we find one that allows the free-market to work. So far, it has been a whack-a-mole experiment that costs ~$1.5T and >40,000 lives per year (in comparison to single-payer systems). When does it end? Do you really want to pay 2x for care today in order to gamble on the possibility that eventually the correct combination of regulations will be discovered that creates an efficient free-market system?

> companies can be held civilly liable for making bad promises.

Then why were they getting away with it?

His observations of what the companies were getting away with contradict your claim that the courts were able to keep them in check. The ACA attempts to keep them in check by making it harder for them to dupe users in the first place (that's what the standardized silver/gold/platinum plans are all about).

> it seemed to me that the beginning of the piece was just a roundabout setup to his final point about how ACA is great

He uses evidence to support his thesis. How does that detract from his argument?

> [In addition to technical arguments,] he also offer personal anecdotes

Anecdotal evidence doesn't invalidate his technical arguments. Also, the support it provides his arguments can only be ignored in the face of better evidence. Do you have any?

> many of his arguments are appeals to fairness more than they are descriptions of incentives and outcomes.

Outcomes are judged by fairness. The "technical arguments" you just referred to describe incentives. The hell are you complaining about?

> It's a political opinion, so it doesn't follow logically.

One of the funny things about logic is that it knows its own limits (Godel Incompleteness). Unless you have a strict logical rebuttal, why should I discard his argument for yours (which, as far as I can tell, is based on faith rather than observations, experience, anecdotes, and analysis)?

> A logical conclusion would be more modest, technical, and have fewer exclamation points.

A logical conclusion that suffices to guide policy decisions doesn't exist. We must get over ourselves and make do with the best that we have.

Look, if you're actually interested in scholarly analysis of this kind of thing, here's a good starting place: http://www.pnhp.org/facts/single-payer-resources

I haven't found a paper-aggregation of comparable quality for the "other side" of the argument (I'm familiar with the 1989 Heritage Foundation memo, not much else). If you could reciprocate with such an aggregation, I'd be much obliged.

I understand astroturf to mean an organized group that purports to be grassroots (i.e. driven by broad membership) but is instead organized, funded, and run by a coterie paid by some outside entity.

It's hard to see how a post by an individual relating his own opinions and experiences can possibly fit that term. It seems like a category error.

Did you have some other definition in mind?

I couldn't agree more with the statement: 'Insurance is fraught with paradoxes.'

One of the actuaries where I worked wrote a paper or gave a talk somewhere that I found very thought-provoking. In the future, he said, healthcare costs might rise to be as high as 50% or even 90% of GDP, and there would be nothing intrinsically wrong with that. It would simply reflect our evolving priorities of valuing good health more than anything else in our lives.

If this is a real person giving a real talk that was taken seriously by other professionals, then that is terrifying (it's already ~20% GDP and climbing).

Why necessarily? If GDP grew overnight by 10x, and 90% of that went to health care, and as a result (hypothetically) we lived to an average life span of 300, would that not be a positive result?

Given how I feel today, 1/1/14, there is no way I could cope with that many New Years.

Because then the entire country would essentially be working to stay alive and healthy instead of towards loftier goals.

How much of the increased spending do we expect to be higher prices for the same care, and how much of it do we expect to be new types of care? Thus far there has been a lot of the former.

Perhaps we should look on delivering healthcare more efficiently. Automate what you can, drive down the remaining human costs.

I don't think the human costs are the major source of inefficiencies in US healthcare. Plenty of countries have much better health for much less expense, and they're not doing it through automation. My understanding is that too many players in the US system are incentivized to administer as much healthcare as possible (which may well not produce the greatest health), and at the highest possible price.

I think the point is that there is no intrinsically "right" level of health care spending. Spending 50% of income on health care would surely require some trade-offs, but that might be worth it, at least to some people.

Single-payer is inappropriate for the USA. Many other countries have made non-single-payer systems work well. Otherwise, a refreshing article.

Our current system is the most free-market in the developed world and near the bottom in most categories (most expensive with worst outcomes).

> Single-payer is inappropriate for the USA.

Citation needed.

Citation for an opinion? But see above.

Well the most efficiently functioning welfare states are ones that serve small and homogeneous populations. The United States is neither small nor homogeneous (and it is incredibly geographically dispersed for extra kicks).

The largest country in Europe (Germany) has a population that is less than 1/3 the that of the United States, and more homogeneous than every US state (let alone all of them combined) with the possible exception of Vermont.

And I bet even within Europe you would find the best and most efficient healthcare, education and other public services come from the smaller countries. Finland and Norway likely to better than Germany and France.

Given how many of us deal with challenges of "scaling up" tech, processes and organizations as part of our jobs, I'm surprised more people don't really seem to consider the practical limitations of scale for projects of government.

Canada is larger, more geographically dispersed and less homogeneous than the United States, and yet manages to have a functioning single-payer medical system.

Larger by land mass, perhaps, but much smaller by most other measures. And substantially more homogenous (not sure how you're getting a different impression). "Functioning" is maybe a decent description and a pretty low target.

> And substantially more homogenous (not sure how you're getting a different impression)

Not sure what you define as 'homogenous' but over 20% of Canada's population is foreign born, and less than 57% are english speaking by mother tongue.

I would not consider 80% white Western European to be as diverse as the US. I don't think the Canadian French thing contributes a whole lot to diversity.

Important to note that while Canada is geographically large, it's population is far from dispersed. Half the population lives in a ~700mi corridor:

http://en.wikipedia.org/wiki/Quebec_City%E2%80%93Windsor_Cor...

Not sure what you mean by one state being more or less homogeneous than another. The entities who would be receiving healthcare are 100% human, by population, regardless of state.

Are you working from a different definition of homogeneous?

> Single-payer is inappropriate for the USA.

Care to elaborate?

Sure. Pretty much everything in the USA should be free-er and more market-based than other countries because that is one of, if not THE, bedrock founding basis of this country and what has led it to become the worlds only super-power.

Also, we should strive to have the best system and I don't think that's possible with single payer (eg Canada/uk vs France/Switzerland/Singapore/japan).

But surely if we can observe that a "free-er and more market-based" approach is working less well than the approaches taken by other countries, we should change our approach? Our dubious superpower status will not be much comfort to those dying from treatable diseases they cannot afford to treat.

Superpower in what sense? I mean, I think I know what sense you mean, but there are some glaring socioeconomic inconsistencies with the label "superpower":

* We have the highest first-day infant mortality in the industrial world: http://www.cbsnews.com/news/us-has-highest-first-day-infant-...

* The US has a very high poverty rate compared to other industrialized nations: http://depts.washington.edu/wcpc/povertyintheus

* The US has the highest incarceration rate in the world: http://www.prb.org/Publications/Articles/2012/us-incarcerati...

http://lmgtfy.com/?q=Superpower

None of your points address that the US is indeed the worlds only superpower (as is commonly and widely understood).

They sure do. We are not a superpower when it comes to how many people we put in prison. We are not a superpower when it comes to how many children die poor on our streets.

And we're not a superpower when it comes to ensuring that our population doesn't die due to lack of health care while driving up the costs for everyone else.

Each one of the issues I bring up occur because of market forces. Prisons are a booming industry (see Arizona's state prisons). Poverty has many ties to health care being market-driven as well as education.

But you don't seem interested in refuting any of my points, so I guess we're done here.

By your definition the Soviet Union wasn't a superpower.

Hate to break it to you, but China is a world super-power, and they did it by exploiting the US' "free" market.

I don't think it's there yet. And it's mainly due to population and resources.

> Also, we should strive to have the best system and I don't think that's possible with single payer (eg Canada/uk vs France/Switzerland/Singapore/japan)

The system in Canada and the system in France are close to each other and both are miles apart from the system in the US. I agree that we should not blindly copy other countries, but if there was a successful system it would look more like the systems in Canada and France, i.e. a system in which a body like the government has a baseline affordable health insurance that average citizens can avail of, and other private companies on top that offer more privileges to those who can afford it.

In the US, even if you have health insurance there's no guarantee that healthcare costs will not wipe you out.

Can you please re-frame your argument in quantifiable terms?

There's nothing free about a market that we're all forced to participate in. The point conservatives overlook is that it's not Obama who's forcing us, but our own mortality.

Markets are great, but they're the wrong tool for this job. I don't know what the right tool is.

> Sure. Pretty much everything in the USA should be free-er and more market-based than other countries because that is one of, if not THE, bedrock founding basis of this country and what has led it to become the worlds only super-power.

Disagree; the US was settled on freedom of religion, exploitation of natural resources, and as a dumping ground for undesirables, and revolted over lack of political representation more than anything else. What made it a superpower was largely having the sense/fortune/irresponsibility to stay out of the world wars until the end (and avoid being attacked at home), and what made it the only one isn't what the US did so much as what it didn't do (specifically, the Soviet Union's grossly excessive military spending).

> Also, we should strive to have the best system and I don't think that's possible with single payer (eg Canada/uk vs France/Switzerland/Singapore/japan).

My friend in Japan flies back to the UK whenever he needs to see a doctor. What measures make you think non-single-payer is superior?

The USA already has single payer systems for the poor and the elderly.

So many health care posts and rebuttals these days. Surely a highly important issue for us collectively. But, also so political, and as a side-effect so prone to defensive stances.

As hackers, perhaps a good approach to these types of arguments, would be to throw out far-out ideas, if even just to push the collective pointer one way or another.

So here's my far out idea:

Maybe, instead of a single payer system, the gov't should pay each family a penalty fee (scaled exponentially) for each each family member that precedes the average, current life expectancy target (or even acquires a terminal illness). This will shift focus to the very sick or those at risk of being very sick. And, it would thereby eliminate any particular diseases or genetic limitations that push down the life expectancy. Of course, the unintended consequences would be that some family members would start killing off other family members for benefit. But, this would just highlight psychopaths, and thus be a win-win long run.

I am UK citizen and see the NHS (universal, nationalised, funded from taxation) morphing to accommodate more market led enterprise.

I often wonder how other nations health systems work. The American system is often ridiculed anedotally in the UK as an unfair example.

not related to the article, but I love the simplicity of the site. No Facebook plugins, twitter BS, huge images, ...

Even the comment section didn't have a any crap. beautiful.

"If a misstatement is discovered, the policy would be declared null and void, and any premiums paid would be refunded."

... not in my experience.

everyone with half a brain can see the system is awful at healing people... But everyone attributes it to incompetence while forgetting that the US, besides nazi Germany, was the only country to have eugenics into law.

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