What's the point of employer-based health care?

Great Debates
41

[QUOTE=Der Trihs]
Of course it’s rational and sensible. How long do you think a society of sociopaths would actually last ? Caring about other people you don’t know is part of what makes society function.

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I guess I didn’t use correct terms. When I said “anonymous others” I was referring to statistical individuals. Once you can attach some sort of a symbol to a person by meeting them, seeing them, or knowing some sort of distinguishing characteristic they stop being “anonymous”. To me, you are not ‘anonymous’, you are SDMB user Der Trihs. That guy on the corner is not ‘anoymous’ in this sense because he is that guy on the corner.

What it comes down to is that there’s close to 7 billion people on earth, and close to 300 million in the United States. I can’t care about 300 million people because I can’t keep that many individuals in my head – I can maybe keep up to a thousand, maybe a little more. Caring about other people is important, and makes society function. Caring about statistical other people that exist only as a large number on paper is bordering on delusion.

42

[QUOTE=Sam Stone]
This is information asymmetry, and it causes a market failure in insurance markets. Insurers try minimize this problem in several ways. One is to require health screenings and medicals for applicants. But people lie about their health, and medicals don’t reveal all. So it’s only a partial solution.

This problem exists in other insurance markets to some degree, but the severity is much greater in health insurance because the consequences of picking up a poor risk client are severe. <snip> But if you pick up someone who is a high risk for dialysis or AIDS or some other expensive condition, it can cost hundreds of thousands or millions of dollars.
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As a slight hijack, get ready to see some real Orwellian *1984 * -type stuff coming down the pike.

I’m in the industry, and the newer way to go on Employer-based medical plans is to have all employees attend a Health Fair. At this fair, you’ll be asked to have a vial of blood drawn (in addition to BMI, blood pressure, etc.). If you agree to have your blood drawn, you’ll be slotted into a better version of the employee cost-share. Or, you’ll get a better monetary plug into your HSA account.

Once the blood is drawn, a 3rd-party company will do tons of labwork on it. As of now, they are selling “existing sickness” packages, where they will find out if you have hypertension, diabetes, cardiac enzyme issues, liver enzyme issues, etc. What these companys are trying to sell now (but employer at large haven’t purchased as of yet) are genetic marker packages. They’ll be able to determine if you’re prone to various diseases with genetic components (Alzheimers, cardiac, certain cancers, etc.).

For now, the employee’s participation in these programs links them up to insurance company-sponsored (but the employer pays for these) Disease Management programs, which is a good thing. For now, HIPAA protects the employer from getting this information, but it’s another example of a firewall that could conceivably be broken.

-Cem

43

[QUOTE=Sam Stone]
But if you pick up someone who is a high risk for dialysis or AIDS or some other expensive condition, it can cost hundreds of thousands or millions of dollars.
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When I was at a prior insurance company, we had (as claimants on the books) hemophiliac twins. In 1999, they were incurring $120k per month solely on prescriptions. That’s the worst I’ve seen.

-Cem

44

[QUOTE=Cemetery Savior]
As a slight hijack, get ready to see some real Orwellian *1984 * -type stuff coming down the pike.

I’m in the industry, and the newer way to go on Employer-based medical plans is to have all employees attend a Health Fair. At this fair, you’ll be asked to have a vial of blood drawn (in addition to BMI, blood pressure, etc.). If you agree to have your blood drawn, you’ll be slotted into a better version of the employee cost-share. Or, you’ll get a better monetary plug into your HSA account.

Once the blood is drawn, a 3rd-party company will do tons of labwork on it. As of now, they are selling “existing sickness” packages, where they will find out if you have hypertension, diabetes, cardiac enzyme issues, liver enzyme issues, etc. What these companys are trying to sell now (but employer at large haven’t purchased as of yet) are genetic marker packages. They’ll be able to determine if you’re prone to various diseases with genetic components (Alzheimers, cardiac, certain cancers, etc.).

For now, the employee’s participation in these programs links them up to insurance company-sponsored (but the employer pays for these) Disease Management programs, which is a good thing. For now, HIPAA protects the employer from getting this information, but it’s another example of a firewall that could conceivably be broken.

-Cem
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Holy shit. :eek:

45

[QUOTE=silenus]
Not to mention that those of us with great health insurance through work have no intention of seeing it stripped away to be replaced by some monolithic, government-mandated monstrosity that would be public health insurance.
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So, silenus, you’re not planning on retiring and going on Medicare? :smiley:

46

[QUOTE=Sam Stone]

So, short answer - insurance is commonly offered through employers because employers offer a way for insurance companies to find the kind of clients they need to price their product efficiently, and this has caused employer-based insurance to have a big market advantage over privately-sought insurance.

In the same vein, professional associations and unions often offer insurance programs - life insurance, car insurance, home insurance, etc. The power of selecting from a large group of random-risk individuals makes such insurance a good value and the market organizes itself accordingly.
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In addition, if there is a range of ages, and all employees contribute to their insurance (whether implicitly by totally employer paid plans, or explicitly through deductions) the healthier young employees help subsidize the sicker old ones.

Now, wouldn’t a universal system have even better performance, extrapolating from your argument, with which I agree 100%?

47

[QUOTE=Cemetery Savior]

Once the blood is drawn, a 3rd-party company will do tons of labwork on it. As of now, they are selling “existing sickness” packages, where they will find out if you have hypertension, diabetes, cardiac enzyme issues, liver enzyme issues, etc. What these companys are trying to sell now (but employer at large haven’t purchased as of yet) are genetic marker packages. They’ll be able to determine if you’re prone to various diseases with genetic components (Alzheimers, cardiac, certain cancers, etc.).

For now, the employee’s participation in these programs links them up to insurance company-sponsored (but the employer pays for these) Disease Management programs, which is a good thing. For now, HIPAA protects the employer from getting this information, but it’s another example of a firewall that could conceivably be broken.

-Cem
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This actually sounds great to me. Forewarned is forearmed. As for the firewall, many companies have psychiatric benefits with this same type of firewall, and I haven’t heard of any big problems with them.

In the old Bell System everyone in our lab had on-site checkups every couple of years, depending on age. Nothing so fancy, of course, but for the same reason. They did away with them to save money. I don’t know if they had the expected benefit - one problem was that our part time physician was a quack.

48

[QUOTE=Voyager]
So, silenus, you’re not planning on retiring and going on Medicare? :smiley:
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Not if I can help it. My pension plan includes health insurance, so I plan to ride that train as far as it will take me. :smiley:

49

[QUOTE=groman]
If by shallow you mean “not retarded”, then sure. Caring about anonymous others is an entirely unnatural, unneeded, dangerous and unjustifiable behavior. It’s commendable and honorable, of course, but that doesn’t make it rational or sensical.
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Hmm, I’d venture to say that once people started living in larger than family sized groups people who think that others they don’t know are irrelevant are a detriment to society.
On topic, just because there is a government offered health care it doesn’t follow that private insurance would disappear. England has NHS and private insurance and hospitals. So it’s a straw man to huff and moan about how you’ll lose your coverage, it’ll still be there. It’s just that the uninsured will then have access to care they don’t now.

50

Sam Stone explained why an individual can’t just walk into an insurance office and walk out with an inexpensive health insurance policy. The trouble is that no young healthy person is going to do this. When I was between 20 and 30 I had zero medical bills. None. I didn’t even buy aspirin. It would have cost me thousands of dollars a year to buy myself a health insurance policy. Of course, going without health insurance only works if you don’t have a major unexpected health problem…hit by a car, cancer, HIV, and so on. But at that time, I had no assets to speak of…no house, no savings, nothing. If I had been hit with a catastrophic medical problem, somebody else would have ended up paying my bills…the hospital, the government, somebody.

Now, suppose instead of being a healthy young person who expected to have zero health care costs, I knew I was going to be facing some serious medical bills. Of course I want insurance now. But the insurance company doesn’t want to cover me, why should they? I’m going to be paying a few thousand dollars a year, and costing tens or hundred of thousands a year. Even if the insurance company is an altruistic non-profit they can’t afford to pay more than they take in every year, even a non-profit has to break even or they go under.

The total amount paid every year in insurance premiums has to be greater than the total amound paid out in medical bills, or the system won’t work. That “greater than” value can be very small in a large efficient system, but actuaries need to be paid, claims agents need to be paid, the guy sweeping the floor needs to be paid, the electricity bill for all those computers needs to be paid, even in a non profit or government run insurance system. And in a for-profit scheme, the insurers need to be paid a profit for risking their capital, if they can’t make a profit then there simply won’t be a for-profit insurance sector.

And this is why insurance companies love employer based health care. Employees tend to have lower medical bills than a random sample of the population, since really sick people can’t work. And in other respects, employees represent a non-self-selected sample, which means that people who know they’re healthy can’t opt out, and people who know they’re really sick can’t opt in.

51

[QUOTE=silenus]
Not if I can help it. My pension plan includes health insurance, so I plan to ride that train as far as it will take me. :smiley:
[/QUOTE]

Well, here’s hoping your pension plan will last longer than those of the airlines and the steel companies. And that you’re still working there. I have a pension from my 15 years at [del]AT&T[/del], [del]Lucent[/del], Lucent/Alcatel. I’m not counting on it to buy me more than the occasional burger.

52

[QUOTE=silenus]
Not if I can help it. My pension plan includes health insurance, so I plan to ride that train as far as it will take me.

… should I give up my health insurance on the off chance that someday both of us might need much worse coverage?
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I assume you work for a really big and successful corporation. Good salary, good health plan…So you have nothing to worry about.

Sort of like thousands of other employees…who happened to work for Enron

(sorry if that sounded snarky)
Seriously, what health plan will you have if you get laid off or your company suffers a stock crash ? You say it is only a minimal “off chance”. But suppose a foreign corporation buys your employer and moves half of your company overseas. Your health coverage could deteriorate to the level of the rest of those average American workers who you proudly disdain. So a little investment today (i.e. higher taxes for a nationalized health care system) could save you later.

53

Another advantage from the employer’s point of view of employment-based health insurance is that it helps bind the employees to the business. People who might be willing to give up their wages and leave a job will often be more reluctant to give up their health insurance.

54

[QUOTE=chappachula]
I assume you work for a really big and successful corporation. Good salary, good health plan…So you have nothing to worry about.

Sort of like thousands of other employees…who happened to work for Enron

(sorry if that sounded snarky)
Seriously, what health plan will you have if you get laid off or your company suffers a stock crash ? You say it is only a minimal “off chance”. But suppose a foreign corporation buys your employer and moves half of your company overseas. Your health coverage could deteriorate to the level of the rest of those average American workers who you proudly disdain. So a little investment today (i.e. higher taxes for a nationalized health care system) could save you later.
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Or how about a little investment in some mutual funds or even bonds so that, if this happens, then you can be assured you’ll have money to buy private coverage. There is no guarantee that Medicare or any sort of government health care program will exist in its current form when you retire.

As Medicaid recipients find when there is an economic recession and states start seeing less tax dollars than they anticipate, all of a sudden the procedures covered by Medicaid start going away. If we ever had a single-payer system, I’d expect something similar when Congress faces the inevitable day of reckoning for spending. Of course, with a single-payer system, government spending will go up dramatically, so that day of reckoning will come much sooner.

55

An interesting story is the history of Kaiser healthcare (known and loathed here in CA as the big evil all encompassing HMO, but also the cheapest HC plan you can buy into). They started as a construction firm, that needed to offer some HC to its workers:

56

[QUOTE=Renob]
Or how about a little investment in some mutual funds or even bonds so that, if this happens, then you can be assured you’ll have money to buy private coverage. There is no guarantee that Medicare or any sort of government health care program will exist in its current form when you retire.

[/quote]

Even when I thought I was going to get a pension, I still got the maximum match out of my 401 K. I started working for the safest company in the world - the Bell System. Bell Bonds were published along with government bonds in the paper as standards. Yet Medicare is still with us, and the Bell System isn’t.

Government spending will go up, but private spending on health care will go down. Looking at other countries makes us think it is at least possible for total spending to go down, certainly spending per capita. Since even Mr. Bush couldn’t kill Social Security, I feel pretty confident about Medicare still being there. As for the deficit - well, we can just hope that those Republicans who spend like drunken sailors will be in power at the time.

57

[QUOTE=Voyager]
Even when I thought I was going to get a pension, I still got the maximum match out of my 401 K. I started working for the safest company in the world - the Bell System. Bell Bonds were published along with government bonds in the paper as standards. Yet Medicare is still with us, and the Bell System isn’t.
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Diversify, diversify, diversify. I’d much rather depend on a diverse portfolio of stocks, bonds, real estate, and mutual funds (and a few firearms, in case the world goes completely haywire) for my retirement needs rather than the government.

I don’t think spending would go down, actually. Or, if it would, then it would require a massive reduction in the current level of service. Not that there isn’t a lot of unnecessary procedures being done now that could be easily reduced, but I don’t want a government bureaucrat determining this (I don’t really like it that a private bureaucrat determines it now). People in the U.S., who are generally used to the minimal wait times in the U.S. and access to whatever treatment they want, will not stand for the waiting periods and denial of care standard with single-payer systems. That type of rationing is the only way to control costs in a system where the government pays for everything.

One day we’ll have to face the fact that spending on entitlements is going to have to be dramatically slowed (or even reduced). Our current system is unsustainable. Adding a hugely expensive new health care component onto that system will only hasten that day of reckoning. It’s not a matter of trying to “kill” SS, Medicaid, or Medicare because of an ideological desire. It’s a matter of spending rising too much for the taxpayers to bear it. Unless we reform, that day will come.

58

[QUOTE=Voyager]
Well, here’s hoping your pension plan will last longer than those of the airlines and the steel companies. And that you’re still working there. I have a pension from my 15 years at [del]AT&T[/del], [del]Lucent[/del], Lucent/Alcatel. I’m not counting on it to buy me more than the occasional burger.
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Working for the government is a wonderful thing sometimes. The State of California would have to go tits-up for my pension and insurance to be in serious danger.

We have investments out there as well, to cover any shortfalls (I hope!). If all else fails, we can always take up bank robbery. I hear the food and healthcare in a Federal penitentary are adequate. :smiley:

59

[QUOTE=Renob]

People in the U.S., who are generally used to the minimal wait times in the U.S. and access to whatever treatment they want, will not stand for the waiting periods and denial of care standard with single-payer systems. That type of rationing is the only way to control costs in a system where the government pays for everything.

Any cites that single-payer systems involve significantly longer waiting times or denial of care relative to the US system?

Here is an excellent article about the shortcomings of the US system; Myth #2, discussed on page 3, is particularly relevant to this discussion.

Single-Payer FAQ

60

[QUOTE=Thing Fish]
Any cites that single-payer systems involve significantly longer waiting times or denial of care relative to the US system?]
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Here’s a whole paper for you. On page 3 you can see the figures for “Patients Having to Wait More Than Four Months for Surgery (as percentage of all adultsurgery patients receiving elective [nonemergency] surgery in last two years)” that the figure is only 5% for the U.S. It’s 27% in Canada.