Healthcare/Health Insurance: what is the actual problem?

One has to wonder how much the insurance companies are factoring in the threat by Trump to not pay the federal subsidies. Insurance is priced based on risk and that is a pretty significant risk to an insurance company's bottom line. The "Repeal" is even worse.

 

http://www.cnn.com/2017/08/09/politics/single-payer-litmus-test/index.html

The GOP better get their act together on healthcare. They will have to acknowledge that the pre-Obama status of healthcare was not acceptable and actually come to the table with a real plan, not just tweaks of O-care and/or a return to the old days.

This is one part I wholeheartedly agree with....
"There are a lot of entrepreneurs and tech leaders who say their biggest disadvantage competitively is the cost of health care. It's not tax policy, it's not wages, it's health care costs," Khanna said. "So you have the moral argument for it, but it's also something that you can get business leaders and technology leaders excited about."

Having businesses be the conduit for health insurance is a very poor idea. You may be able to get a group policy/rate that way, but there are so many drawbacks to that system. Not too mention the underfunded nature of most post-retirement plans that promised healthcare. Those things are going to be bankrupt.

Health insurance should not be linked to employment.

 

That would be a revolutionary change. It may be a good idea, but it would take a lot of selling to build political consensus to make such a change. In a political world where everybody brags about being a "fighter" I hope for but do not expect politicos to be "problem solvers."

 

We are one of the only countries in the world that does this and it is a burden on our businesses and limits employee mobility between companies.

 

Of course the problem with de-linking health insurance from employment is that if you do that without dramatically bringing down costs, it would be vicious for middle class and lower class families. Would employers pay more cash wages to employees to make up for not providing insurance? Some would. Some wouldn't. On the lower wage end, most wouldn't. Hell, are Walmart and McDonald's going to give their employees a massive across-the-board raise so they can all go buy individual health insurance plans? LOL. No chance in hell. They're going to tell them to go apply for Medicaid. (Of course, Medicaid already insures tons of low wage workers and their families.)

If you separated health insurance from employment, as a practical matter, you'd have to see a public option of some kind that charged people according to income. If you didn't, then the uninsured rate would skyrocket to politically unviable levels.

It's just another reason why I think we're eventually going to have a national healthcare system in the US. And frankly, I think the business lobby (except of course the medical and insurance lobbies which are sizable) is going to become more receptive to it, because though they'd shoulder much of the costs, they're already doing that for their employees to a great extent. If they had a chance to get out of that mess, I think many of them would take that chance even if it meant higher taxes.

And again, if you're a conservative, quit blabbing about the free market. With Trump, we chose a new political coalition that isn't going to go along with that. It has some upside on cultural and social issues, but on economics, it's a step toward the Left. The new voters weren't going to go along when they were voting Democratic, and not too many people become less concerned with their health with age. Passing some big free market plan is out of the question. Not gonna happen in our lifetime.

 

^^^^ very true.

If I were orchestrating it, I would gradually phase it in by eliminating the requirement to provide insurance for employers with under a specified headcount. At first 100 employees or less, then 500 or less, then 1000 or less, etc.

I'm also a big advocate of flat and transparent pricing from doctors and hospitals. If you take away the market distortions brought on by the insurance carriers, I think it is a viable solution. If group policy insurance carriers always have leverage over pricing then the individuals won't stand a chance on pricing.

I'm not saying we should tell hospital X that they should charge XXXX for a hernia procedure, I'm saying that if they charge patient A XXXX then they should charge patient B exactly the same regardless of whether that patient is paying cash or they are with carrier A or carrier B.

 

I'm not so sure about this. Insurance carriers have leverage because they're essentially bulk purchasers of medical services. That's how almost everything works. If I want to buy one loaf of bread, a baker might charge me $1.50, and he's not going to negotiate that. If I want to buy 500 loaves of bread, that $1.50 per loaf price is going to get a lot softer, because I'm giving him a chance to do a lot more business than if I only wanted one, and that gives me leverage on him. I don't see a reason why medical services should be any different.

You're arguing around the point, but what you really want (without saying so) is single payer. The idea behind it is that the entire country uses its leverage as a bulk purchaser of medical services to hold down costs. Nobody gets a better deal than anyone else, but at least theoretically, nobody gets fleeced either. It's OK to take that position, even if I don't. I live in a country that has a quasi-single payer system, and people seem to generally like it. If we adopted it in the US (or something similar), my guess is that it wouldn't be the panacea that the Left thinks it would be, but it also wouldn't be the catastrophe that the Right thinks it would be.

 

I said this back when Obamacare was being debated - if I was going to make one change, I would make it illegal for employers to provide health insurance. They would be directed to put that money into their employee's paychecks. Then people would have to shop for their own insurance. We have divorced most people from knowing or caring what their health care costs are, and as such, have removed market forces.

 

I don't think I am. My house insurer doesn't get a discount on plywood just because a lot of people buy insurance from USAA. They don't get a discount on a new fender when my son has a wreck. They pay the same as if I were coming off the street and paying cash.

In my mind 'single-payer' is synonymous with government run. I don't think that is the right direction.

I think health insurance companies should be relegated to providing insurance for perceived risk and not coordinating "networks" and appropriate levels of care.

 

I don't know about all the levers to make this mandate work but I do like sentiment. The other prerequisite I would suggest is that I would put insurance companies, doctors and hospitals in a room and require them to come up with 5 (+/-) insurance bands that would function like the bond ratings systems. AAA rated, etc. Consumers would need simpler choices. Health care/health insurance is so much more complicated than pretty much every other good/service that it would take months for the average American to digest enough information to make an informed choice. Average Joe has no idea that he's going to need a specific type of Xray/MRI/scan to treat XYZ condition. Someone with knowledge of treatment methods/limits/likelihoods would need to design tiers of coverage so that Average Joe isn't paralyzed by indecision or blind sided by a response like "oh, you chose plan 2020, with rider A and D, in order to have Xrays included, you should have chosen plan 2021, with rider B and D. I'm sorry, here's your bill for $4,000 in Xray fees."

 

I'm not sure that's correct. My car insurer has deals with auto body shops/renovation companies. For example, I hit a deer in Montana with a minivan. My insurance company sent a tow-truck from Seattle to Deer Lodge, MT to pick it up then had it delivered to a body shop they worked with for assessment and repairs. If I chose to use my own auto-body shop they would have paid a flat fee but with their pre-negotiated shop I didn't have to take on that risk. Like my medical insurance provider that dictates the network, my auto-insurance has their own "preferred" network of providers. I get less benefit by going out of network.

 

It depends. An insurer like USAA can't require you to use a certain body shop or plywood vendor, but can they encourage you? Absolutely, and they do that precisely because they can get deals.

I don't think it's the right direction either, but on a specific level, it's what is most compatible with your goals.

 

That how things worked until the FDR price/wage freezes, which encouraged businesses to start offering benefits to get around their inability to offer more money to attract better workers.

 

Great article.
http://www.oftwominds.com/blogaug17/profit-healthcare8-17.html?fullweb=1

 

Chuck Smith would be right if he were not absolutely wrong. The only way to become a "monopoly" is to be able to prevent other potential competitors from entering the market. That doesn't exist in the healthcare world with the exception of certain new drugs or equipment protected by patents for a short period of time.

 

It's about time someone brought up this idea. IMHO, it's the best way to tackle the healthcare fiasco and might even get bipartisan support.

Rick Santorum's new healthcare plan would give federal funds to each state. Thus allowing them to create and run a healthcare system that best fits their local population.

Offering places like CA, OR, and WA the freedom to run their own statewide single payer system should have real appeal to their Liberal leaders and citizens.

What's the problem? Here's your money, now sink or swim doing it your way. We'll see how much faith Lib leaders have in single-payer with the chance to own it.

My guess is all Dems would vote it down on phony grounds of too little funds or some other cop out. They know good and well they'll go bust with that nonsense and directly shoulder all the blame while Texas is hitting home runs with our free market system.

Rick Santorum’s Healthcare Plans Could Revive Obamacare Repeal Effort

Santorum's plan would repeal and replace Obamacare by block granting the Affordable Care Act to the states, allowing local governments to create healthcare systems that work best for the local populations. Santorum’s plan, sponsored by Sens. Lindsey Graham (R-SC), Bill Cassidy (R-LA), and Dean Heller (R-NV), would also eliminate Obamacare’s individual and employer mandate.

Adam Slavitt, Obama Centers for Medicare and Medicaid (CMS) administrator, said that the Graham-Cassidy Obamacare repeal bill remains “the most significant threat to repeal ACA. Trump is bullying the Senate to take it up.”

Sen. Rick Santorum told Breitbart News in an exclusive interview that the Graham-Cassidy bill idea would “put a stake in the heart of single-payer health care.”

“Now that every state will have their own healthcare system, no way will the government be able to take it back,” Santorum added.

Santorum contends that if America were to pass this bill to block grant Obamacare to the states, it would prevent Democrats from trying to pass a national, single-payer healthcare scheme because California could keep Obamacare while more conservative states, such as Texas, could have a more free-market alternative.

Former Sen. Santorum argued that by creating competition among the states, states could experiment and find the best solution for health care. Santorum pointed to the increased competition after Republicans passed welfare reform in 1996, where many states copied former Gov. Tommy Thompson’s innovative welfare reforms.

“Well, that’s what happened if you look at what happened with welfare, you saw that Tommy Thompson did incredibly innovative things with welfare, and mostly other states copied that,” Santorum said.

Santorum explained to Breitbart News that this local experimentation could allow states to take innovative approaches that work best for their state. He said, “That’s the idea, is to give everybody in America the same amount of money for their population and let every state design their own program. I want this be very clear: this is not a Medicaid expansion. Now, having said that, if California simply wants to expand Medicaid with this money, good luck. They’re going to have to cut their program dramatically because they don’t have the money with what they’re funding now. But if they want to take that money and create high-risk pools, HSAs, they have flexibility to do anything.”

Santorum also said he will continue to work with Sens. Mike Lee (R-UT) and Ted Cruz (R-TX) on allowing states to reform Obamacare regulations. Sens. Lee and Cruz sponsored a “Consumer Freedom Amendment” for the Senate leadership’s Better Care Reconciliation Act (BCRA) that would allow health insurers to offer plans that do not comply with Obamacare insurance regulations, such as community ratings and essential health benefits, as long as they also offer plans that do comply with the rules.

A McKinsey and Co. report found that the Consumer Freedom Amendment could lower Obamacare-compliant plans for a 40-year-old as much as 30 percent, and premiums for non-Obamacare compliant plans could be 77 percent lower compared to Obamacare plans. McKinsey also reported that Obamacare insurance regulations, such as community ratings and guaranteed issue, were the primary drive for the spike in insurance premiums since Obamacare became law.

Sen. Heller claimed that his healthcare plan remains the most feasible solution to repealing Obamacare and would help states solve their local healthcare problems.

“By allowing states to address the unique health-care needs of their populations, it gives states the flexibility to innovate and come up with a tailored approach that is most appropriate for their citizens,” Heller said.

Santorum told Breitbart News, “In short, this is the last chance for a healthcare bill to pass, and this is the best idea that’s been floated yet.”

 

Wasn't the Ted Cruz amendment the one that initially killed any deal? Why would it suddenly be a good idea now when far less than 51 Senators supported it?

This appears to be a block grant plan. Limit the federal spend under the guise of flexibility. You already had at least 2 Republican governors say "hell no" to that plan.

I grade this a regurgitation of failed plans.

 

There is really very little to be gained by having a national system. Other than drugs, the product (medical care) is largely delivered to local people by local people so a system that is regionally/state based would make more sense. I can see big insurers and hospital conglomerates pushing back because it means they would have to negotiate several different systems but a state based system seems like it would work better than a national system for the consumers which is really what I care about anyway.

 

That statement applies to nearly every program the federal gov dictates and controls.

Blows my mind how any logical person regardless of party or location favors federal control over local state run systems. Customization and accountability, how is that bad?

The majority of CA residents want single-payer healthcare and to sign climate deals pledging state funds. As a Texan I have zero problem with it.

If that's what they choose to make their life happier, and it doesn't effect my healthcare or spend my tax contribution on climate control fantasy, by all means go for it.

People and places are very different all over this country. Letting the states best serve the unique needs and desires of their citizens is just common sense.

 

My worry about this would be that they would likely enact laws to come alongside and artificially boost their state's system and artificially punish competing systems, driving the price and the headaches up for all the existing options.

 

In some states (especially blue ones) this would be a major concern and very likely. However, states like Texas would return to more stringent requirements to qualify for Medicare/Medicaid like the past and rely heavily on free market competition for the vast majority of its population.

 

Texas hasn't really relied on free market competition. In fact, the way health insurance is organized at the national level, it's have really been possible for Texas to set up a competitive market for insurance. What Texas has mostly done is just accept that a large number of its people (about 17 percent) will be uninsured and that a similar number will be on Medicaid.

Also, Medicare isn't part of the equation. Medicare is and always has been federally funded and federally administered. That's no going to change. The elderly would freak out if it did, and they all vote.

 

I doubt the way Texas had to work within the federal system in the past would resemble their new setup with 100% control over design and means of insuring its citizens.

My reference to the past was Texas likely returning to the more stringent federal requirements for at least Medicaid, which Obama loosened to extremes to all but guarantee the sh*tshow would lead to single payer.

Not sure about Medicare but Santorum's plan did mention Medicaid being state controlled. Seems unlikely it would leave Medicare under federal control when all else is managed at the state level and each state's system will vary greatly.

Why would the elderly freak out over switching to state run Medicare? If each state received and applied the funds needed to keep as is and requirements were the same, where's the danger? Simply afraid of change for change sake without considering facts?

If Medicare recipients are too afraid to receive the same benefits in a state managed system instead of federal, might as well switch to single payer now and call it a day.

 

Medicare is already single payer and it negotiates prices pretty darned effectively. Some physicians won't accept Medicare reimbursements ... but plenty will.

 

Yes it is. I was referring to the whole system going single payer if impossible for Medicare recipients to trust their coverage swapping to state control.

Meaning those fears should have little merit if Medicare is handled properly at the state level. Possibly even laws written into the new healthcare plan that dictates each state's handling of Medicare, while the rest is up to the state.

If elderly resistance to change is piled on with all the other complaints and refusals for other healthcare proposals, then there'd seem to be no solution that can pass.

Seems to me the state run option is the most feasible one presented to this point.

 

It wouldn't. The Legislature would probably draw up the rules with similar priorities to how homeowners insurance, auto insurance, and workers compensation insurance are handled. In other words, it would be written to strongly favor the carriers.

Medicaid is an entirely different ballgame. It's already administered at the state level (with a mixture of state and federal regulations) and funded by both the state and federal governments. Medicare is funded by a federal payroll tax and administered by the feds. The states have no role in the program, and the feds would never turn such a program over to the states. Way too much power, political leverage, and money to give up.

The elderly wouldn't tolerate it because doing so would end the federal guarantee of healthcare for the elderly. Some states would keep the program basically as it is, but some states would make it less generous. The elderly just aren't going to tolerate that. Look at the changes suggested back in 1995. Those were extremely minor adjustments - far less significant than devolving the program to the states, and it cost the GOP big time. They didn't get the senior citizen back until 2004.

People say Social Security is the third rail of politics. It is, but Medicare is much more so because seniors are far more dependent on it. People can save for their own retirement, and many do. However, very few senior citizens could afford to pay for their own healthcare whether they did it with cash or by purchasing health insurance. It's just way too expensive. One stroke, one heart attack, one hip replacement surgery, and it's losing the house and going into bankruptcy court. And they know it. Furthermore, the elderly vote in huge numbers - not because there are that many of them but because their turnout rates are extremely high. Trust me. Medicare will never go away or be made to be less generous to its recipients. If the program runs out of money, Congress will raise the payroll tax or do whatever it takes to keep it going.

 

That's a naive perspective. States are impacted by what other states do. For example, when California raises their CAFE standards car companies must react do to the sheer size of their economy and market. In turn, Texas gets both the benefit and cost of California's actions.

Are you in favor of Heath Care companies being able to sell across state lines? If so, then that initiative will have zero impact on costs/services if concurrently each state continues to have completely different health care rules. Forcing companies to have different systems/operating procedures by state breeds inefficiencies that directly impact the cost of services they provide.

 

Then those companies will lose out to the local companies and companies that can overcome those inefficiencies.

 

It makes "economies of scale" a moot point. Service may be better but clearly there is no desire or plan to control costs. Local healthcare providers will love this plan though since they would not have to worry about any cross-state competition or pressure from large insurance companies or healthcare providers.