2014 Healthcare a Vent!

[A_Princess'_Daddy]

It's definitely a complicated situation. But to me, that makes it all the more frustrating that we have put so much effort into a program that doesn't even address ANY of the reasons the costs are spiraling out of control. Back when you & I were born, it wasn't unusual for a blue collar family to send the mother into the hospital for childbirth followed by a full week stay. And at the end of the week, the family would write a check for the entire bill. That's something the average family couldn't possibly afford today. Why is it SO much more? And why haven't we done anything to address THAT as opposed to trying to force more people into what is already a broken system?

You are correct, and the economist in me wants to tear my hair out because the problem is simply one of numbers, and several different types of numbers to boot. It's a similar problem with the spiraling cost of higher education (although a different set of numbers that are compounding).

The most significant issue is Medicare, which does not collect enough revenue, but is the single largest payor for most, if not all, hospitals. Falling birth rates means that not enough people are added to the revenue collection side, while the aging population grows dramatically and places greater demands on the shrinking revenue. Nobody wants to raise the FICA rate (well, that's not entirely true, but it's not a vote most politicians have the stomach for), so we have a looming problem. We can grow the tax base, i.e. immigration, but that's another third rail.

Another, underexplored issue, is one of basic math. The cost of health care increases faster than household income, and it does so for two reasons. The first is that a major expense in health care is salaries, not only of the people working in direct medical care but also the salaries of those who make the equipment that gets used, etc. And those people, like all people, expect their incomes to increase. So if the only cost of health care was salaries, and the entire profession got the same COLA that the general population receives, right there we have a problem because a 2% salary increase on a surgeon's $300,000 salary is $6,000 per year, while a 2% salary increase on a $40,000 person's salary is $800. So the gap will grow and compound each year, thereby increasing the gap every year by a bit more. The second issue is that there are other costs, as well, and those are spiraling out of control far beyond those of the salary pool. So if 33% of the cost of health care is "fixed costs," i.e. equipment, maintenance, utilities, etc., and those are increasing by 5% per year, those will also swamp the budget but still have to be paid by those who received a 2% salary increase (unless more revenue, i.e. taxes, is collected and pooled, which is obviously still being paid by somebody, but in pooling there are better areas of leverage to use). So every year the delta grows, and it becomes an intractable problem, all because of compounding's unblinking eye.

The solution comes down to one of the most basic rules of game theory, but the issue is that if we compel behavior, it's heavy handed, but if we incentivize behavior, which is the premise behind encouraging young, low-utilizers into the risk pool, then people, being allowed to act independently, will not consider the collective but rather act in their own self-interest. I do disagree with your belief that the fix is worse than the problem, but I also agree that the law could be improved. The challenge is that the polarization has led to entrenchment, as anything less than the total repeal of the law is anathema to a small segment of the Congress but one that can effectively stop progress. The best solution is for all to come to the middle, but that can only if those of us at both poles stop clamoring for total victory.

ETA: Lest it come off as partisan, my premise is that ALL sides need to come together to compromise and work things out if we are to improve things.

 

[Gumbo4x4]

I do disagree with your belief that the fix is worse than the problem, but I also agree that the law could be improved. The challenge is that the polarization has led to entrenchment, as anything less than the total repeal of the law is anathema to a small segment of the Congress but one that can effectively stop progress. The best solution is for all to come to the middle, but that can only if those of us at both poles stop clamoring for total victory.

ETA: Lest it come off as partisan, my premise is that ALL sides need to come together to compromise and work things out if we are to improve things.

I don't know if I'd go quite so far as to say the fix is worse than the problem, but I also won't rule that out. I will say the "fix" hurt more people than it helped. The question is whether those "hurt" are hurt to a lesser extent than those "helped" are, well helped. In other words, did we hurt the majority a little to help the minority a lot? Maybe we did, but I think we could have gone about it in an entirely different manner.

For those who already had insurance AND are reasonably healthy, this appears to be either a break-even or losing proposition. Nobody in that boat has gained a thing, and millions of us are losing. And that fact was known when the whole thing was set up. So, with that in mind, I believe this bill could have served everyone better (AND been more popular) had it focused instead on the people who really NEEDED the help: namely, those with extreme medical costs, the poor & uninsured, and those with pre-existing conditions who are unable to get insurance. The rest of us could have been left completely out of the equation.

Also, the salary thing shouldn't have been as much of an issue. Even though 2% on a $200,000 salary is way more than 2% on a $40,000 salary, it's still proportional. Ditto equipment. Where I think it goes off the rails is in additional costs being added, and salaries of additional staff is one. My wife was a medical secretary in a small office. With less than a dozen employees, 3 were kept full time working exclusively with billing. In the old days, that would have been handled by the receptionist. But, everything has become more difficult & time consuming and it takes more people to staff an office as a result. Obviously, technology plays a role too as new & expensive equipment that we now consider vital wasn't even available in years past. And there are dozens of other factors, but I'm preaching to the choir here

 

[A_Princess'_Daddy]

I don't know if I'd go quite so far as to say the fix is worse than the problem, but I also won't rule that out. I will say the "fix" hurt more people than it helped. The question is whether those "hurt" are hurt to a lesser extent than those "helped" are, well helped. In other words, did we hurt the majority a little to help the minority a lot? Maybe we did, but I think we could have gone about it in an entirely different manner.

For those who already had insurance AND are reasonably healthy, this appears to be either a break-even or losing proposition. Nobody in that boat has gained a thing, and millions of us are losing. And that fact was known when the whole thing was set up. So, with that in mind, I believe this bill could have served everyone better (AND been more popular) had it focused instead on the people who really NEEDED the help: namely, those with extreme medical costs, the poor & uninsured, and those with pre-existing conditions who are unable to get insurance. The rest of us could have been left completely out of the equation.

Also, the salary thing shouldn't have been as much of an issue. Even though 2% on a $200,000 salary is way more than 2% on a $40,000 salary, it's still proportional. Ditto equipment. Where I think it goes off the rails is in additional costs being added, and salaries of additional staff is one. My wife was a medical secretary in a small office. With less than a dozen employees, 3 were kept full time working exclusively with billing. In the old days, that would have been handled by the receptionist. But, everything has become more difficult & time consuming and it takes more people to staff an office as a result. Obviously, technology plays a role too as new & expensive equipment that we now consider vital wasn't even available in years past. And there are dozens of other factors, but I'm preaching to the choir here

You are correct that it hurt many of the people that were, in essence, the "good people" and that stinks. It just does. Not that it makes it better, but the problem is that managed risk only works when the risk pool is spread, which meant everybody has to go into the pool together. I am not an actuary, nor do I have a particular strength in theoretical math, but barring governmental insurance for the uninsurable, i.e. a massive expansion of Medicaid combined with a complete redefinition of the program, the only way the insurance companies were going to take on the risk was if everybody is in together.

As for my income calculation, and it was overly simplistic, the issue is that while it's proportional, the difference between the two in starting points causes the doctor's salary to accelerate and pull away from the salaries of those who pay the doctor for their treatment but are not seeing their own incomes increase at the same net dollar value. Think of it this way, using round numbers and real estate: If you own a home worth $100,000 in Town A and you want to move to Town B and buy a house worth $500,000, and each year property values increase 5% in each town, every year the house in Town B will be less and less affordable for you. Today the new home is worth $400,000 more than you paid for your home. In two years, your home will be worth $110,250 but the house in Town B will be worth $551,250, so it will now cost $441,000 more than you paid for your house. The gulf continues to widen, and every year it becomes less and less affordable to buy the house in Town B, because while prices are increasing by the same percentage rate in both towns, the second town had a head start.

Am I geeking out too much on economic theory?

And yes, you are absolutely correct that the complexity of areas like billing has added a huge layer of expense, as well. The whole system is a Gordian knot of problems that is snowballing and tangling faster than we can comprehend and it makes my head hurt to think about it.

 

[daughtersrus]

The less coverage for slightly more money is in a different plan.

Gold plan $2000 deductible, $2000 OOP max $486 a month w/o subsidy quite a bit more than I'm paying not w/ subsidy depending on income.
Silver plan $1,500 deductible $5,000 OOP Max $400 a month w/o subsidy right about what I pay now w/ subsidy (Income above $22,900)

Silver plan $500 deductible, $2,100 OOP max same plan as above (Income below $22,900) because of additional Cost sharing.

I'm still curious what coverage you currently have that will now longer be covered under the new plan. Or are you saying less insurance because you will be paying a higher premium even though the deductible on the new plan is lower?


Honestly, a $2000 OOP max sounds very low to me. Anyone with any health insures would easily reach that quickly. After paying $4,000 plus the monthly premiums, everything is covered at 100%

 

[johde]

I'm still curious what coverage you currently have that will now longer be covered under the new plan. Or are you saying less insurance because you will be paying a higher premium even though the deductible on the new plan is lower?


Honestly, a $2000 OOP max sounds very low to me. Anyone with any health insures would easily reach that quickly. After paying $4,000 plus the monthly premiums, everything is covered at 100%

In my post your originally talking about. I was posting quickly and didn't fully state that I was talking about 2 seperate plans. The $2,000 deductible/$2,000 OOP plan is slightly better than I have now. I currently have $2,500 deductible, $2,500 OOP. For $179 a month ($182 starting in December). The $2,000 Deductible/OOP plan is $486 with w/o subsity (About $250ish with subsidy but that depends on what I make next year). It's better insurance but more than I can pay.

The "less coverage for more money" is going to the Silver plan although after refiguring my best guess is about $170 a month after subsidy with the $1,500 deductible and $5,000 OOP maximum. So, Rightly I should have said, "Or less coverage for about the same money I'm paying now".

Although in both cases I'm not 100% sure what the subsidy will be. I can't get through Healthcare.gov and using 4 different calculators I'm getting 4 different numbers. The information above is based on the highest estimate, and the one I'm guessing is the most accurate based on my understanding of the law. But until the website starts working I won't know for sure. The lowest estimates add about $100 a month to the costs above.

 

[daughtersrus]

In my post your originally talking about. I was posting quickly and didn't fully state that I was talking about 2 seperate plans. The $2,000 deductible/$2,000 OOP plan is slightly better than I have now. I currently have $2,500 deductible, $2,500 OOP. For $179 a month ($182 starting in December). The $2,000 Deductible/OOP plan is $486 with w/o subsity (About $250ish with subsidy but that depends on what I make next year). It's better insurance but more than I can pay.

The "less coverage for more money" is going to the Silver plan although after refiguring my best guess is about $170 a month after subsidy with the $1,500 deductible and $5,000 OOP maximum. So, Rightly I should have said, "Or less coverage for about the same money I'm paying now".

Although in both cases I'm not 100% sure what the subsidy will be. I can't get through Healthcare.gov and using 4 different calculators I'm getting 4 different numbers. The information above is based on the highest estimate, and the one I'm guessing is the most accurate based on my understanding of the law. But until the website starts working I won't know for sure. The lowest estimates add about $100 a month to the costs above.

Thanks for clarifying.

 

[heartsy77]

They had a "healthcare expert" on The view" the other day and age said some states , such as NY, already required all health plans have the same components as the new health care act required. So I live in Ny and that means they doubled my dh insurance to cover more in other states? This makes no sense to me at all!

Sent from my iPhone using DISBoards

 

[mhsjax]

I have tremendous empathy for you, I truly do. That stinks for you and your family! But, and I realize this isn't easy to hear and please understand it's in no way a criticism of you, you also sound like you were/are planning to be a high utilizer of your insurance, which is a major part of what is pushing everybody's insurance costs higher.

My family and I are extremely high utilizers as well, due to my son's special needs which require a slate of physicians and medical professionals that rivals the phone book, and I have no doubt that our medical costs far exceed what we pay in each year. Look at it in this way: If you and your company were paying $1,500 per month, combined, for your health insurance policy, and you have a $5,000 out of pocket maximum for the year, your total contributions to the risk pool would be $23,000, which would likely not even cover the cost of your upcoming surgery and post-op care, leaving other contributors to the pool, i.e. your colleagues, to cover your other care for the year. The same goes for a pregnancy, or any major care. The issue is those other contributors are also using medical care for their own surgeries, babies and routine care, and there's not enough money to cover the medical payments, so costs rise, either through higher premiums or through cost-sharing devices such as deductibles and copays.

The challenge is that the solutions are things nobody wants to consider, including me, because they are distasteful solutions! The amount of money spent on end-of-life care is astronomical. Billions of dollars are spent each year to prolong life a few days, a week, a month, but the alternative grates at our sense of humanity for obvious and fair reasons. Expensive tests are ordered, not only to generate revenue for the physicians and medical device manufacturers but also because we, as patients, want no expense spared to save our lives. Case in point: my daughter had a low WBC count at a routine test that involved three follow-up tests and a few trips to a pediatric hematologist at a specialty clinic to make sure it wasn't leukemia. I would have accepted nothing less, but what was the cost of that, to conclude she just had a slow recovery from a harmless bug? Part of the economic theory of covering everyone with insurance is a larger insurable pool, which spreads the risk, but some people chafe at the mandate. Single payor puts everybody in the pool, but chafes at some others who oppose it. Every solution has detractors, and so we have to come together to find a solution.

So what is the solution? It's complicated beyond my ability to solve...

Also "expensive tests" are ordered in order to cover the physicians butt because people want to sue them at the drop of a hat. They are afraid not to order anything and everything under the sun, knowing full will that in todays society, some idiot lawyer on the TV is encouraging everyone to sue, if the sun doesn't shine on a certain day.

 

[robinb]

Then why when I got my letter I was given 3 options.

1)Keep my current policy and current premium of $179 until the renewal day (April 1, 2014) before being switched to an ACA compliant plan.

2) Renew my policy early (Dec. 1, 2013) for a $182 a month until Dec 1, 2014 when I would get switched to a new ACA compliant plan.

3) Switch Jan 1, 2014 to an ACA compliant plan either on or off the exchange.

The closest ACA compliant plan available on the exchange has a $2,000 deductible instead of $2,500 deductible and costs $486 a month before subsidy. My premium after subsidy depends on how much money I make. If I make over about $23,000 a year I'll be paying more or getting less insurance than now. If I make under about $22,900 I can get better coverage for less money thanks to my fellow tax payers.

The company didn't need to offer me early renewal. They did it to keep me premiums as low as possible for as long as possible. They are also actively advertising to get customers look at buying before Jan 1, 2014 to avoid the potential higher premiums.

Some state governments didn't allow insurance companies to do early renewals. Those people are getting the notices to change insurance effective Jan 1, 2014.

I read somewhere else (maybe on this thread?) that you choose (2). Given that you were offered a reasonable choice that you accepted I wonder why you felt you needed to bang your head against the ACA website. I understand about being curious about your options, but IMO a $3 increase for an ACA-compliant policy is pretty darn good and an opportunity to allow the ACA glitches to shake out before you are required to apply.

 

[davedmaine]

You are correct, and the economist in me wants to tear my hair out because the problem is simply one of numbers, and several different types of numbers to boot. It's a similar problem with the spiraling cost of higher education (although a different set of numbers that are compounding).

The most significant issue is Medicare, which does not collect enough revenue, but is the single largest payor for most, if not all, hospitals. Falling birth rates means that not enough people are added to the revenue collection side, while the aging population grows dramatically and places greater demands on the shrinking revenue. Nobody wants to raise the FICA rate (well, that's not entirely true, but it's not a vote most politicians have the stomach for), so we have a looming problem. We can grow the tax base, i.e. immigration, but that's another third rail.

Another, underexplored issue, is one of basic math. The cost of health care increases faster than household income, and it does so for two reasons. The first is that a major expense in health care is salaries, not only of the people working in direct medical care but also the salaries of those who make the equipment that gets used, etc. And those people, like all people, expect their incomes to increase. So if the only cost of health care was salaries, and the entire profession got the same COLA that the general population receives, right there we have a problem because a 2% salary increase on a surgeon's $300,000 salary is $6,000 per year, while a 2% salary increase on a $40,000 person's salary is $800. So the gap will grow and compound each year, thereby increasing the gap every year by a bit more. The second issue is that there are other costs, as well, and those are spiraling out of control far beyond those of the salary pool. So if 33% of the cost of health care is "fixed costs," i.e. equipment, maintenance, utilities, etc., and those are increasing by 5% per year, those will also swamp the budget but still have to be paid by those who received a 2% salary increase (unless more revenue, i.e. taxes, is collected and pooled, which is obviously still being paid by somebody, but in pooling there are better areas of leverage to use). So every year the delta grows, and it becomes an intractable problem, all because of compounding's unblinking eye.

The solution comes down to one of the most basic rules of game theory, but the issue is that if we compel behavior, it's heavy handed, but if we incentivize behavior, which is the premise behind encouraging young, low-utilizers into the risk pool, then people, being allowed to act independently, will not consider the collective but rather act in their own self-interest. I do disagree with your belief that the fix is worse than the problem, but I also agree that the law could be improved. The challenge is that the polarization has led to entrenchment, as anything less than the total repeal of the law is anathema to a small segment of the Congress but one that can effectively stop progress. The best solution is for all to come to the middle, but that can only if those of us at both poles stop clamoring for total victory.

ETA: Lest it come off as partisan, my premise is that ALL sides need to come together to compromise and work things out if we are to improve things.

I'll sum up what I think you're trying to say: The Affordable Healthcare Act works for those who don't work.

 

[A_Princess'_Daddy]

Also "expensive tests" are ordered in order to cover the physicians butt because people want to sue them at the drop of a hat. They are afraid not to order anything and everything under the sun, knowing full will that in todays society, some idiot lawyer on the TV is encouraging everyone to sue, if the sun doesn't shine on a certain day.

Well, yes and no. I'll spare the board another complicated economic explanation, but basically I've read several economic studies that show that the savings from not conducting unnecessary medical tests would vastly outstrip the cost of malpractice suits for missed diagnoses, both because the majority of the times the tests are not actually finding anything and because there are frequently other, less expensive tests that can achieve the same results for much less money. Also, remember nobody is saying "never use the advanced tests" but rather "use them when they are medically warranted." If they are not warranted, because there is no predicate issue or because something else can identify the same predicate issue for less money, then there is no malpractice. If my doctor refuses to order a full body PET scan because I have a small precancerous spot on my nose, that is not malpractice, especially if I don't HAVE cancer.

Contrary to popular belief, most malpractice suits are not specious but rather the result of true medical malpractice. The issue is one of culture, i.e. we all go to WebMD, diagnose ourselves, and demand the care that we think we need, rather than actually needing or benefiting from the tests we request. And the physicians provide the tests for many reasons; one of them likely is a fear of malpractice suits, but I believe it is more commonly because the vertical integration of the medical testing arena means they will benefit financially from what they order while also "satisfying their customer."

 

[A_Princess'_Daddy]

I'll sum up what I think you're trying to say: The Affordable Healthcare Act works for those who don't work.

No, that is not what I'm saying at all and please don't misrepresent what I am saying with your own views. Additionally, please don't politicize this conversation, as that kind of attitude from all sides is toxic to our nation's ability to address the issue as a nation.

 

[daughtersrus]

I'll sum up what I think you're trying to say: The Affordable Healthcare Act works for those who don't work.

Many people that work do not get health insurance.

Maybe the answer is to eliminate employer sponsored health insurance. Employers pay their workers a fair wage and everyone is then responsible to provide their own insurance.

 

[manning]

Many people that work do not get health insurance.

Maybe the answer is to eliminate employer sponsored health insurance. Employers pay their workers a fair wage and everyone is then responsible to provide their own insurance.

And allow insurance to be bought nationwide instead of being restricted to regional. Get some competition into the game.

 

[lauradis]

Many people that work do not get health insurance.

Maybe the answer is to eliminate employer sponsored health insurance. Employers pay their workers a fair wage and everyone is then responsible to provide their own insurance.

This is just plain crazy.

Whats next employers shouldn't offer vacation, sick time, profit sharing because it isn't fair that everyone doesn't get it as an employee.

Please life is not fair.

You want more. Go get more.

 

[daughtersrus]

This is just plain crazy.

Whats next employers shouldn't offer vacation, sick time, profit sharing because it isn't fair that everyone doesn't get it as an employee.

Please life is not fair.

You want more. Go get more.

It's not crazy. Why should employers be responsible to provide your health insurance? If they pay you a fair wage, you can then purchase whatever plan meets your needs.

 

[lauradis]

It's not crazy. Why should employers be responsible to provide your health insurance? If they pay you a fair wage, you can then purchase whatever plan meets your needs.

Because employers should be able to provide any benefit they want.

I get a very fair wage and was pleased with my labor requirements and benefits.

Till Aca screwed it up.

 

[A_Princess'_Daddy]

Because employers should be able to provide any benefit they want.

I get a very fair wage and was pleased with my labor requirements and benefits.

Till Aca screwed it up.

The only issue with that is that the government subsidized your employer's ability to offer you health insurance by allowing your employer to deduct the cost of that insurance from their gross income, thereby reducing the corporation's tax liability, as well as allowing you to pay your share of the premiums on a pre-tax basis, which again saves you taxes. The fact that you receive the benefit and value it, as do I, doesn't mean that it's not a subsidy from the federal government in order to encourage your employer to offer insurance.

 

[daughtersrus]

Because employers should be able to provide any benefit they want.

I get a very fair wage and was pleased with my labor requirements and benefits.

Till Aca screwed it up.

Do you really think that your employer wants to provide insurance or do you think that they could be doing it for some other reason like the breaks that were mentioned? Neither would be getting those tax breaks if they increased your salary and had you purchase the plan on your own.

 

[Muushka]

Many people that work do not get health insurance.

Maybe the answer is to eliminate employer sponsored health insurance. Employers pay their workers a fair wage and everyone is then responsible to provide their own insurance.

If anything good comes from this ObamaCare, it would be that health insurance would be similar to homeowners and auto insurance. It would not be job dependent, you could shop around.