# What realistically happens as health care becomes unaffordable for all but the rich (in the US) **URL:** \ **Category:** Great Debates\ **Created:** [August 2, 2018, 7:04pm UTC](https://boards.straightdope.com/t/what-realistically-happens-as-health-care-becomes-unaffordable-for-all-but-the-rich-in-the-us/818997 "2018-08-02T19:04:13Z")\ **Posts on this page:** 20\ **Page:** 5
**Author:** ![MattDHat](https://avatars.discourse-cdn.com/v4/letter/m/c89c15/32.png) [@MattDHat](https://boards.straightdope.com/u/MattDHat)\ **Post date:** [August 7, 2018, 7:44pm UTC](https://boards.straightdope.com/t/what-realistically-happens-as-health-care-becomes-unaffordable-for-all-but-the-rich-in-the-us/818997/81 "2018-08-07T19:44:25Z")
> [@Wesley\_Clark](#): > > Thank you for coming out of lurker mode to post, that was very informative. I do have a few questions though. > > 1. I liked your response, but I feel like it didn’t really address why we spend 18% of GDP on health care while other wealthy nations spend 8-12%, or what we can do to reduce our spending to more reasonable and sustainable levels. > > Opinion: 3 major issues- a) unlike almost every other country, our private insurance companies are largely unregulated. In Germany, they are required to be non-profit. In Japan, also NP,every company has to offer the same benefits, charge the same premiums, and the costs of procedures are regulated by the government. > > b)we have multiple parallel HC systems in the US-For workers under 65, the US is a Bismarck model. Employer and employee share the cost of premiums, insurer then picks up most of cost, with employee paying co-pay or co-insurance. But insurance > can (and most assuredly does) make a profit, and charges are argued between providers and insurers. > • For Native Americans, active military, or veterans, we have a > Beveridge model, with essentially no costs and set charges. > • For those over 65, we’ve got a NHI system- Medicare- but providers can charge as much as they want. What they get paid is up for debate- often lengthy debate. > • And for those still uninsured, or, “UNDERINSURED” we’re an > OOP (out of pocket)poor nation, as it is for about 200 of the countries in the world. the 40-50 other nations with actual HC systems use ONE model for all citizens except their 1%, who do what 1%ers do. > > 1. our MDs are paid much more, even when corrected for cost of living, and see fewer patients. > > Behind all of this is the massive amount of merger activity in private HC insurance, which results in corporate behemoths that can use their market power to raise prices. Which started in the 80s. > > 1. As far as lifestyle problems, yes the US has a high obesity rate. But really not much higher than places like Australia. But more than that, the US has a very low smoking rate. > > Smoking causes lung cancer.Morbid obesity causes diabetes, coronary artery disease, high blood pressure, stroke, pulmonary embolism, end stage kidney disease,can contribute to COPD, etc. You get lung cancer, generally, you die. Obesity begets long term, high cost chronic conditions that linger for decades, require long-term treatment, and generate enormous costs per capita as compared to smoking. > > 1. I would support a system like the UK NICE program, which I think says any therapy that doesn’t provide 1 year of quality adjusted life years for every 35,000 pounds isn’t covered. Do you know what a reasonable cutoff would be for the US system? > No, I can’t. I mean, I have some ideas, but the reality is, if you’ve seen one HC system, you’ve seen one health care system. The system has to reflect the values of the population, or things get ugly. Each country has a HC system that reflects that countries’ values and history, politics and economics. > • In Canada, everyone waits. But everyone waits about the same > length of time. It’s a Canadian thing. > • In England, no one pays a cent at the point of care. It’s a Labour > thing. > • English babies are born at home- Japanese babies are born in the > hospital and stay there 10 days or more. US babies (& mom) are > thrown from the trailer as it goes by…… > • In Finland, each expectant mother, no matter her SEC, receives a > “baby box” from government with a first set of clothes, blankets, > diapers, formula, and the sturdy box that holds it all is specially > designed to serve as a bassinet- a family heirloom, and a common, > shared societal experience for all. > What we as a society are willing to determine as the value of a human lif3e is a debate not yet settled. > > 2. As far as rationing, I believe in the US we get far more care in certain areas. More prescriptions, more surgeries, more scans, etc compared to other OECD nations. Do we have anything to show for that? It was my understanding from Atul Gawande when comparing medicare in high vs low service areas, the outcomes were about the same. People were buying care that didn’t help much. > > Yep. Agree 100% But the question was, what will happen when it breaks down? HC rationing is a reality in Medicaid- and is moving towards Medicare. > > 1. Because so many powerful interests like our system, is any kind of reform that reduces prices and unnecessary procedures possible either via the public sector or the private sector? Personally I’d love to see a company like walmart try to address health care. They would apply a level of efficiency and transparency that is lacking. But I don’t know if I see politicians ever allowing that to happen, let alone single payer. The PPACA (“obamacare”) was an attempt to reform the insurance industry, more than anything else, with an enhanced risk sharing pool through the individual mandate. Make a law to make all insurance have to either be non-profit, or only be allowed a certain % profit. And yes, Good luck with that. ---
**Author:** ![survinga](https://avatars.discourse-cdn.com/v4/letter/s/cab0a1/32.png) [@survinga](https://boards.straightdope.com/u/survinga)\ **Post date:** [August 8, 2018, 12:58am UTC](https://boards.straightdope.com/t/what-realistically-happens-as-health-care-becomes-unaffordable-for-all-but-the-rich-in-the-us/818997/82 "2018-08-08T00:58:07Z")
> [@Northern\_Piper](#): > > Just to be clear, I’m speaking specifically of your category of “Public insurer, private provider” and speaking in the Canadian context. I just don’t see why it should be considered an insurance system. > > Similarly, your category of “public insurer, public provider”, citing the NHS in the UK is even less of an insurance model. It’s a straight-up taxpayer funded service, with some of the doctors acting as independent contractors, but some on the government payroll. Why is that described as “insurance”? > > My basic point is that calling it “insurance” is misleading (not suggesting that you’re trying to mislead; but the term brings with it a certain paradigm). Single-payer or government provided healthcare is a type of social insurance. Not misleading in the least to say “insurance” in this context. so·cial in·sur·ance ˈsōSHəl inˈSHo͝orəns/ noun a system of compulsory contribution to provide government assistance in sickness, unemployment, etc. ---
**Author:** ![Isamu](https://avatars.discourse-cdn.com/v4/letter/i/7c8e57/32.png) [@Isamu](https://boards.straightdope.com/u/Isamu)\ **Post date:** [August 8, 2018, 1:16am UTC](https://boards.straightdope.com/t/what-realistically-happens-as-health-care-becomes-unaffordable-for-all-but-the-rich-in-the-us/818997/83 "2018-08-08T01:16:10Z")
> [@survinga](#): > > Three out of four Americans are pleased with their own healthcare. Of course they are. Until they go bankrupt. No one really thinks they will face end-of-life or retirement-age bankruptcy due to medical costs but about a million people do per year in the USA. Conversely I’ve never heard of a single person being bankrupted by medical costs in any place I’ve lived. ---
**Author:** ![Wesley\_Clark](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/wesley_clark/32/20581_2.png) [@Wesley\_Clark](https://boards.straightdope.com/u/Wesley_Clark)\ **Post date:** [August 8, 2018, 2:21am UTC](https://boards.straightdope.com/t/what-realistically-happens-as-health-care-becomes-unaffordable-for-all-but-the-rich-in-the-us/818997/84 "2018-08-08T02:21:14Z")
> [@Isamu](#): > > Of course they are. Until they go bankrupt. No one really thinks they will face end-of-life or retirement-age bankruptcy due to medical costs but about a million people do per year in the USA. Conversely I’ve never heard of a single person being bankrupted by medical costs in any place I’ve lived. Agreed, People are pleased with their healthcare because they don’t need much of it. Most people need very little healthcare for most of their lives. But even putting that aside, because health care is so expensive in America, insurance to cover it is becoming unsustainable. As a male in my 30s, an insurance plan with a $6000+ deductible is almost $400/month. If rates go up 10% a year, it’ll be $800 a month by 2025. Then $1600/month by 2032. Granted inflation will eat into some of that, but not all of it. And a 10% annual rate increase is actually low, some insurers jack up rates 20%+ a year. Who knows how much it costs for someone who is 61. The system can’t be sustained. ---
**Author:** ![jasg](https://avatars.discourse-cdn.com/v4/letter/j/f0a364/32.png) [@jasg](https://boards.straightdope.com/u/jasg)\ **Post date:** [August 8, 2018, 2:47am UTC](https://boards.straightdope.com/t/what-realistically-happens-as-health-care-becomes-unaffordable-for-all-but-the-rich-in-the-us/818997/85 "2018-08-08T02:47:30Z")
> [@Wesley\_Clark](#): > > Who knows how much it costs for someone who is 61. > > The system can’t be sustained. In the Seattle suburbs, a 61 year old non-smoker will pay Premera BC $904/month for a Bronze plan with an OOP max of $7350. Silver and Gold plans are $1135 & $1334/month. Deductibles are $6350, $4500 and $1500. So, $18,210/year - minimum. ---
**Author:** ![Northern\_Piper](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/northern_piper/32/5304_2.png) [@Northern\_Piper](https://boards.straightdope.com/u/Northern_Piper)\ **Post date:** [August 8, 2018, 3:05am UTC](https://boards.straightdope.com/t/what-realistically-happens-as-health-care-becomes-unaffordable-for-all-but-the-rich-in-the-us/818997/86 "2018-08-08T03:05:43Z")
> [@survinga](#): > > Single-payer or government provided healthcare is a type of social insurance. Not misleading in the least to say “insurance” in this context. > > so·cial in·sur·ance > > sSHl inSHoorns/ > > noun > > a system of compulsory contribution to provide government assistance in sickness, unemployment, etc. By that test, police, fire and. education are insurance. I don’t pay any compulsory contribution for any of them, other than general taxes. Same for health care. I don’t pay any compulsory contribution for health care, other than general taxes, and I get health care. That’s different from Employment Insurance and Canada Pension Plan. Those are contribution based. If I don’t contribute to those plans, I don’t get any insurance or pension. ---
**Author:** ![Northern\_Piper](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/northern_piper/32/5304_2.png) [@Northern\_Piper](https://boards.straightdope.com/u/Northern_Piper)\ **Post date:** [August 8, 2018, 3:25am UTC](https://boards.straightdope.com/t/what-realistically-happens-as-health-care-becomes-unaffordable-for-all-but-the-rich-in-the-us/818997/87 "2018-08-08T03:25:29Z")
Plus, you don’t need to make any contribution at all to get health care in our system. If I’m working poor and never make enough income to pay taxes, I still get exactly the same health care as the Canadian Warren Buffett would get. A family with 50,000 income and one kid gets exactly the same coverage for their kid as a family with 50,000 income and seven kids. There’s a reason the NHS in Britain is called the National Health **Service** , not the National Health Insurance. It’s a government service that everyone is entitled to, regardless of income and taxes paid. Again, that’s different from CPP and EI which are based on compulsory contributions. ---
**Author:** ![I\_Love\_Me\_Vol.I](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/i_love_me_vol.i/32/521_2.png) [@I\_Love\_Me\_Vol.I](https://boards.straightdope.com/u/I_Love_Me_Vol.I)\ **Post date:** [August 8, 2018, 3:34am UTC](https://boards.straightdope.com/t/what-realistically-happens-as-health-care-becomes-unaffordable-for-all-but-the-rich-in-the-us/818997/88 "2018-08-08T03:34:12Z")
> [@Lemur866](#): > > Today it seems impossible that we’ll rationalize the health care industry. But eventually the system will get so intolerable that the plutocrats will demand reform. Every corporation has to pay huge amounts for employee health care plans, when that amount increases and increases eventually the megacorporations are going to get tired of just writing higher and higher checks, and they’re going to demand a government takeover. This could be key: if what you say is correct about the plutocrats eventually demanding nationalized health care then even they should recognize that it would be a hell of a lot cheaper to do that now with today’s medical costs (high as they are) than in 40 years when medical costs are 20, 30, 40% higher. Why aren’t they asking for it now in order to save themselves and everybody else gobs of money? ---
**Author:** ![Wesley\_Clark](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/wesley_clark/32/20581_2.png) [@Wesley\_Clark](https://boards.straightdope.com/u/Wesley_Clark)\ **Post date:** [August 8, 2018, 4:32am UTC](https://boards.straightdope.com/t/what-realistically-happens-as-health-care-becomes-unaffordable-for-all-but-the-rich-in-the-us/818997/89 "2018-08-08T04:32:32Z")
> [@Northern\_Piper](#): > > By that test, police, fire and. education are insurance. I don’t pay any compulsory contribution for any of them, other than general taxes. Same for health care. I don’t pay any compulsory contribution for health care, other than general taxes, and I get health care. > > That’s different from Employment Insurance and Canada Pension Plan. Those are contribution based. If I don’t contribute to those plans, I don’t get any insurance or pension. In America medicaid is paid for by general taxes, but medicare is paid for by a special FICA tax of 2.9% split between employers and employees. Either way, I guess I don’t see the different in which word you use to describe services vs insurance. Medicare and medicaid in the US are single payer plans. They have a public source of revenue. But no I don’t consider the police, fire department, schools, etc to be insurance. However long before we had public fire departments people had to buy private insurance for fire protection. If you didn’t have private fire department insurance you were SOL. But nobody refers to the public fire department as insurance. It is just the fire department, and you get as many services from them as you need, funded via tax revenue. So I think I get what you are saying, I just don’t know if the semantics really affect the discussion. The issue is more are the funds that pay for health care public or private. In Canada they are public. In the Netherlands they are private. Both Canada and the Netherlands have working health care systems where health care is affordable, you can’t have care denied or be kicked out of the system because you didn’t disclose that you had acne at 17 on some form. > [@jasg](#): > > In the Seattle suburbs, a 61 year old non-smoker will pay Premera BC $904/month for a Bronze plan with an OOP max of $7350. Silver and Gold plans are $1135 & $1334/month. Deductibles are $6350, $4500 and $1500. > > So, $18,210/year - minimum. And ironically, annual medicare spending for a 65 year old is under $6000. Granted this is just the medicare part and doesn’t include private spending (I believe medicare generally covers 2/3 of medical costs in retirement). Also those numbers are from 2011, I’m sure they’re closer to 8-9k for a 65 year old now, which may mean average medical costs for a 65 year old are now closer to 12-14k a year. But even so, that would mean it is cheaper, possibly much cheaper, to cover health care under medicare for a 65 year old than to cover it privately for a 61 year old. > **[The Rising Cost of Living Longer: Analysis of Medicare Spending by Age for...](https://www.kff.org/medicare/report/the-rising-cost-of-living-longer-analysis-of-medicare-spending-by-age-for-beneficiaries-in-traditional-medicare/)** > > This analysis provides a detailed look at per person Medicare spending on the nearly 30 million beneficiaries over age 65 who are enrolled in the traditional Medicare program. Among the key findings of the report is that per person spending rises... ---
**Author:** ![I\_Love\_Me\_Vol.I](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/i_love_me_vol.i/32/521_2.png) [@I\_Love\_Me\_Vol.I](https://boards.straightdope.com/u/I_Love_Me_Vol.I)\ **Post date:** [August 8, 2018, 10:31am UTC](https://boards.straightdope.com/t/what-realistically-happens-as-health-care-becomes-unaffordable-for-all-but-the-rich-in-the-us/818997/90 "2018-08-08T10:31:42Z")
> [@Wesley\_Clark](#): > > But that is a public insurer. In the US we pay taxes to fund medicare and medicaid, and then the funds to pay for health care for those recipients comes from tax revenue. It seems different when everyone in the country is covered. With U.S. Medicare and Medicaid there are select pools–like with an insurance company. ---
**Author:** ![RandomNerd](https://avatars.discourse-cdn.com/v4/letter/r/f04885/32.png) [@RandomNerd](https://boards.straightdope.com/u/RandomNerd)\ **Post date:** [August 8, 2018, 12:02pm UTC](https://boards.straightdope.com/t/what-realistically-happens-as-health-care-becomes-unaffordable-for-all-but-the-rich-in-the-us/818997/91 "2018-08-08T12:02:30Z")
Prices spiral up faster. As you price out the lower classes the volume of business to fund shared assets like hospitals, expensive equipment, and doctors decreases. To maintain profitability the prices increase to the point the market no longer functions even for the wealthy and a competitor (possibly single payer) comes along and wipes them out. There is a possibility this already occurs given our backwards rationing system we already have in place (the insurance industry, the true death panels based on wealth). You see some statements that they need to charge more and more to support various new and existing machines and research, but technology and scale should generally decrease the price of common existing staples. It does not in our economy even though generics and common sense in other countries has seen some prices decrease over time. The rate of medical inflation has no basis in economics, it is purely a function of the captive markets we have made that defy forces of competiton. It is arguable we would be better off using less modern technology at higher scale and lower price point and probably get better outcomes than the premium health care system we have now. We justify high prices with ‘research’ as if you are not being prescribed a 40 year old medicine at prices several times the cost in other countries. The system will continue until it destroys itself, it is well on the way. When the market turns on the average employee with insurance is when it will accelerate into failure. ---
**Author:** ![Fear\_Itself](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/fear_itself/32/19637_2.png) [@Fear\_Itself](https://boards.straightdope.com/u/Fear_Itself)\ **Post date:** [August 8, 2018, 2:01pm UTC](https://boards.straightdope.com/t/what-realistically-happens-as-health-care-becomes-unaffordable-for-all-but-the-rich-in-the-us/818997/92 "2018-08-08T14:01:35Z")
> [@MattDHat](#): > > The PPACA (“obamacare”) was an attempt to reform the insurance industry, more than anything else, with an enhanced risk sharing pool through the individual mandate. Make a law to make all insurance have to either be non-profit, or only be allowed a certain % profit. And yes, Good luck with that. And yet it insures almost [9 million people](https://www.cnbc.com/2017/12/21/government-reveals-final-obamacare-enrollment-numbers-for-2017.html) in 2018, and insurers are [expanding the number of states](https://www.cnn.com/2018/07/06/politics/obamacare-insurers/index.html) they offer plans in. Despite the best efforts of the Trump administration to kill it, Obamacare continues to succeed. ---
**Author:** ![survinga](https://avatars.discourse-cdn.com/v4/letter/s/cab0a1/32.png) [@survinga](https://boards.straightdope.com/u/survinga)\ **Post date:** [August 8, 2018, 3:10pm UTC](https://boards.straightdope.com/t/what-realistically-happens-as-health-care-becomes-unaffordable-for-all-but-the-rich-in-the-us/818997/93 "2018-08-08T15:10:40Z")
> [@Northern\_Piper](#): > > By that test, police, fire and. education are insurance. I don’t pay any compulsory contribution for any of them, other than general taxes. Same for health care. I don’t pay any compulsory contribution for health care, other than general taxes, and I get health care. > > That’s different from Employment Insurance and Canada Pension Plan. Those are contribution based. If I don’t contribute to those plans, I don’t get any insurance or pension. General taxes are compulsory contributions. I understand that 6 year old kids don’t have to pay taxes for NHS. But the funding for the NHS is compulsory, and contributions via taxes are used. It’s insurance of the social type. That’s just what it is. Not sure why this would be a sticking point. NHS meets the social insurance definition to a T. And social insurance is “insurance”. ---
**Author:** ![Isamu](https://avatars.discourse-cdn.com/v4/letter/i/7c8e57/32.png) [@Isamu](https://boards.straightdope.com/u/Isamu)\ **Post date:** [August 8, 2018, 3:49pm UTC](https://boards.straightdope.com/t/what-realistically-happens-as-health-care-becomes-unaffordable-for-all-but-the-rich-in-the-us/818997/94 "2018-08-08T15:49:04Z")
> [@survinga](#): > > It’s insurance of the social type. That’s just what it is. Not sure why this would be a sticking point. NHS meets the social insurance definition to a T. And social insurance is “insurance”. I have no idea what any of this means. Please elaborate re “social type”. ---
**Author:** ![MattDHat](https://avatars.discourse-cdn.com/v4/letter/m/c89c15/32.png) [@MattDHat](https://boards.straightdope.com/u/MattDHat)\ **Post date:** [August 8, 2018, 4:54pm UTC](https://boards.straightdope.com/t/what-realistically-happens-as-health-care-becomes-unaffordable-for-all-but-the-rich-in-the-us/818997/95 "2018-08-08T16:54:55Z")
Crap. I just spent 15 minutes drafting a brilliant well-worded reply, and the damn page crashed. \ Insurance is a way to share risk. We all throw a small about of money in the pot, and the few unlucky ones who need money pull it out of the pot. Works OK for, say, automobile insurance, because there’s a probabilistic issue- not everyone will have an accident(although those that do will face higher premiums, because, statistically, they are more likely to have a second). But everyone eventually gets sick, or gets old and gets sicker, and develops chronic conditions requiring long term care. So health insurance as such fundamentally violates the conceptual basis of insurance, because eventually, everyone in the risk pool needs a payout. THe fall back is it happens for the most part at different times of the life cycle. IMHO, the popularity of the zombie phenomena is a stand-in meme for what’s really going on- an intergenerational conflict between the relatively few younger workers compared to the rapacious older folks needing the costs of their health care covered- people like me.🙂 (side note. We HC researchers differentiate insurance as social and private. Private you get, I think. THe social means the premiums are paid through any number of different governmental mechanisms- either general taxes, values added taxes (popular in Europe) or HC specific taxes. They actually aren’t much different than a municipal fire station, in concept. All pay in for the greater good. But its not exactly voluntary, and in most countries, taxes are progressive, so the poor pay less of the purden.) SO, Fear Itself, yes, the Patient Protection and Affordable Care Act signed up 9 m. But when we went into this, the uninsured totaled more than 45 M. For political reasons, these were portrayed as folks who couldn’t afford insurance, but the reality is that many didn’t want insurance, and figured they’d just go to the ER if they had to- because lack of insurance doesn’t mean lack of access. The ER will always take you. Not top shelf, but its there. But the individual mandate has been rescinded. Because of that, many younger, healthy people won’t join. And they were needed to keep premiums down, because they pay in, but they don’t draw much out. The idea was, they subsidized the system (much like SS) until they age and need help. Some states are adding, yes, but in many states and regions, there’s only one plan available. Things are getting ugly. But the real issue isn’t so much what will happen when the system breaks down- that’s tomorrow’s pain. You’ve got to consider the pain we are feeling today. WIth HC more than 2 trillion a year, edging towards 20% of GDP (we would’ve hit that, were it not for the Great Recession) 20 cents of every dollar of economic activity in the country goes to HC. Were we to follow the medical model completely, and try every thing to save every one, theoretically, that % would become 100%. But right now, the benefits for employees exceed the costs of the raw materials for a new car. Expand that to all industry. That’s less profits, fewer taxes paid, and higher prices for goods. State and federal cofers thus receive less in, and they have seen the largest increase in outlays for HC- Medicaid in the #1 item in every state’s budget, and a huge component of the federal budget, much more than defense. What aren’t we doing today because we can’t afford to? What about the horrifically underfunded public education system? College tuition is rising so fast because state and federal government can no longer afford to subsidize higher education. What about the infrastructure? Roads, bridges, dams beyond their failure date, the list goes on, impacting just about every public service and center. We are already seeing the consequences of HC dominating our economy. The pain’s already here- its just going to get A. Lot. WORSE. ---
**Author:** ![Fear\_Itself](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/fear_itself/32/19637_2.png) [@Fear\_Itself](https://boards.straightdope.com/u/Fear_Itself)\ **Post date:** [August 8, 2018, 5:13pm UTC](https://boards.straightdope.com/t/what-realistically-happens-as-health-care-becomes-unaffordable-for-all-but-the-rich-in-the-us/818997/96 "2018-08-08T17:13:22Z")
> [@MattDHat](#): > > Some states are adding, yes, but in many states and regions, there’s only one plan available. Things are getting ugly. Things are getting less ugly if fewer counties have only one insurer. ---
**Author:** ![survinga](https://avatars.discourse-cdn.com/v4/letter/s/cab0a1/32.png) [@survinga](https://boards.straightdope.com/u/survinga)\ **Post date:** [August 8, 2018, 5:27pm UTC](https://boards.straightdope.com/t/what-realistically-happens-as-health-care-becomes-unaffordable-for-all-but-the-rich-in-the-us/818997/97 "2018-08-08T17:27:10Z")
> [@MattDHat](#): > > But everyone eventually gets sick, or gets old and gets sicker, and develops chronic conditions requiring long term care. So health insurance as such fundamentally violates the conceptual basis of insurance, because eventually, everyone in the risk pool needs a payout. A few nits to pick, even though I liked a lot of the rest of your post: Actually, health insurance doesn’t violate the conceptual basis of insurance. Whether or not everyone eventually needs a payout isn’t a determining factor in whether something is insurance. Everyone eventually dies, too, and their heirs get a payout. But Life Insurance doesn’t violate the conceptual basis of insurance either, and no one alleges that it does. ---
**Author:** ![survinga](https://avatars.discourse-cdn.com/v4/letter/s/cab0a1/32.png) [@survinga](https://boards.straightdope.com/u/survinga)\ **Post date:** [August 8, 2018, 5:28pm UTC](https://boards.straightdope.com/t/what-realistically-happens-as-health-care-becomes-unaffordable-for-all-but-the-rich-in-the-us/818997/98 "2018-08-08T17:28:43Z")
> [@Isamu](#): > > I have no idea what any of this means. Please elaborate re “social type”. Google “social insurance”. Plenty of links to help you. Sorry if my wording tripped you up. ---
**Author:** ![MattDHat](https://avatars.discourse-cdn.com/v4/letter/m/c89c15/32.png) [@MattDHat](https://boards.straightdope.com/u/MattDHat)\ **Post date:** [August 8, 2018, 8:12pm UTC](https://boards.straightdope.com/t/what-realistically-happens-as-health-care-becomes-unaffordable-for-all-but-the-rich-in-the-us/818997/99 "2018-08-08T20:12:03Z")
My bad- everyone getting sick severely fractures the conceptual basis of private insurance- complex issues, and I’m actually working for a living here, so I’ve not delved into every nuance. But its a fair question. For a hazard to be insurable, it must: 1-Be a probabilistic event over a population- To be insurable, it must be possible to determine the probability of an event or hazard occurring. 2-Be an irregular event on an individual basis- low frequency, poor predictability. Who would want to insure you (at any reasonable price) for something that they know is going to happen? 3-The event must result in substantial loss (a given here) 4-We must be able to assign a monetary value to the loss (e.g., loss of income, loss of property). Mostly a given. The other side is malpractice insurance. Assuming these for the moment, insurance has 2 basic functions: 1-Transfer of risk: Some entity assumes the overall risk- that they are smart enough to calculate all the probabilities and determine the likelihood of losses for the entire risk pool, determine an appropriate premium, which, in the end, leaves them a profit after they’ve paid out all claims. 2-Pooling of risk: the risk is spread out over all premium payers. From that, the basic formula for calculating a premium is:Premium =[(Probability of loss x Amount of loss)(Risk factor)] + Administrative costs Crude Example: Heart disease requiring surgery for a smoker, age 50 • 1/1000 annual incidence (probability) • 50,000 average cost (Amount) • 20% higher risk for smokers (Risk factor) • 10% administrative costs (AC) • (.001) (50,000) (1.2) = 60 + 6 AC = $66 This is for one single condition/event. You ever read the really fine print in an insurance policy, and it will define the insured hazards to a exact T. (remember flood insurance claims being denied because the flooding was due to hurricane surge?) So, patients over 50 will almost always have at least one chronic condition; all will be taking some Rx medications, and incidence goes up with age. Insurance firms are very good at calculating pooled incidence to figure out net probability, but when the overall probability hits 1, you end up with a premium (in the above example) of 50K. So insurance premiums just keep going up- our insurance isn’t any where near as regulated as that of other countries in the industrialized nations. And they don’t want to end up in the red. Private insurance companies would prefer NOT to insure sickly populations- hence the pre-existing condition issues. Maybe that doesn’t break insurance, but until the PPACA it sure was making life hard for a lot of people. (Many insurance companies will pay for alternative therapies. Why? Because they are more popular with younger people, who are sick less often, and thus cost less. There was a case years ago where an internal memo leaked from an insurance firm where the reason for paying for naturalistic treatment for AIDs patients was that, since naturalistic therapy doesn’t do squat, they’d die faster, thus less expensively. I kid you not) So one way of looking at the US’s twisted multiple parallel approaches to paying for health care is that, for some totally inconceivable reason (sarcasm font) some legislators decided it would be best to carve out the sickest populations and handle their HC through governmentally administered mechanisms- in other words the old and disabled (Medicare) and the poor (Medicaid). Which leaves the relatively healthy middle for employer based private insurance. I guess the question of whether a probability of loss of 1 “breaks” insurance depends on whether you happen to be an insurance executive or not. Still, mea culpa, you are correct, and I in my haste, didn’t make the nuances clear. Class dismissed. ---
**Author:** ![Banquet\_Bear](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/banquet_bear/32/373_2.png) [@Banquet\_Bear](https://boards.straightdope.com/u/Banquet_Bear)\ **Post date:** [August 9, 2018, 12:36am UTC](https://boards.straightdope.com/t/what-realistically-happens-as-health-care-becomes-unaffordable-for-all-but-the-rich-in-the-us/818997/100 "2018-08-09T00:36:24Z")
> [@survinga](#): > > NHS meets the social insurance definition to a T. > [@survinga](#): > > Google “social insurance”. Plenty of links to help you. Sorry if my wording tripped you up. …from google: > [@](#): > > With social insurance, the beneficiary’s contributions to the program are taken into account. A welfare program pays recipients based on need, not contributions. In the US, Medicare is social insurance, and Medicaid is welfare. > **[Social insurance](https://en.wikipedia.org/wiki/Social_insurance)** > > Social insurance is a form of social welfare that provides insurance against economic risks. The insurance may be provided publicly or through the subsidizing of private insurance. In contrast to other forms of social assistance, individuals' claims are partly dependent on their contributions, which can be considered insurance premiums to create a common fund out of which the individuals are then paid benefits in the future. > Types of social insurance include: > Social insurance has also been defi... From your cite: the NHS literally does not meet the social insurance definition to a T. The Wikipedia editors considered the distinction so important that they chose to add an entire sub-section to highlight the differences. Your wording is tripping people up because you are applying a concept to something you should not be applying it too. The NHS isn’t social insurance. Stop calling it such. [Previous page](https://boards.straightdope.com/t/what-realistically-happens-as-health-care-becomes-unaffordable-for-all-but-the-rich-in-the-us/818997.md?page=4) [Next page](https://boards.straightdope.com/t/what-realistically-happens-as-health-care-becomes-unaffordable-for-all-but-the-rich-in-the-us/818997.md?page=6)