Conservatives have said for a long time that the best way (or at least a damn good way) to lower health insurance premiums would be to allow insurance companies to sell across state lines. So let’s give them that. Let’s also remove the individual mandate, since that’s another important issue for them. We also get rid of any regulation that prevents them charging whatever they want – including the ones that protect those with preexisting conditions and older people. We’ll let the market do its magic thing.
The quid for that pro is to give progressives what many of them want – we allow anyone who wants the option of buying into Medicare. Medicare premiums for those not otherwise eligible for the program would be set to cover costs so that no government expenditures would be needed. HSAs could be used to pay Medicare premiums. Just as under the failed Senate bill, those who aren’t covered or are covered by inadequate insurance would face a six month waiting period to get onto Medicare, reducing the number of people who would elect no true coverage until they really need it.
Wouldn’t everyone be happy with this plan? (By “everyone” I mean Congresscritters.) Why wouldn’t it work?
One issue is that you don’t know where to set the premium because you don’t know who will sign up. If a lot of sick people sign up then you’ll have to set the premium higher to make it revenue neutral.
If I were a conservative, I’d support a similar, yet somewhat opposite, approach that I think (and I could be wrong) was proposed by Nevada. Everyone can buy into Medicare if they have no other insurance, and you’d pay no premium but would pay all the costs – at the Medicare reimbursement rate at Medicare-accepting facilities. So basically allowing people to use Medicare’s bargaining ability. Now, that would still be overly expensive for those with expensive diseases, but that don’t confront me if I’m suddenly an imaginary conservative. It would allow more transparency and “allow people to have more say in managing their own health” would be my line.
I’d like to think that health care experts could do a decent job of predicting what premiums need to be. Early years will be harder to predict than later years of course, but using data from usage of ACA plans bought on the exchanges could give a good estimate, no?
When in all of history have we ever not had that? Can you even think of any major insurance company that doesn’t operate in most of the 50 states?
Now, you could say that the states have no power to regulate how insurance companies operate within their borders, but surely no states rights conservative would approve of that.
Unless people are forced to buy health insurance many will not. People not having health insurance is the problem lawmakers are trying to solve.
The problem would be a bifurcated insurance market would lead to the sickest people being the ones who have to buy into Medicare. This would raise the price of Medicare buy in to a point where it is not feasible for poor people. Because of this no liberal would support it.
If it is was politically feasible it would be a massive improvement to the current system.
The ACA has reduced the number without insurance, but even if the GOP enforced the tax penalties I don’t think the number of uninsured would be zero. Without a true national health service I think we have to accept that some people will elect to go without insurance.
I’m not sure that there wouldn’t be enough relatively healthy people buying into Medicare to make premiums reasonable. This assumes that what the private sector plans provide is a better deal for healthy people – and I’m not convinced that’s necessarily true.
My husband and I are in our early 60s. The health insurance we get through his employer is a high-deductible plan for which total premiums are $18,000 per year. The deductible is $6,000. Total health care expense for us could be in excess of $24,000 per year (copay on amounts above deductible but less than max OOP.) Could we at our age do better opting into Medicare than buying individual policies when husband takes early retirement? I think so. I think we might do better with Medicare than COBRA.
More importantly, I think there’s a fair chance that if employees could get Medicare coverage for about the same as current expenses (including the employer-paid portion) that some organizations may decide to raise salaries enough to cover what they are currently paying and get out of providing health insurance. After all, health insurance is a big pain in the ass to employers.
It won’t work because you’re setting Medicare up to fail.
Your basic insurance company will disqualify everyone with anything that even smacks of risk, and cut premiums for the healthy remainder. This forces everyone who has EVER been treated any kind of heart condition, diabetes, birth defect, high blood pressure, mental illness, allergy, lingering effects from a car accident, pregnancy (remember when “ever been pregnant” was lumped under pre-existing conditions), or pretty much anything an insurance company might consider could have an aftereffect at some point during the rest of your life. to enroll in Medicare.
The result is that insurance companies ONLY insure the absolute cream of the crop (and only until the first time they need coverage) and everyone else gets shuffled on to Medicare. That will force Medicare to raise its premiums, which will make it so expensive that no person will voluntarily choose to go with Medicare.
How long would it take and how traumatic would it be to the healthcare industry if Medicare started implementing a universal healthcare system owned and run by the government? Paid for by taxes. Maybe those who bought their own insurance could deduct the cost of insurance but not receive full credit.
That’s a static number, I believe so over a steady population it will increase over time, no? A certain percentage of people with no pre-existing condition today will have one next year. Plus, the 27% covers only those who would be uninsurable in the individual market; it doesn’t include those who can readily get insurance at a higher but not impossible price.
Of course, people get older and get eligible for Medicare and are no longer included in this group, and children are born with no pre-existing condition, but it still seems that the number of people that insurance companies are willing to insure at reasonable rates will decrease over time. This is not a problem when they are covered by employer-sponsored plans, but this means only that insurance companies are willing to cover them at not-unreasonable rates.
Question: Most insurance companies provide group plans to employers and other organizations as well as individual policies. With the group plans they have no choice but to cover people with pre-existing conditions. (I don’t think explanation is needed, but if it is: Suppose Acme Manufacturing sponsors health insurance for its employees. Employee Lee Smith is in good health, but Smith’s spouse is battling cancer and their child has Type 1 diabetes. Employee Chris Jones is also married with one child, but none of the Jones family has a pre-existing condition. Don’t the Jones and the Smiths pay the same premiums? Isn’t the insurance company pretty much required to operate this way?) OK, so given that the insurance company must provide coverage to people with pre-existing conditions in its group coverage plans, and can deny coverage to those with such conditions in its individual plans, are premiums lower for the individual coverage group? If not, why not?
If I’m reading this right, companies are bound by individual state regulations. The GOP wants to eliminate that.
As an example, California limits pre-existing exclusions to one year. Other states may allow exclusions for an unlimited time.
Guess which one insurance companies prefer?
ETA: bolded: Look how well that worked for credit card interest.
I have never understood how cross-state policies are supposed to address healthcare costs - and how it squares with states rights. Several states allow cross-state policies but it just isn’t happening.
The big problem with cross-state policies is that the insurance companies currently negotiate with healthcare providers for the best prices. Narrow networks come from policies that have negotiated prices with a small number of providers.
So, for multi-state policies to work, they have to negotiate with many, many more providers. That gets complicated and expensive.
Alternatives would be insurers paying whatever is asked or establishing standard prices (like other countries and Medicare) - IMO, neither are very likely.
Which creates the issue with network and out-of-network providers. A while back, they wanted to farm out our department to a Florida-based company. We’d have to use the company’s health care system, but the nearest network provider was over 50 miles away (and I live near three small cities).
So the coverage here would all be out-of-network, with the accompanying higher costs.
The way it would work to lower prices is that some state would have fewer mandated coverages than other states and the policies issued in this state would be cheaper because they cover less. Since some of the mandated coverages cover things which are not insurable this savings could be significant and attract many new customers. The insurance company who wanted to enter a new state would just have to negotiate with providers for a fee schedule.
First off, there’s nothing magic about the marketplace. That can already be seen, in the competitions between various national and international companies, in other areas of endeavor. Is phone service CHEAPER because there is competition between providers? Nope. It’s more expensive than it has ever been. The way the providers compete, isn’t by delivering comprehensive service for a low price, they compete by offering temporary low prices in exchange for long term high prices, and by playing tricks with the rules of sub charges, such that there is no way to accurately compare pricing.
Next, if there were significant savings to be found by allowing competition between the states, there would already be low prices, because there is plenty of competition WITHIN most states, and has been for decades. It hasn’t helped, because there IS no way to have market-force-style competition, when it comes to providing in the moment care for the sick and injured.
Next, most POLITICIAN “conservatives” don’t call for these things because they actually believe that they will fix anything. They call for them as a cover story for the fact that they want to continue to say NO to treating poor people, while sidestepping responsibility for doing so. They already know that their older proposal to fix everything by capping malpractice penalties was a lie, because their own experts told them flat out, that that would AT BEST result in 9% reduction in health costs, and even that assumed that all savings would immediately be passed on to consumers (which almost never happens). That’s why during the several times they could have pushed it through, they chose not to bother. They just waited until they were out of power again, and started chattering about it again.
None of what you propose, addresses the actual root causes of high priced medical care, so it would really just be another distraction in the debate. As long as the long-established three way link between the AMA, the insurance companies, and the primary medical providers remains intact, nothing will improve.
By the way, "Medicare premiums for those not otherwise eligible for the program would be set to cover costs so that no government expenditures would be needed, " makes zero sense. Medicare has a government expenditure involved with it by definition. If you mean that you’ll allow people to buy insurance CALLED Medicaid as an option, and charge them as much or more than insurance NOT called Medicaid, you’re talking complete nonsense.
Competition within states does not reduce prices as much as competition between states because all insurance companies within a state are legally obliged to offer the same benefits thus there is not much difference between plans. Furthermore there has been increasingly less competition within states as healthcare networks consolidate to negotiate prices versus insurance companies and insurance companies try to get bigger to negotiate price versus insurance companies.
However, hospitals and physician groups, on average, lose money on 65% of their Medicare patients. So the bargaining ability is to see if hospitals want to lose money on you.
Medicare costs about 10X more than it was estimated to cost, and is scheduled to run out of money altogether in 2028. And, as mentioned above, doctors lose money, on average, treating Medicare patients. Predictions of premiums should take that into account.
Obamacare was supposed to save the average family $2500 a year, but premiums have increased by over 60% since it began to be implemented. Politicians will either have to be honest about whatever they are proposing, and lose, or present rosy but unrealistic scenarios, and then people are disappointed.