a) Health Insurance companies do in fact spread the risk over entire groups that they cover
b) Discriminating between pools makes sense, to a point. Is it fair for men to pay more than women, when women use health benefits far more often? (and not just from childbirth, but that’s a big piece of it). Is it fair for non-smokers who choose to take care of themselves to subsidize the health of smokers?
c) you suggest that health companies shouldn’t ‘quibble’ over taking on various groups, clearly these would be groups that would lower their margins (else why else would they reject them now) - my point is, their profit margins are slim enough already; did you want them to operate at a loss? For how long?
Well, that’s the problem, isn’t it? The insurance companies are on record as doing some very much Not Nice things to protect their profits. The question becomes why?
Is it because without doing Not Nice things to our fellow Americans, they cannot sustain a profit, and will fold? Or could they sustain a modest but real profit without doing Not Nice things, but choose to do so out of, well, greed.
If the job is impossible, we can forgive them for failing, but then they simply must get out of the way, if they can’t do it. If they can do it, and know they can do it, but refuse to do so to inflate their bottom line, then they are an immoral business that preys on our fellow Americans, and have no right to continue to be in business.
200 employers is quite a large company. but if you love waste in coordinating the buying of insurance policies amongst many many small businesses with different needs and reservation prices, be my guest. maybe all of those companies can merge their operations, too. oh, wait, you were in the health insurance benefits sector of the economy prior to your misfortune, weren’t you?
no, it’s not a small effect. if you’ve got leukemia and all the accompanying complications and side effects, having an insurance policy that covers a broken leg is going to be a cold comfort - and won’t do anything to cover the vast majority of your medical expenses. but thanks for taking care of an irrelevant issue.
they deny your claim because they suspect that your “just new” illness has manifested previous symptoms. and then you litigate.
my definition of “pre-existing condition” is consistent with the definition of the term as written in my current health insurance policy. so i don’t care what you think.
yes. as you apparently “missed” the reason it works with group policies is they want a fortune 500 company’s business more than they don’t want to cover pre-existing conditions. the only way fortune 500 gets a deduction is if the policy they buy does not exclude pre-existings. this incentive mechanism doesn’t work with small employers or individuals.
and as far as i’m concerned, i shouldn’t pay into a disability insurance scheme to pay for people who have back pain and “can’t work”.
yes, that is a completely different matter. and not taking care of this person is a travesty. because if you cure him he can pay for you to sit on your butt and collect disability.
i honestly don’t know what’s floating around congress anymore. i don’t frankly give a shit because it’s going to be some compromised bullshit that ensures that insurance companies are kept in the loop.
because socialism is an economic system where the government owns means of productions. and this is merely an addition to the social insurance policies that exist in this country, like SSDI.
and people that are on food stamps may have paid prior income tax, and most assuredly pay sales tax. so it’s not really insurance then, either.
no, the reason they don’t tax food stamps is that in order to qualify for them, you have to be so broke that you’re presumptively not going to pass your standard deduction + personal exemption barriers. taxing an extremely broke person is foolhardy, from a public policy perspective. and, since food stamps and subsidized housing are payments-in-kind, and not in actual money, you’re going to be trying to squeeze blood from a turnip.
bankruptcy exemptions in illinois are thus:
12k equity in a house (assuming you’re fortunate enough to own; most bankrupt people don’t even approach this level)
2.4k equity in an automobile
4k equity in everything else except clothes
so, absent a house, you can own no more than 6,400, basically. yeah, that’s scrooge mcduck level of wealth.
so now my question: why is a social insurance policy in the form of SSDI any less contemptible to you than a social insurance policy in the form of medical coverage?
I have a friend in Canada that got a heart transplant. He had to wait as they tried everything they could , using every other alternative ,until they felt they had no choice. His new heart is about 3 years old now. He is doing fine. He did not have to declare bankruptcy. The drugs he has to take are not killing his standard of living. He does not live in constant fear. Just escaping the pressure is so much more healthful.
Well, since you ask, I personally have no problem with health insurance companies charging more for smokers than for non-smokers. I get a little more reluctant when you start talking about other discriminating factors, since there’s a slippery slope: do we start doing genetic workups on people to see who carries the cancer genes? Do we use big-brother techniques to see who hits the sauce too much, or uses recreational drugs, and charge them accordingly to compensate for the risk? Not sure I want to go there.
And elucidator, as for the Not Nice Things issue you have, I’m guessing we’re partially in agreement. Again, personally, I believe that Congress should mandate some kind of pre-existing condition coverage, do something about tort reform so there isn’t so much defensive testing (30% of all testing costs, in one report I saw), and expand the market across the states.
So, again IMHO (I know, wrong board), I don’t burn down the house if the sink is leaking; I fix the sink. Same thing with UHC - if you want to fix certain problems, you don’t trash the existing system and start from scratch, especially when starting over means $1T (or $3T, if you listen to talk radio) gets heaped onto the debt our kids will have to pay.
The question is, why is health insurance almost exclusively negotiated among groups, and the larger the group, the better terms they are able to get?
If a company with 1,000 employees is able to buy health insurance for x amount of dollars, why can’t I go to their insurer and buy the exact same coverage for myself for 1/1,000 x? What if 999 more individuals did the same thing? If the insurance company turns a profit by insuring the first group of 1,000, woldn’t they double that profit taking on 1,000 more customers for the same terms?
The narrowness of their margins doesn’t enter into it.
this is like asking why can’t you go to Cartier and ask them to sell you a handbag for what they sell it to Bloomingdale’s for. I mean, after all, Cartier is profiting and you’d be able to pay conservatively 1/2 of what you would at Bloomingdales.
while I agree that it’s a problem, i’m not so sure the solution is something that can probably be legislated into existence.
price discrimination, exercising of monopsony power, etc. are all considered valid acts of free enterprise - modifying this out of existence is probably going to run afoul of a law or two that we have in this country.
besides, if that’s what’s being offered as a “republican” solution (i.e. a solution that doesn’t implicate a massive government intrusion into private economic transactions) then it is hilariously contradictory.
They’re shucking you. Tort reform is a bogus issue, we could go into great length on that, and will if you insist, but spend some googling on it and you’ll see what I mean. As far as expanding the market goes, that sounds ok, until you realize that all that is likely to happen is that the insurance companies will set up postal boxes in whatever state is most friendly to their interests, and declare that they are only subject to the laws of that most-friendly state. Just like the banks did with credit/debit cards, which now mostly come from Fargo, ND. (Exclusively? Maybe…)
But my main point is as follows: if the insurance companies cannot make a respectable but modest profit without doing the nasty to their customers, then they should already be doing so. And if “competition” had any real influence on them, they would be, wouldn’t they?
And if they can’t provide a steady but modest profit without treating our fellow citizens like garbage, then fuck 'em, who needs them, what good are they?
I know that groups can negotiate better purchasing terms than an individual can. I’m trying to find out why that difference is so extreme in the case of health insurance, particularly compared to other types of insurance.
Could I form a company that re-sells health insurance? I’ll find 1,000 individuals who want health insurance. They’ll pay me, then I’ll shop around to Cigna, Blue Cross, etc. and negotiate a group policy for all of us. Is that legal or feasible? Is it already being done?
Car insurance is sold to individuals. Depending on who files a claim, the insurance company makes money on some customers, loses money on others, and turns a profit on the aggregate. But all the analysis I read about health insurance talks as if the risks must be shared only amongst the members of a particular policy. Why?
you can form a health insurance/benefits agency. they do the work that you suggest (much like an independent (or not) insurance agent as you know them). indeed, benefits consulting is primed to take a huge hit if UHC is created, which probably colors certain posters’ impressions of the regime. ahem…curlcoa…ahem…
i don’t know if there are any legal/regulatory reasons for the second, but one thing to remember is that people are not cars. the type of job you have, the genetics you have, the income levels you have, etc. all create tons more diversity in the riskiness faced for a health insurer as opposed to an automobile insurer. further, the synergy of different inputs onto the effects of a human body are not well known (i.e. it’s almost impossible to tell how variables a, b, c interact into a human body to produce what results) so there’s more uncertainty, which would suggest that datum which suggest actual risk factors becomes even more important in setting premium rates.
demographics of employers are different, so one way an insurance company can “afford” to price compete with other insurers is by singling out the “cheap to cover” groups. Corp X who engages in business where all of its employees are engaged in office work buys insurance on price (largely). if InsureCo X lumps in their risk pool Corp Y who engages in log cutting, they’re going to have to increase Corp X’s premiums. So Corp X will go to InsureCo Y who doesn’t do that.
with car insurance, there is a finite number of reasonable things that can happen, and the correlations between behaviors and outcomes is far stronger. further, with driving, there is a finite set of “fuck ups” that a driver can make. put in aggregate, this probably makes car insurance a far more certain type of insurance product as opposed to health “insurance” (i don’t really consider health insurance to be an insurance product. you can’t exactly take reasonable steps to modify your own riskiness/probability for injury [edit to: non-lifestyle-based diseases and afflictions]. if you get sick, you get sick) which improves risk assessment.
then you’ve got the logistics of it. as you say car insurance is purchased on an individual-by-individual basis. employer-based healthcare is not. to make an apt comparison, i bet you the “fleet insurance” rates, on a per-car basis, charged to a company who has many hundreds of cars owned by the company and operated by the employees for business travel are significantly less than what you or i pay for our car insurance. (obviously some of that is because fleet cars may not all be used at once, but i think you get my idea here)
Understood, but the whole point of managing an insurance company is to deal with probabilities. It’s hard to predict what will happen to one person. But if you take a million people, a good statistician can predict how many will get sick or have car accidents, and be pretty close to the right number. (We just won’t know which ones it will happen to.) The larger the group, the more accurate the predictions are likely to become. An insurance company could minimize its uncertainty by taking on as many customers as it can get.
I suspect this is a getting closer to the answer I’m looking for. People of working age are less likely to need expensive medical treatment than the elderly retired. For an insurer to structure their whole business in such a way that customers pay in for years and get shuffled off their books before they need to collect strikes me as disingenuous to the point of sleaze.
sure, my point is more that you can predict with a lot greater accuracy how many will have car accidents over how many will get sick (more accurately, how much it will cost), because the sources of car crashes are easier to determine and subsequently correct via premium increases.
i won’t disagree. as i said, it doesn’t feel like insurance to me.
Buying in bulk = cheaper insurance. You offload a lot of the administrivia, and more importantly (tremendously more), the cost of client acquisition.
Think of the cost of sales of signing up one client. Now eliminate that - now imagine that gets rolled into the (lower) premiums. I’m sure there’s other factors, like the aformentioned loggers vs office workers. Plus I would guess that usually felons, drug addicts, and other high risk/high costs types are probably far less likely to get most jobs that offer health insurance, which also acts as a filter of sorts to reduce costs (and therefore premiums).
Still, I’d guess that the cost of client acquisition is the largest driver here.
Life insurance doesn’t have nearly as many transactions; that’s why indiv insurance is a far better deal when that’s bought that way, compared to health. Car insurance is somewhere in between (note that Geico and others frequently offer group discounts when bought through a business, an alumni group, etc).
This was the first hit when I googled cost of definsive medicine.
A couple of Stanford knuckleheads suggest it’s between 5-9% of all healthcare costs, $207b/year, meaning $1700-$2000 per family, each year, to cover the costs of defensive medicine. This is obviously a monster number.
http://www.aaos.org/news/aaosnow/nov08/managing7.asp
Equally as obvious is the fact that the Democratic party is largely in the pocket of the trial lawyers (their largest political contributor), and therefore it’s very likely that there won’t be much of an appetite suppressant for unnecessary testing in the final health care reform bill likely to leave Congress.
Does “client acquisition” refer primarily to advertising (trying to distinguish themselves from other insurers and attract clients) or to the process of qualifying for a policy (background and medical checks to determine which clients to turn away)?
Do companies offer health insurance that skips routine events (like periodic checkups or dental cleanings) and kicks in only for investigating and treating actual illnesses? That would bring the number of transactions way down. I’d be content with coverage like that, provided that the premiums reflected the amount that I was saving the insurance company in claims and administrative costs.
step two is demonstrating the proportion of defensive medicine fairly attributable to a legal regime needing reform (subset of step 2 is demonstrating that reform is needed)
can you think of any other reasons why a doctor may be extremely defensive when they practice medicine?
laze?
desire to ensure a thorough diagnosis?
ownership stake/profit motive in the diagnostic laboratory?
difficulty in diagnosing certain ailments and distinguishing this ailment from a routine matter that presents with similar symptoms?
patient demand that these tests be completed?
no incentive not to order the test?
Well Robot, being a business dev guy (sales, really) although not in that industry, client acquisition includes everything from marketing to distribution channels to legal bullsh!t to commissions (maybe the largest cost). Plus all the paperwork stuff. And credit checks, payment setup, etc.
Rumor, while I’m hesitant to cast aspersions on your motives (I guess I suck at pit-posting), did you read the link? The numbers we’re talking about don’t include all medical testing; rather the unnecessary testing (in the opinion of the doctors interviewed) purely as defense against lawsuits, the cost of medical malpractice insurance, and the cost of defensive lawyers hired as a prophylactic against bogus costs. One hospital in Hawaii said that 20 yrs ago that had one lawyer to deal with the crazy lawsuits. Now they have six. That seven figure cost gets rolled into the numbers we’re talking about.
I like another idea I’ve seen floated about in the ether (maybe by Krauthammer? not sure, sry no link): establish an objective nationwide board (regime/czar I guess, if you’re a cynic) that does reviews of claims and makes malpractice awards on some rational basis, much like OSHA and NLRB and OWC work now.
no, i did not read the article. i just assumed that stat was for “defensive medicine” writ large as I have understood the term to be utilized in most studies i’ve perused. This article is scant on facts and reporting of studies, but i find the assertion laughable that 10 cents out of every dollar spent in this country is spent on unnecessary tests **solely **because the doctor is ordering tests to protect from [edit to: improper] lawsuits.
i mean read that again. does that even sound remotely accurate?
i will try to drum up a study i read regarding a comparison of canadian and american malpractice awards.
this is dated Oct 9, 2009. It seems we’re basically talking $35 bucks a person here. (Rumor is making a lewd gesture with his fingers curled around to make an O and moving up in down in a repetitive motion)