Health care has come up again in comments and I thought I would point to an excellent (and short) piece written by Andy over at Electoral-Vote.com. It's a perfect summation of some of the conundrums of health care legislation.
If people could walk around uninsured and then be able to sign up when they got seriously sick, many people would adopt precisely that strategy. For the average family of four, health insurance costs something like $13,000 a year. If a family expected its medical costs to be below $13,000 it rationally it would forego insurance. Then if a member got seriously ill, it would sign up for insurance and couldn't be refused. The consequence of this new law would cause healthy people to cancel their insurance until the insurance companies were just insuring sick people, which would cause premiums to skyrocket and more people to drop their insurance.
The only way to prevent astronomical premiums is to make sure the pool of insurees contains very large numbers of healthy people who pay premiums and don't file many claims. That is what insurance is all about, after all, sharing risk. That is why all other industrialized countries have mandates--everyone has to buy health insurance under penalty of law, to fill the pool with healthy people. Both the Senate and House bills contain mandates, which are unpopular but essential to prevent premiums from skyrocketing.
So my question is...how do we prevent premiums from skyrocketing with no mandate? Can we really rely on having pools of health people?
12 comments:
Truthgirl,
It probably doesn’t make sense for young, healthy people to buy comprehensive insurance policies. Insurance pools risk, and has the insured pay into a pool to cover all the expenses of all the members. Those who use the system less get less value than those who use the system more. Young, healthy people don’t use the system much at all - which means that most of their premiums will gain them no benefit at all.
A full physical nowadays usually runs about $200, which makes spending $300 a month on a comprehensive policy (the Minnesota average for 2007) an obvious waste, even if someone got a full physical every quarter. It doesn’t take a postgraduate degree in economics to figure that out — and to figure out why you democrats need to use the power of federal government to coerce younger people into this kind of economic slavery to the vast majority of the country that need their risk subsidized. Maybe people have woken up to the shackles that Reid and Pelosi have prepared for them.
There is a difference between price and costs. You democrats claimed your House version of ObamaCare, and its $871 billion price tag (based on forcing more providers into existing Medicare reimbursement rates), would keep costs low. That is incorrect because fixing prices does not lower costs. Costs are borne by providers, who get reimbursed by either consumers or by third parties for their goods and/or services. In a competitive market, providers have to set their prices at an attractive level in order to get business without missing out on profit opportunities, but their prices have to cover their costs — or they go out of business. When government fixes the price of goods and services, it usually does so to mask costs, not reduce them. This is what Medicare has done for years, which is why facilties like the Mayo Clinic here in MN have stopped taking medicare patients. When the fixed price becomes less than the actual cost to provide the service, the provider is forced out of business.
Consumers have little incentive to do comparison shopping when someone else is paying the bills, and the total amount of those bills is hidden within massive tax payments. Even if consumers wanted to comparison shop, they would have little ability to do so, since the government controls the market by paying the bills – and it doesn’t react well to any attempt by consumers to resist its authority (see - fines and jail terms built into the proposals of your bill for those who refuse to purchase government -approved health insurance).
(continued)
Even as supporters of the bill feed us an endless stream of lies about how we’ll be able to keep our own health insurance under this plan, the more candid Democrats tell friendly audiences that the "public option" is expressly designed to destroy private health insurance (happened several times). It’s easy to set a price no private industry can compete with if you can paper over your losses with billions of tax dollars.
Why do you think the stimulus package pours $1.1 billion into medical "comparative effectiveness research"? It is the perfect setup for rationing. Once you establish what is "best practice" for expensive operations, medical tests and aggressive therapies, you've laid the premise for funding some and denying others. It is estimated that a third to a half of one's lifetime health costs are consumed in the last six months of life. Accordingly, Britain's National Health Service can deny treatments it deems not cost-effective -- and if you're old and infirm, the cost-effectiveness of treating you plummets.
I realize that lots of supporters of this bill will say it doesn’t matter if the ideas in it are efficient, they’ll just say that there is a moral imperative to follow their ideas, and all opposition to their ideas is fundamentally immoral. It’s the only right thing to do in their mind. I proposed several solutions on this blog just a few months ago that will keep premiums from skyrocketing...go look them up as this missive is already long enough.
First, stop calling it insurance.
Risk pool insurance assumes a minority of the pool actually using the funds.
What we are talking about is pre-paid health care, or shared payment health care.
Hey last, I was the one that sent Mark that post awhile back, not truth girl. Blogger wouldn't let me post under anything except anonymous and I know Mark hates that.
That being said, where is your evidence to support this claim?
"the more candid Democrats tell friendly audiences that the "public option" is expressly designed to destroy private health insurance (happened several times)."
And there won't even be a public option if any bill every passes.
P.S. Happy to see that there is an "other jc"
GuardDuck said: "What we are talking about is pre-paid health care, or shared payment health care."
You hit the nail on the head. Health care is not just for the elderly or people with chronic diseases. All of us need regular vaccinations, regular checkups, dental care, breast exams, pap smears, eye exams, birth control pills, etc. Every year we get strep infections, bad colds, have car accidents, suffer skiing accidents, slip on the ice and sprain ankles, etc. Nearly every one of us has some contact with the medical establishment several times a year, even if we're completely healthy. So it's a myth that there are people who never need to see the doctor.
Then there are kids: young kids need constant attention and are a huge drain on the health care system. Even though a young healthy person may not have kids right now today, odds are they will have them in the future. Which means you and your kids will be a drain on the health care system and should start paying in now. Because the sooner you start paying in, the lower it will make premiums for everyone, including you when you start taking your kids to the doctor.
It strikes me as strange that people who call themselves patriotic are so virulently against helping other Americans stay healthy. We can't do well as a country when so many of us are fat, diabetic, out of shape, sick or going bankrupt from health care bills.
To reduce costs we need to find ways to get people to stay healthy, and getting regular medical care is extremely important. People should be taking responsibility for their own health. If you are a typical American and stay out of the medical system until you're 40, you will by that time almost certainly be obese, have high cholesterol, be prediabetic, and have any number of other expensive conditions that could have been averted if you'd only had regular medical care.
I don't know how exactly we should do it, but there should be incentives for people to take care of themselves so they don't become a drain on the system.
"It strikes me as strange that people who call themselves patriotic are so virulently against helping other Americans stay healthy."
I've said on this blog before that there is a difference between health and health care. If someone smokes like a chimney, eats big macs every day and drinks a six-pack every night...well that's a lifestyle choice. I'm supposed to help them stay healthy? I disagree...they know exactly what they are doing. There will always be some facet of society that does what feels good regardless of the consequences. I guess I never considered giving advice on ones diet as a patriotic duty that we should all engage in. Also, I never even said I was against giving them advice...and I know more about protein and carbs than most people out there.
Whatever Jeff. The words Thoughtful and Erroneous were used in both posts and it was obvious he was following up on the earlier post.
It's not that hard to find evidence.
http://www.youtube.com/watch?v=UfOWnZ82Pm4&feature=related
http://www.youtube.com/watch?v=zZ-6ebku3_E&NR=1
and finally..."The best way to single payer is through the public option" ... http://www.youtube.com/watch?v=f3BS4C9el98&feature=related
I don't know how exactly we should do it, but there should be incentives for people to take care of themselves so they don't become a drain on the system.
Health. Health care. Health insurance.
Would you all please decide which one you actually want? Then explain why YOUR health is MY responsibility (or vice-versa).
I'm not sure why last's posts were addressed to me but here's what I think.
First, it's not Obamacare. Congress writes the laws not the president.
Second, The bill from the Senate is very different from the the bill on the house. Both of them basically give the insurance companies millions of new customers which means more money. I don't understand how you think they are going to go out of business.
Third, both bills, especially the Senate version, are quite similar to Massachusetts' health care plan. The government mandates coverage for everyone but it is still run by private industry. Subsidies are granted to people who can't afford it but in the end the private companies are still making money which is what you want, correct?
They will make more money under either of these bills so what you are saying makes no sense at all. There is no public option in either bill so what are you driving at?
At least I can rest easy knowing that my rep (Mike Quigley) is on board with all of this. He understands the stakes of paying higher premiums year after year with no end in sight. Malpractice reform won't end skyrocketing costs.
mark-just sent you a pic of my new niece on FaceBook. Check it out!
Got it, thanks.
Actually, it works out better if last continues to think that I am truth girl.
Is that pic you sent to him on his facebook wall? if so, I don't see it there.
She messaged it to me.
"Then there are kids: young kids need constant attention and are a huge drain on the health care system. Even though a young healthy person may not have kids right now today, odds are they will have them in the future. Which means you and your kids will be a drain on the health care system and should start paying in now. Because the sooner you start paying in, the lower it will make premiums for everyone, including you when you start taking your kids to the doctor"
You're arguing from an assumption that we already have a monolithic "system" in place. This argument would make more sense AFTER you get the national healthcare you crave. Although it is far from perfect at the moment, thanks to the morass created by insurance companies (which Obamacare will NOT solve) I don't "drain" the system when I PAY for services for my family, any more than I "drain" the "automobile system" when I buy a car.
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