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The American Healthcare Conundrum

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Re: The American Healthcare Conundrum

#31

Post by nradov »

cogman10 wrote: post #17
timtim51251 wrote: post #7

Lots of people are saying nonsense here. The actual reason commercial insurers pay more is that's the only way to can make more profits. Because of Obamacare requiring 80% of the money they collect to be spent, the insurance companies just get to keep 20%. So insurance companies spend more so they can collect higher premiums. That's how they make more money. Several doctor friends have told me this as well.

This seems like we need similar price caps for healthcare providers, medical equipment providers, pharmaceuticals, etc. Done just in isolation for 1 part of the healthcare industry results in this obvious bad effect. Removing the rule wouldn't help things.

Price caps always and everywhere cause shortages, including long queues for certain types of care. This may be acceptable but we need to understand the trade-offs when making any changes.

Re: The American Healthcare Conundrum

#32

Post by prirun »

cogman10 wrote: post #22
bmcahren wrote: post #14

Earlier quoted context omitted.

It's easy with hindsight to believe you could have capped expense at 200% medicare but getting what we got passed was nearly impossible at the time. Before Affordable Care Act, insurers had every tool available to deny care, maximize profits, and skim more than 20% off the top. It's great we're getting closer to the point that it feels to you like incompetence that these things aren't fixed today but your anger with…

Yup, pre-existing conditions, in particular, was a beast. The patient protection portion of the ACA is one of the better parts of the whole bill.

Private insurance companies still do not cover pre-existing conditions. How? By not writing insurance to individuals except during ACA open enrollment. I know this because I tried to get private insurance before going to Mayo Clinic, because my ACA insurance with Ambetter was out of network. When I got through to an insurance company sales person for individual coverage, they told me they don't cover pre-existing conditions for 6 months. When I challenged them and said that's illegal, they hung up on me. Most companies I called had a phone menu that, when I pushed the buttons for individual coverage, would lead me into a loop, hang up on me, put me on hold forever, etc. They simply won't write individual coverage outside a couple of months at the end of the year. This effectively allows them to not cover pre-existing conditions, at least for individuals. For company employees, yes, the coverage of pre-existing conditions is a win.

I ended up paying $12K to Mayo for a week of appointments. Private insurance, if I could have gotten it, would have been at least $1000/mo for premiums (in 2020) plus $10K deductible, so I actually saved money just paying Mayo instead of getting private insurance.

IMO the only reason insurance companies allowed the ACA to pass was the stipulation that everyone in the US was required to get insurance coverage or face a penalty. When the Supreme Court ruled that provision illegal, I'm sure the insurance companies were furious that they were duped.

Re: The American Healthcare Conundrum

#33

Post by Aunche »

timtim51251 wrote: post #7

Lots of people are saying nonsense here. The actual reason commercial insurers pay more is that's the only way to can make more profits. Because of Obamacare requiring 80% of the money they collect to be spent, the insurance companies just get to keep 20%. So insurance companies spend more so they can collect higher premiums. That's how they make more money. Several doctor friends have told me this as well.

Most insurance is funded by employers who would switch insurers if they feel they're getting screwed by them.

> So insurance companies spend more so they can collect higher premiums.

This part is still true though. Insurers want you to consume more healthcare, so they'll happily pay for your chiropractor, acupuncturist, acne treatment, and Chanel gift bag [1]. Patients are happy with their benefits. Employers are happy with increasing employee retention in a tax advantaged way. Insurers are happy with the profit. Of course, you aren't going to see much health improvement from this though.

[1] https://nypost.com/2024/07/25/lifestyle/nyc-hospital-bills-3...

Re: The American Healthcare Conundrum

#34

Post by nostrebored »

cogman10 wrote: post #22
bmcahren wrote: post #14

Earlier quoted context omitted.

It's easy with hindsight to believe you could have capped expense at 200% medicare but getting what we got passed was nearly impossible at the time. Before Affordable Care Act, insurers had every tool available to deny care, maximize profits, and skim more than 20% off the top. It's great we're getting closer to the point that it feels to you like incompetence that these things aren't fixed today but your anger with…

Yup, pre-existing conditions, in particular, was a beast. The patient protection portion of the ACA is one of the better parts of the whole bill.

It’s probably the single worst decision of the entire bill and one of the largest wealth transfers in history.

If you tell me you’re going to light your house on fire and then ask me for fire insurance, I should be able to say no.

Instead what we have is not insurance, but the world’s worst socialized health plan. Insurance is for managing tail risk, not for distributing the cost of healthcare. If we’re willing to pay a tax to subsidize the elderly, we should cut out the middleman and let the government fill that function.

Re: The American Healthcare Conundrum

#35

Post by phil21 »

cogman10 wrote: post #26
phil21 wrote: post #20

Earlier quoted context omitted.

In a vacuum sure. But insurance companies operate the only part of the healthcare system that is moderately competitive. In the end employers are the ones largely paying and they are professional negotiators enough to put price pressure on insurance plans. 20% of $0 is $0. As such, as light of an incentive it is - it’s the only party in the entire system that is incentivized in any way whatsoever to keep costs down.…

It's such a small market that it's really not competitive. Further, because medicine is so expensive, it means there aren't going to be newcomers to the market who can shake thing up. It requires way too much startup capital to start a new insurance company. The agencies with the most negotiation power don't because it negatively affects their bottom line. This is why there needs to be a real second option. A public…

Insurance is really not the issue, it’s provider cost. And just the total cost entirely of the system of insanity. If you look closely into it there is no single (or few even) knobs you can tweak to fix the system. Not even Medicaid for all, at least as it’s currently designed.

No argument from me that insurance is not competitive enough. But they are almost all public corporations that are highly regulated so the numbers on profit and expense ratios are easy to get for yourself to prove the point. No need to take my, or anyone with an agenda word for it. Almost everyone wants a simple answer to a complex interdependent problem that does not have one.

If there was a single solitary answer of “what is the problem with US healthcare” I’d have to go with it being a principle agent problem. If everyone who consumed healthcare had to pay up front very few services would cost what they do. Even changing it so people were billed directly and then had to submit insurance claims later like how pet insurance or car insurance works would go a long ways. But even that doesn’t solve the problem entirely, as it leaves massive gaps. Second answer would be “administrative class bloat” like in all areas of the US today.

Single payer is certainly a major part of the answer, but in isolation it’d solve almost nothing and potentially make things even worse as all the inane cross-subsidy comes crashing down overnight.

Edit: the point is medical loss ratios, admin overhead, etc. is public information not hidden behind some private company firewall. The fact non profits haven’t captured 100% of the market by being crazily cheaper should be telling on its own.

Re: The American Healthcare Conundrum

#36

Post by dmitrygr »

timtim51251 wrote: post #7

Lots of people are saying nonsense here. The actual reason commercial insurers pay more is that's the only way to can make more profits. Because of Obamacare requiring 80% of the money they collect to be spent, the insurance companies just get to keep 20%. So insurance companies spend more so they can collect higher premiums. That's how they make more money. Several doctor friends have told me this as well.

Ding Ding Ding. We have the correct answer. And this was a predicted consequence of that profit cap.

Re: The American Healthcare Conundrum

#37

Post by Retric »

phil21 wrote: post #20
timtim51251 wrote: post #7

Lots of people are saying nonsense here. The actual reason commercial insurers pay more is that's the only way to can make more profits. Because of Obamacare requiring 80% of the money they collect to be spent, the insurance companies just get to keep 20%. So insurance companies spend more so they can collect higher premiums. That's how they make more money. Several doctor friends have told me this as well.

In a vacuum sure. But insurance companies operate the only part of the healthcare system that is moderately competitive. In the end employers are the ones largely paying and they are professional negotiators enough to put price pressure on insurance plans. 20% of $0 is $0. As such, as light of an incentive it is - it’s the only party in the entire system that is incentivized in any way whatsoever to keep costs down.…

> part of the healthcare system that is moderately competitive.

That’s only half the story though insurance companies also try and reject way more claims, cover fewer people, and are just harder to get money from than Medicare.

This means hospitals can’t afford to give them cheaper rates as they just require vastly more work from staff for the same procedure.

The industry isn’t blind to this effect, but has little reason to change.

Re: The American Healthcare Conundrum

#38

Post by nradov »

prirun wrote: post #32
cogman10 wrote: post #22

Earlier quoted context omitted.

Yup, pre-existing conditions, in particular, was a beast. The patient protection portion of the ACA is one of the better parts of the whole bill.

Private insurance companies still do not cover pre-existing conditions. How? By not writing insurance to individuals except during ACA open enrollment. I know this because I tried to get private insurance before going to Mayo Clinic, because my ACA insurance with Ambetter was out of network. When I got through to an insurance company sales person for individual coverage, they told me they don't cover pre-existing con…

Your story is missing some pieces. Why didn't you sign up during ACA open enrollment? Those policies absolutely do cover pre-existing conditions. But not every provider organization will be in network for every health plan.

Re: The American Healthcare Conundrum

#39

Post by lotsofpulp »

nostrebored wrote: post #28
raw_anon_1111 wrote: post #19

Earlier quoted context omitted.

So I happen to be in Costa Rica for the month. Just like every other 1st world country, it has managed to have universal health care that is better and cheaper without private insurance. Even if you do get private insurance for quicker access, it’s still much cheaper than the US. I just spoke to someone who flew down here to save $30K on dental work. The problem isn’t the ACA, it’s the ass backwards American health c…

ACA enshrined the worst parts of the American healthcare system for years to come. It is a politicized victory that is the best solution for no American citizens. Places I’ve been with fully privatized healthcare or single payer are both significantly better for consumers. Insurance companies have raised prices to restore profit, were briefly a mandatory expense, and will exist for years to come.

> Insurance companies have raised prices to restore profit, were briefly a mandatory expense, and will exist for years to come.

Why do their stocks underperform so badly?

https://imgur.com/S8bNSM2

Re: The American Healthcare Conundrum

#40

Post by nradov »

phil21 wrote: post #35
cogman10 wrote: post #26

Earlier quoted context omitted.

It's such a small market that it's really not competitive. Further, because medicine is so expensive, it means there aren't going to be newcomers to the market who can shake thing up. It requires way too much startup capital to start a new insurance company. The agencies with the most negotiation power don't because it negatively affects their bottom line. This is why there needs to be a real second option. A public…

Insurance is really not the issue, it’s provider cost. And just the total cost entirely of the system of insanity. If you look closely into it there is no single (or few even) knobs you can tweak to fix the system. Not even Medicaid for all, at least as it’s currently designed. No argument from me that insurance is not competitive enough. But they are almost all public corporations that are highly regulated so the nu…

Many of the largest health plans are non-profit, not publicly traded corporations. This includes most of the Blue Cross Blue Shield Association licensees as well as some other large payers such as EmblemHealth.
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