The open enrollment program will have some effect on adverse selection, but not as much as you’d think. The most common risk from avoiding health insurance is that you will develop chronic conditions that impose large lifetime costs, such as degenerative diseases like MS, diabetes, heart disease, and the like. An open enrollment period does little to increase the risk of waiting for insurance since the bulk of treatment costs come years after diagnosis.
If you are diagnosed with type II diabetes, early treatments are cheap. It’s not until much later that the costs of the disease increase as the side effects grow. If you are diagnosed with heart disease, you can generally put off treatments for a fairly long time - certainly long enough to wait for your next enrollment period. Even cancer detection often starts with less expensive treatments and months of diagnostic tests before invasive, expensive procedures are carried out.
In the end, I doubt that the open enrollment periods are going to do a whole lot to combat adverse selection.
No, my point was that if we assume the law was original designed with the correct balance of fines and subsidies, then by selectively removing the employer mandate you would expect the balance to shift towards pushing employees off of employer health care and onto the exchanges.
No, I was advocating a catastrophic-care model coupled with a progressive deductible to ease the burden on poor people. I’ve been pretty consistent on that. Sure, I opposed Obamacare, for very good reasons which are now becoming clear to more and more people. It’s a terrible piece of legislation, and always has been.
Unless the higher cost suppliers want to go out of business, they will examine their cost structure and become more efficient.
And I can assure you that at least one doctor complains bitterly about the existing payments. So it must have gotten cut sometime in the past.
And getting rid of the Bush Medicare Advantage gift to the insurance companies will help also.
Alternatively they can stop taking Medicare patients.
Medicare pays lower than private insurance (& Medicaid pays lower than Medicare). The question is whether there can be further cuts, or whether these rates have been cut as far as they can go.
One minor part of the ACA was to raise the Medicaid reimbursement rates for primary care services to Medicare levels for 2013 & 2014. This was an acknowlegment that cutting these rates too low led to a shortage of doctors who accept Medicaid and overreliance on ER visits by Medicaid patients.
Not at all. People will be charitable when they choose their own charities. People generally will not be charitable when it is imposed on them.
There is a box on your tax form which allows you to give more in taxes than you are legally required to do. Have you ever checked it and sent Uncle Sam more money than you had to? Do you know anyone who ever has?
For that matter, have you ever had a legitimate deduction on your taxes that you chose not to take simply because you felt that your ‘fair share’ should be higher?
Hell, even the Obamas and Clintons will admit that they take every single deduction they can get. I believe the Clintons once even deducted the used clothing they gave to charity. If they aren’t willing to pay more tax voluntarily, who is? And that’s what we’re talking about - voluntarily paying more tax since the the issue is now being treated as a tax issue.
The open enrollment periods means your risk exposure to medical costs is on average only about 5 months until you can sign up. That eliminates the vast majority of health care costs from consideration. Only accidental injury is a risk, and many people will be willing to take that risk - especially since the vast majority of serious accidental injuries are already covered by other forms of insurance such as auto insurance or employment insurance.
I disagree. And I can prove it - the majority of young people without employer-provided insurance are already choosing to go uninsured. And they’re doing so even though they run the risk of developing long-term debilitating conditions that could impose millions in lifetime costs. The new system of exceptions for pre-existing conditions couples with open enrollment periods makes that risk a tiny fraction of what it already is by reducing a lifetime of recurring costs to only a few months of costs until the consumer can sign on to an ‘insurance’ plan.
I’m going to call you on that. The one state you quoted is the lowest I’ve found, and you missed a few things there anyway: In Texas it’s a $350 fine, PLUS a penalty of $250/yr for three years, PLUS impoundment of the vehicle, for which you have to pay the towing charges and pay a fee to the impound to get it out. That’s true in all states, btw. And how much do you think court costs might be?
The fine for driving without insurance in Alberta is $2875.
In Ontario it’s a fine of $5,000- $25,000 for a first offense and $50,000 for second offense, plus loss of license for up to a year.
In California you can lose your license for four years.
In New York, it’s a fine up to $1,500 and you can lose your license for up to a year, plus you have to pay $750 to reinstate your license. Plus of course the impound/towing costs and court fees.
The point is that driving without insurance has to have a high penalty because otherwise many more people would choose the risk. In other words, they’re not insuring out of a sense of civic duty or shared responsibility to others - they’re doing it because of the costs and benefits to them.
Obamacare’s individual mandate isn’t even a penalty any more - it’s simply a tax that can be offset by having insurance. That’s what the Supreme Court ruled, and therefore there’s not even going to be a stigma attached to it. You can simply sit down and do the economic calculus as to whether or not it’s smarter to pay the tax and take the small risk of medical expenses in excess of the tax accruing before the nexst open enrollment period, or spend much more money to buy the insurance - for which you are very likely to not need in the few months until the next enrollment period if you’re currently healthy.
It will almost certainly be a bad deal for young people. See my previous posts for details.
That’s a facile argument. For the purposes of analogy they are very much the same. The point being that if auto insurance companies HAD to take on any vehicle and HAD to repair any damage it might have when signed up, the cost of auto insurance would skyrocket. And if the auto insurance companies had to pay for routine maintenance and repairs, they would impose huge paperwork requirements on auto repairers to try to avoid unnecessary repair costs because both auto repairers and consumers would have an incentive to maintain their vehicles in like-new condition since a third-party is paying the costs. So the paperwork costs would increase and that would also drive up the societal cost of keeping and maintaining automobiles.
To continue to the auto analogy for a minute: Let’s say that a car could not be refused insurance for ‘pre-existing conditions’. The adverse selection here would be that people with damaged cars would be more likely to buy insurance, which would drive up the price to the point where people with pristine cars would see it as a bad deal. So the ratio of ‘good’ applicants to ‘bad’ starts to decrease, which further drives up costs pushing more cars ‘on the margin’ out of the market and making the average quality of insured cars even worse.
You can see how the insurance company might make an exception - insurance on a brand-new car might be lower, because of a guarantee of condition. Or auto insurance might be pooled if the insurance companies could come up with a way of building risk pools by random selection or close to it - say, by offering group policies to the employees of large companies, or group policies for unions or professional associations - any defined group where the average condition of the cars is likely to represent a random sample to avoid adverse selection.
That’s what today’s health insurance market looks like. Employer insurance is really about finding risk pools that approximate a random selection so that insurance can be efficiently priced. But along comes Obamacare, which guarantees similar costs in the public exchanges with no risk of being refused for pre-existing conditions… You can see where that might go - If the insurance companies or employers can figure out a way to offload the sickest employees onto the exchanges, they can save money. But that will drive up the cost of health insurance overall in the public exchanges until it reaches the point where people are no longer willing to leave their employer insurance programs. That new equilibrium is bound to drive up costs of the exchanges. Add to that the people who are currently uninsured who will have an incentive to avoid insurance until their medical expenses exceed the cost of insurance minus the penalty , and you add to the adverse selection problem and drive up the costs of the exchanges even more.
The only mechanism that was there to prevent this was the Employer Mandate (which also added billions of dollars per year in offsetting revenue). Now that it’s gone, Obamacare will be more expensive and adverse selection will be worse. I believe the CBO said that just in the first year the loss of the employer mandate will cost $12 billion dollars, and the annual cost will increase if it’s not reinstated.
And some do. However in many places refusing Medicare patients will reduce patient count, which increases the allocation of major fixed costs per visit, which means rates will have to be raised.
We’ve all seen the study showing major differences in treatment costs across providers in the same region. Unless there are significant quality differences (and I’ve seen no evidence of that) somebody is being inefficient. It is like Wendy’s charging three times as much for a burger than McDonald’s.
Which is clearly false in the cases I mentioned and many others.
First, most people don’t know about it. Second, there is a big difference between buying a product, and essentially donating money to the government to be used for a number of things you might disagree with. Third, people do in fact check the box. They collect about $300mm/year that way. Not a lot in terms of our budget, but more than nothing.
Have you ever bought something that was more expensive than reasonable replacement? Ever bought name brand clothing?
No, we are not. You have no choice whether to pay the fine/tax if you don’t want insurance. It’s not a matter of asking people to chip in out of the goodness of their heart.
Most people are actually not willing to take that risk if they can afford no to. More importantly, they will not take that risk if they have to pay a fine in order to roll the dice, AND be subject to much higher costs.
Or, they can’t afford it. Either way, Obamacare changes they calculus. Now, being uninsured is a risk that has no direct, certain costs. In the future it will. That matters.
It was the first state that came up. Regardless, the likelihood of paying those fines is fairly low, meaning the average person doesn’t end up paying that much. Either way, the difference between mandated car insurance, and mandated health insurance is that EVERYONE is forced to chip in financially for healthcare via insurance or fines. An uninsured driver only incurs cost if they get it an accident they don’t flee, or if they get pulled over.
And yet, the rate of uninsured drivers in CA is the same as it is in Texas. If fines and such are such an disincentive, why are the rates the same?
Or, they are doing it for both those reasons in addition to utilizing insurance for all the obvious reasons. If your thesis were correct, you would see a correlation between insurance rates and fines/fees. You don’t as far as I can tell. I would bet it correlates much more to cost of insurance. Given than health insurance rates will be lower because of Obamacare, everyone will be better off.
No you can’t since you have no idea what your medical expenses will be. Unless you can tell me how much treating a broken leg at your 3 closest hospitals costs for uninsured patients (and nearly every other common medical issue), you have no idea what the math looks like.
Show me the math. You keep saying that as if it’s self evident. Yes, the insurance company will likely pay out less than they take it, but that doesn’t mean a person would have the same costs. If you think I am wrong, show me a credible cite that takes that and the fine into account, and arrives at a conclusion that it’s a much worse deal for the average young person.
But the cost of oil changes and routine maintenance would go down. There would also be far more preventative care done to preempt larger problems which would probably be a net positive. Also, given the value of a cars is fairly low relative to a life, the “end of life costs”, which are huge for healthcare, would be very low for automobiles. You also have the benefit that cars have different, clearly defined values. Whereas we don’t hesitate to give a hobo tens of thousands of dollars in care, no person or auto insurance company would ever put tens of thousands of dollars into a 91 Civic with a bad motor. There are also far few chronic auto “diseases” that require routine, expensive care. Those are the primary drivers of health case costs, not the analogue to oil changes. That’s why your analogy is incredibly poor. I suspect you know that, so I am not sure why you choose to waste time pretending the comparison is valid.
Yes, insurance would cost more, but that doesn’t mean people in aggregate would spend more on their cars. The latter is the issue we are more worried about.
This is really stupid. If you tried to get your piece of shit car fixed, they would refuse, and (if need be) just give you the (low) value of your POS car. That value would also get lower and lower as more and more idiots tried to abuse the system since it’s based not only on what people would pay, but also cost of ownership, etc.
It’s not like a human being where a terribly unhealthy person is given lots of care to keep them alive. There is no car analogue to keeping a 90 year old alive with 10 expensive medications and specialist visits. There is no car ER where the mechanics have millions of dollars in equipment, cost 3 times a normal mechanic, must treat anyone who walks through the door, and must remain open for 24 hours a day.
They can do that now. But they don’t because it’s illegal. Either way, yes, covering pre-existing conditions costs more, but it is offset by covering more healthy people. This is honestly not that difficult to understand. More importantly, it’s a conservative idea. I just get who people of your ilk are now crying that it can’t work when you guys thought it up. Plus, the comparison is to the most probably alternative, which is the current system we have that doesn’t work at all to address the free rider problem.
Well, I have less doubt and a different opinion. Insurance underwriters plan for adverse selection.
On this list of leading causes of death in the US diabetes is seventh. Although I agree that the expenses of treatment lag diagnosis significantly (as it does for number six, Alzheimer’s) and that avoiding coverage for diabetes is expensive for the insurer, the delay has few immediate concerns for the individual.
The top five however, are not ones for which many would want delayed treatment - a diagnosis of heart disease, cancer, respiratory disease, stroke or an accident are not as amenable to treatment delays as diabetes.
What is a pre-existing condition for a car again? A dent from an accident? Even bans on excluding pre-existing conditions do not force insurance companies to pay for treatment before the coverage went into effect.
Or perhaps you have a pool of all drivers. Kind of like a mandate, eh?
Employer provided coverage does not consider pre-existing conditions, and for a good reason. First, large companies are self-insured. Second, a pre-existing condition in the large might cost more, but not necessarily for a while. When an employer chooses someone to hire, they would not want to effectively exclude the person for having a possibly inexpensive condition. (Mine costs about $50 a month - with the possibility of costing a lot if I went off my meds.) That is a good way of being noncompetitive in hiring.
Now that isn’t the sickest - but if a company started dumping employees after they get sick, they are going to have serious retention problem.
Clearly this is not the case for jobs which you can fill from the first ten people off the street, but those jobs don’t come with insurance anyway today. Those people are going to really benefit.
Employers are in the business of making money in their business, not minimizing insurance costs. If they were, they wouldn’t offer insurance in the first place. Or they could reduce their subsidies for it, and many public agencies are trying to do.
Private companies also do not charge differently based on health, except perhaps charging a surcharge for cigarette smoking. So they would have a hard time filtering by health. Also, there are medical records privacy issues.
As mentioned, delayed for a year is not gone. In 2008 this was a thing Hillary and Obama disagreed about. Hillary was in favor of mandates, and Hillary was right. I’m glad the law has them.
Even closer is pet insurance. It is relatively cheap, since most people will put an animal down before spending $10K on them. (Most, not all.) it is also why it is not all that common. You have an effective ceiling on costs.
You seem to think doctors will refuse Medicare if it means empty waiting rooms. It doesn’t.
It means the more popular doctors will stop taking Medicare. The less popular ones won’t.
Top doctors in NY won’t participate in any insurance at all. In general, the less you pay, the less participation you’ll have from doctors.
I was at a doctor a few months ago and I met a guy who had come from about 30 miles away for a GP appointment. He said doctors in his area don’t take Medicaid.
I hardly claimed the offices were going to be empty, just that fixed costs would have to be spread among fewer patients - unless the doctor is turning people away.
I’m aware of the situation in NY. My example actually is a shrink in La Jolla, so almost the same situation. As Tom Lehrer said, it is good to specialize in diseases of the rich.
And I’m not disputing that it is possible to set reimbursement too low. I’m willing to accept that Medicaid is often set too low, since it goes to people without a lot of power. The states refusing the expansion is evidence enough of that.
All I’m saying is that a practice with 20% Medicare patients who decides to refuse Medicare had better find 20% additional non-Medicare patients, or be in a situation where they are losing so much money from the Medicare patients that they come out ahead without them, even considering their contribution to fixed costs and their potential to have high margin diseases.
I’m sure many doctors are not all that good with numbers, and so won’t do this computation.
There are a lot of doctors in that situation. A lot. Medicare pays a lot less than private payers. And proposting to cut it further will change the equation.
[I don’t think many doctors drop Medicare patients en masse. They stop taking new ones, so they get to measure how it’s working out gradually.]
Part of the deal here is that American doctors are overpaid and are (as one might expect) keen to keep a tight grip on their perqs. We should long ago have done like pretty much every other country and led them to expect less. Given that we did not, we now need to slowly but surely wean them down to a more reasonable level of compensation, even if it takes decades.
I don’t know about that. A lot of these guys have massive amounts of debt from a decade in school. And they probably have much higher costs of operation than doctors in other countries, partly from people doing paperwork in the office, but partly from high malpractice insurance bills. And they also tend to put in some long hours.
I think I just saw a stat that most doctors would not recommend that their children become doctors.