If people were rational economic actors, they’d happily pay the couple of hundred bucks for a preventative visit and stuff not covered by the catastrophic coverage, and budget for it. But people being people, they are more likely to skip it, especially if money were tight.
I’ve looked up a bunch of catastrophic plans for another thread. It seemed to me that in most years you pay a reasonably large amount of money and get nothing back. If your costs are below the threshold, you pay lots to the insurance, lots to the doctor, and still get nothing back. You can get charged enough so that the people needing to save money this way would be in trouble even without the insurance kicking in.
And speaking of the free market, these plans weren’t even mentioned until the price of health care exploded, so the market has spoken.
And speaking of the free market, who in a truly free market would let you cash in on your coverage for more than one year? And who would insure you when they dropped you?
The problem with insurance companies is that they’re terribly hard to give incentives to “do the right thing” to. Every insurance company can improve their profitability by identifying one of their clients who is sicker than average and cancelling their policy. Even if any particular time they are too “good” or worried about bad publicity to do that, the temptation always exists.
It’s kind of like how in communist systems, any worker can improve their lifestyle by working a little less. They might have a work ethic or patriotism or whatever to compel them to work harder anyway, but the temptation is always there as a downward pressure on the amount of work being done.
We have a high deductible plan for this reason. But we can afford $10,000 in deductibles a year in addition to health insurance. A lot of people can’t. They pay the insurance because a year worth of premiums is less than the possible deductible.
I’d like to throw out too that “donut-hole” plans, that act like reimbursement accounts before the deductable even kicks in are wildly popular too. Medicare D is the most notable example but my company offers a number of health plans like that too; your first $500-$1000 of expenses each year are covered, either just by not having the deductable kick in, or having a seperate reimbursement account. These kinds of plans are especially popular among younger people, whereas older people tend to buy more traditionally structured polcies. It’s human nature, especially with the younger, instant gratification types to want to see something from your money and the opportunity just isn’t there for other kinds of insurance. Granted the oppurtunit for bias is huge, but less than 1 in 50 people of those I deal with buy 10K deductable policies, and I’ve yet to see one that was under middle-age.
IIRC the total overhead on health insurance runs about 30% (this overhead includes much more than profit), so $70 out of every $100 makes its way to the provider – but the provider then has to spend part of that $70 on its interaction with the insurer. :smack: And, in addition to these overheads, we might add in the loss to the patient of his time and emotional stamina if he needs to argue with insurer.
So, to eliminate the useless middleman, at least for routine services, would save huge sums. But, as Little Nemo and others point out, that would bring its own problems. The solution of course is well-known to almost all the developed world … except in the one country which prides itself so much on “Freedom” that it no longer knows what freedom is.
The U.S. uninsured also pay higher prices for filling simple prescriptions (where, unlike with hospitals, no “compassionate” discount will be offered). Almost twenty years ago, when helping the uninsured was the alleged priority I advocated a trivial measure:
Dictate that the uninsured receive the same favored-customer price paid by insurance companies.
This proposal was, of course, only laughed at. “Freedom” in America isn’t about useful populist freedoms, it’s about the freedom of corporations to make profits.
(PS: Insurance is annoying in any event and I’ve accepted OP’s premise: I don’t have health insurance in Thailand. I go where I want to for care and pay the bills myself. If I end up needing a heart bypass I’ll pay for it out of savings: there are excellent facilities in Bangkok which charge a fraction of U.S. prices. I might not want to afford a heart bypass at U.S. prices: that’s one reason I don’t visit U.S. and advise other retirees to also pick a different country.)
5% of the population uses 50% of the health care spending, the other 95% use the other 50%.
20% of people use 80% of all health care spending, the other 80% use the other 20%.
So high deductible plans don’t really matter because it is the people with serious chronic conditions or serious trauma who end up costing the most. People who are relatively healthy (like you and your family) do not cost more.
Also higher copays and deductibles make people avoid both necessary and unnecessary care. the end result is pretty much moot (I believe) because people put off unneeded care, but they also avoid necessary care that just becomes more expensive down the road. So health care costs ‘in general’ do not go down.
I have seen pilot programs directed at the 1% and 5% who use the most health care spending. They took place in places like Jersey and Chicago. What they found was that more intensive care (visits from doctors, nurses and health aides), more intensive follow up, etc made costs go down. It costs more up front, but costs less down the road.
So it isn’t as easy as high deductible plans. People who are barely making ends meet will not spend 5k a year on tests if they don’t 100% think they need them. This can cause the illness to become way more expensive. High deductible plans work for healthy people, but for sick people you want as few barriers to care as possible so conditions can be managed and avoid becoming more serious.
Also, American health insurance is a scam. But a lot of european countries have private health insurance plans (either wholly or in part) which do not seem like scams. I do not hear of Germans, French, Swiss, etc people having to deal with the crap we deal with in America with our private insurers.
I agree with the OP. The very nature of the insurance market fails when you KNOW that you will need to make a claim.
I had catastrophic insurance a few years ago for my family with an HSA. It cost $100 per month and everything up to $10k I had to pay for. The insurance covered above that. However, there’s more. You know how a doctor will usually charge $200 for an office visit, but your insurance only pays $40 and he accepts that? You get that benefit under a catastrophic plan, so you only owe $40.
Even with paying out of pocket for doctor visits and prescriptions, I banked a lot of coin over those three years. If it was consistent and everyone was enrolled, it would be a great free market model for society: You insure against the unknown, but pay out of pocket for routine stuff.
I think the 30% figure commonly tossed around for overhead is only for for-profit HMOs. I’m not sure I’m allowed to say exactly what the overhead for my company (a nonprofit you’ve heard of which HMOs are only a small and declining part of our business), but it’s less than half that, albeit several times Medicare. Some of the our overhead is due to disease prevention efforts too, from RNs to help people with complex medical conditions improve their outcomes- good for them and us, and public service type advertising “get on your damn bike more! and eat your broccoli”, again to benefit both them an us. This shows up as overhead even though it reduces medical spending, (at least in theory, I’m not sure if there’s any study that says such).
HMOs are on there way out. Consumers hate them, they’ve utterly failed to control costs, and they’re extremely expensive to administer. Tiered plans and high deductables are the new way to try to get consumers to go to cheaper providers.
Clearly, mileage varies significantly. The only catastrophic plan (high deductible, high out of paocket, plus co-pay and co-insurance) I could get was $700 per month.
Well, the HSA/HDHP model is still subject to the same problem as the general insurance market: individual purchasers don’t have the buying power to force lower rates.
For what it’s worth, HSA/HDHPs will almost entirely result in the phasing out of the traditional HMO/PPO models in the employer-provided insurance market. The cost to employers is reduced, and the cost to most employees is reduced in the normal format, where the employer contributes a portion of the deductible amount to the employee’s HSA.
It works like this: young, healthy employees opt for HSAs - especially when employers offer them for the first time, because they know there’s no guarantee that the employer will continue to contribute a portion of the HSA money if they enroll later on. Older employees remain in traditional plans, because they know they’ll incur some amount of medical expense in any given year. Eventually, all the profitable employees are in the HSA/HDHP plan, and the expensive ones are in the HMO/PPO. Thus, rates for the HMO/PPO covered lives go up, and the employer shifts the additional cost to the employees.
Eventually, the older employees can no longer afford the HMO/PPO rates and are essentially forced into the HSA/HDHP, and the employer drops the traditional plans entirely.
First, $800 a month for six people ($133.33 each) is cheap considering serious illness or
injury could easily cost over $100,000, and considering US per capita medical expenses
were $7,538 in 2008.
Second, health insurance with a $5,000 copayment is availble in NC where I live, and I
expect it is available elsewhere. I was paying over $700 per month under a company
retiree plan with something like a $500/80% copay up to ~$2,500 out of pocket per year.
My $5,000 copay policy is only $300 per month.
I’ve found health costs to have skyrocketed here in the past decade. In 2001, I had a salivary gland removed at Samitivej Hospital, and the whole thing including two-night stay was less than US$1000. But in 2008, I had two shoulder surgeries, and if I’d had them at BNH Hospital, each would have run close to $10,000. The same doctor did them for me at Chulalongkorn Hospital for “only” about $3000 each – Chula is the main teaching hospital for those of you who don’t know, and many if not most of the private-hospital doctors are also based there. Insurance would not have covered the BNH price; it did cover the Chula price. I knew an Englishman who died in Bumrungrad Hospital after suffering a heart attack. Efforts to revive him failed, and his hospital bill came to about $500,000 – that’s dollars, not baht. The last I heard, they were refusing to release the body until his family in England ponied up the money, and they didn’t have it.
The wife and I carry health insurance here and are glad of it.
Ouch. :smack: When I needed simple tests done, Chula put me on a waiting list of several months – but Bangkok Hospital did the test the same day for only slightly more than the Chula price. But that was more than a decade ago, and I realize prices are skyrocketing. Prices remain low (at least for now) at Srisawan (a not-too-bad regional hospital), but I don’t think its quality approaches Bangkok’s better hospitals.
Sam, can you help with questions to which I’ve never gotten answers? How do prices for Thai nationals and foreigners compare at hospitals like Bumrungrad and Bangkok? Is a “yellow book” (foreigner’s house registration) sufficient to get the Thai price?
There are folks who are VERY healthy but have chronic obscure conditions for which they actually NEED to be followed. I very rarely see my GP. But I was born with a genetic condtion that befuddled generations of Harvard Med School students.
I think the OP is not understanding the point of insurance - being part of a risk pool. You are paying your monthly premium NOT so it will pay for YOUR health care needs right now. You are paying for someone else in the risk pool who is in need of care right NOW. The larger the pool, the more the risk is spread out, and the lower the monthly cost per member of that pool.
Health insurance companies in our current system manage those risk pools by negotiating (as stated upthread) for physician, hospital, and pharmacy networks. Essentially, when you purchase health insurance, you are buying access to the risk pool that insurer manages and the networks that they have set up, and your dollars are going to pay for other people in the same pool that are accessing care today.
When you have something going on it will be your turn to access the resources available to the pool, and it will be someone else’s monthly premiums that pay for it all at that time. Insurers are encouraged to keep people healthy by providing preventative care and lower negotiated rates for members of the pool when they access the network. Healthy people paying their monthy health insurance bills help pay for the sick people in the pool. I hope that is making sense.
And I had to wait several months to get my shoulder surgeries done at Chula, but the upside was I didn’t have to pay $10,000, or even the $3000 each one finally did cost.
I believe there is two-tiered pricing at the private hospitals. Another Englishman I know told a believable tale of being mistakenly quoted the lower Thai price one time. Can’t remember which hospital that was except that it was private. As far as I know, the house registration won’t make much difference.
Personally, I dislike Bumrungrad. I’ve had bad experiences there with arrogant doctors and know other people who have had the same. There’s still a US$1-million reward on the books from some rich New Yorker who will pay it to anyone who can tell him ther eal story behind his son’s death there. True, the son was a drug-addled good-for-nothing, but there still seemed to be something mysterious about the death. Bumrungrad clammed up completely, thus the reward offer. I’m sure you can find it by googling. Myself, I stick with Samitivej, BNH and Bangkok Christian.
Missed the edit window. If it had been a life-threatening emergency, I would have been bumped up in the queue. My shoulder ailments were painful but still such that others had to go first.