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$27,000 a Year for Health Insurance. How Can We Afford That?

nytimes.com

21–30 of 53 posts

Re: $27,000 a Year for Health Insurance. How Can We Afford That?

#21

Earlier quoted context omitted.

The fundamental problem is the very idea of private "health insurance". Market forces naturally create low rates for those who don't need insurance and unaffordable rates for those who do. But over time, everyone gravitates from the former to the latter. The "free market" does not offer a practical solution to every problem. Tariffs are an open admission of this basic fact.

The problem rather is the insane amount of red tape involved if you want to set up your own health insurance company. Thus hardly any competition for the established player arises. The result is what any arbitrary textbook about economy will tell you: if there are large barriers to entry into a market (i.e. the opposite of "free market"), the customer won't get the positive consequences of a free market, but instead…

There are lots of health insurance companies operating in the USA. United Health is the largest but they only have a 15% market share.

All these companies follow suit with the market forces described above. They all want to insure young healthy people and deny old sick people --- simply because they make more money by doing so.

Over time, everyone (including you) will naturally gravitate from young and healthy to old and sick --- aka uninsurable.

Are you content for yourself or your family to be uninsured when they need it most --- after a lifetime of paying premiums? This is what private, for-profit health insurance manifests.

This is not due to "red tape" or lack of competition but is a fundamental and unavoidable characteristic of the "free market" itself.

Re: $27,000 a Year for Health Insurance. How Can We Afford That?

#22
post #2

The affordable care act doubled most people's insurance over night (This happened to me and almost everyone I know). Nobody wants to mention this, because it makes their side look bad. Until we can admit where there are problems, there will never be a solution.

That doesn’t pass the sniff test. I was self-employed and self-insured when the ACA took effect and my premiums immediately dropped when I purchased through the Marketplace (and it wasn’t subsidized). It sounds like you either had junk insurance or you’re exaggerating things to score points.

When the ACA plans first came online in South Carolina, I switched over immediately. I was paying something like $300 per month as a young healthy single male with my small company plan. I got a Marketplace plan for about $120 per month. The next year my insurer went out of business but I found another insurer in the 200s, barely cheaper. The following year this insurer also went under. I was now left with Blue Cross as my only real option charging I believe $350 per month and this continued to rise year on year, very painful for me when I was launching a startup with a minimal salary draw. Maybe your state is different but for me it killed numerous companies and left me with expensive, low quality options.

Re: $27,000 a Year for Health Insurance. How Can We Afford That?

#23

I'm in a EU country, in total I pay also around 15.000 EUR per year

In Germany a couple of two software developers would earn above the threshold of ca. 70k EUR per year each and therefore pay each around 15.000 EUR per year, which would be higher than the number given in the article ($27.000 for a family in US vs. around $35.000 in Germany currency converted). This applies for the public insurance where adults each have to be insured but kids are included for free. People with lower…

Caught me!!!! I didnt read the article before sending my comment! :-)

OK, if its for a whole family, then yes: Germany is more expensive, I can see now - 27000 USD for a 4-head family is acutally quite cheep, if i add up those numbers?

Re: $27,000 a Year for Health Insurance. How Can We Afford That?

#24

Earlier quoted context omitted.

That doesn’t pass the sniff test. I was self-employed and self-insured when the ACA took effect and my premiums immediately dropped when I purchased through the Marketplace (and it wasn’t subsidized). It sounds like you either had junk insurance or you’re exaggerating things to score points.

When the ACA plans first came online in South Carolina, I switched over immediately. I was paying something like $300 per month as a young healthy single male with my small company plan. I got a Marketplace plan for about $120 per month. The next year my insurer went out of business but I found another insurer in the 200s, barely cheaper. The following year this insurer also went under. I was now left with Blue Cross…

Yes, health insurance costs rise every year. Partly due to increasing costs, but also due to the age of the insured.

The question isn’t whether the ACA raised costs—those were always going to go up. The question is whether a the ACA made them go up less than not having it. For me, the before and after trend was remarkable. And I had higher quality insurance without lifetime maximums or arbitrary exclusions.

Republicans did their level best to neuter the bill and prevent Democrats from having a “win,” and for the most part, I’d say they succeeded. The lack of a public option and the removal of mandatory coverage were both important parts of making it work well. But in the first 5 years or so, it was definitely an improvement. I think it could be again… if Republicans cared more about serving the country than pandering to their base.

Re: $27,000 a Year for Health Insurance. How Can We Afford That?

#25

Earlier quoted context omitted.

The problem rather is the insane amount of red tape involved if you want to set up your own health insurance company. Thus hardly any competition for the established player arises. The result is what any arbitrary textbook about economy will tell you: if there are large barriers to entry into a market (i.e. the opposite of "free market"), the customer won't get the positive consequences of a free market, but instead…

There are lots of health insurance companies operating in the USA. United Health is the largest but they only have a 15% market share. All these companies follow suit with the market forces described above. They all want to insure young healthy people and deny old sick people --- simply because they make more money by doing so. Over time, everyone (including you) will naturally gravitate from young and healthy to old…

> All these companies follow suit with the market forces described above. They all want to insure young healthy people and deny old sick people --- simply because they make more money by doing so.

A private health insurance company is based on the idea that if you are young, you pay a lot more so that an actuarial reserve is built, which is then reduced again when you age. This means that if you want fair premiums when you are old, you will have to pay a lot larger premium in the young age.

Concerning your claim:

"They all want to insure young healthy people and deny old sick people --- simply because they make more money by doing so."

Insurance companies don't make more money when they insure young vs old people - but they will just calculate risk-appropriate premiums for each group. If you start your insurance coverage at a health insurance company when you are already old, no actuarial reserve has been built up (during the years when you were young), so the premiums will of course be much larger.

Re: $27,000 a Year for Health Insurance. How Can We Afford That?

#26
post #2

The affordable care act doubled most people's insurance over night (This happened to me and almost everyone I know). Nobody wants to mention this, because it makes their side look bad. Until we can admit where there are problems, there will never be a solution.

That doesn’t pass the sniff test. I was self-employed and self-insured when the ACA took effect and my premiums immediately dropped when I purchased through the Marketplace (and it wasn’t subsidized). It sounds like you either had junk insurance or you’re exaggerating things to score points.

I find it VERY likely they had a junk policy. This is one of the most important things the ACA did, it defined what could be considered health insurance. Before the ACA, a company could sell you a policy that essentially covered nothing. Usually those junk policies had cleverly worded agreements that hid the fact that nothing was covered (pre-existing conditions, restrictive networks, carve-outs for expensive treatments, etc).

Since the majority of people don't run into those issues, they are blissfully unaware that if/when they have a major medical event they are under-insured.

Re: $27,000 a Year for Health Insurance. How Can We Afford That?

#27

Earlier quoted context omitted.

There are lots of health insurance companies operating in the USA. United Health is the largest but they only have a 15% market share. All these companies follow suit with the market forces described above. They all want to insure young healthy people and deny old sick people --- simply because they make more money by doing so. Over time, everyone (including you) will naturally gravitate from young and healthy to old…

> All these companies follow suit with the market forces described above. They all want to insure young healthy people and deny old sick people --- simply because they make more money by doing so. A private health insurance company is based on the idea that if you are young, you pay a lot more so that an actuarial reserve is built, which is then reduced again when you age. This means that if you want fair premiums wh…

no actuarial reserve has been built up

This is laughable.

Health insurance companies don't have no steenkin "actuarial reserve". Inventing one is an act of rhetorical desperation on your part.

They only thing these companies consider or respond to is next quarter's profits.

Re: $27,000 a Year for Health Insurance. How Can We Afford That?

#28

Our country can afford it because it’s the last reliable source of privatized growth in revenue growth per year left in our economy. (A.I., by comparison, has merely a one-time effect of reducing headcount per dollar earned, and the Internet stripped away 99% of consumer-originated postal mail so there’s no growth left from privatizing that anymore.) So from a political standpoint it’s either maintain the health insu…

[deleted]

Re: $27,000 a Year for Health Insurance. How Can We Afford That?

#29

I'm in a EU country, in total I pay also around 15.000 EUR per year

In Germany a couple of two software developers would earn above the threshold of ca. 70k EUR per year each and therefore pay each around 15.000 EUR per year, which would be higher than the number given in the article ($27.000 for a family in US vs. around $35.000 in Germany currency converted). This applies for the public insurance where adults each have to be insured but kids are included for free. People with lower…

You're comparing what appears to be the MAXIMUM cost of German health insurance with the AVERAGE cost of US health insurance.

Re: $27,000 a Year for Health Insurance. How Can We Afford That?

#30

Earlier quoted context omitted.

> All these companies follow suit with the market forces described above. They all want to insure young healthy people and deny old sick people --- simply because they make more money by doing so. A private health insurance company is based on the idea that if you are young, you pay a lot more so that an actuarial reserve is built, which is then reduced again when you age. This means that if you want fair premiums wh…

no actuarial reserve has been built up This is laughable. Health insurance companies don't have no steenkin "actuarial reserve". Inventing one is an act of rhetorical desperation on your part. They only thing these companies consider or respond to is next quarter's profits.

> Health insurance companies don't have no steenkin "actuarial reserve". Inventing one is an act of rhetorical desperation on your part.

This is how private health insurance companies work in Germany and many other countries (more precisely for Germany "private Krankenversicherung nach Art der Lebensversicherung" (Google Translate: private health insurance in the form of life insurance); formally, in Germany there also exists "private Krankenversicherung nach Art der Schadenversicherung" (Google Translate: private health insurance according to the type of indemnity insurance)).

Facts:

- I have already worked with certified actuaries, and I am thus very certain that building an actuarial reserve which is then phased out when you get older [in German: Auf- und Abbau der Deckungsrückstellung (for life insurance) und Altersrückstellung (for health insurance) (in English, the term "actuarial reserve" is used for both kinds of reserves)]) is how the mathematics of life and private health insurance companies works (OK, formally only for the kind of health insurance that in German is called "private Krankenversicherung nach Art der Lebensversicherung" (Google Translate: private health insurance in the form of life insurance))

- if you still don't believe my claims, just read a good textbook about insurance of persons

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