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Nov 9, 2009 5:55 pm

[quote=Full Throttle]There are two issues trying to be reformed right now:

  1. Access to coverage for everyone. 2. Decrease costs.   The current bill aims to do #1, but it will have an adverse effect on #2.  The way the House bill is written, the upper middle class is the group that will take the lumps with families below the 140% FPL receiving free to subsidized care.   I think the system is broken and unless we want to be selling $10,000 and $20,000 family deductibles in 5 years, something needs to change.  The main issue is that the current reform measures aren't reforming health care, it's an insurance industry take over.  The insurance is the funding mechanism, nothing more, nothing less.  It is not the cost driver although it is an easy target for politicians since the public associates them as one and the same.   The take care of #1, increase access for everyone, I see two options:   1. Guaranteed issue as being proposed, however, it doesn't work unless everyone is mandated to have coverage and it is actually enforced.   2. A national (or better yet, state) risk pool for the uninsurables.  My state has one currently that is capped at 125% of the private rate levels and it works well.  A few other states like Maryland have figured it out as well.   *Any government run plan is completely unneccessary to fix issue #1, it is simply a power grab.   As for issue #2, this is the difficult issue to tackle.  Some issue to tackle:   1. The main cost drivers are preventable illnesses.  Think obesity, smoking, ect.  No one wants to tackle this one, but it is the main cost driver.   2. End of life care.  Also not politically popular.   3. Tort reform.  A no brainer in my opinion, but not the main cost driver.   4. Unnessary emergency room visits for the uninsured.  Mandated coverage for everyone should in theory erase this problem, but what about the illegals.  The tough decision still has to be made, pay for them when they show up or turn them away.   No one wants to tackle the main cost drivers.  As I said above, access can be changed without a government take over and should be in my opinion.  The current system is broken from this standpoint.  The cost drivers are much more challenging to fix and politically difficult to navigate.   The problem with government intervention (and more mandates) is when the program goes in place, it will severely handicap the insurers leading to substantially increased rates for the upper middle class.  Congress will cry out at the "greedy insurance carriers" and say a "single payer" system is the only way to fix it, obviously the private system doesn't work.  In 15 years, I would predict we have a single payer system or the private market will be so heavily regulated like utility companies that they will essentially be a goverment system without the stigma.   Welcome to socialism.[/quote]     Well said.  I think one thing that would lower is the cost curve is allowing insurance companies to sell across state lines.  Many states require insurance companies to cover procedures that are gender specific or uncommon.  Allow all companies to allow a base plan and add coverage ala carte (sp?).  Choose the coverage you want.  One regulation I would welcome is a review of rescission of a policy before coverage is cancelled.  I also would like to see availability of coverage for people with preexisting conditions, though I do not know how they can accomplish this.    
Nov 9, 2009 6:08 pm

[quote=Squash1]I agree with the last line of [email protected], “it’s a risk I’m glad we are taking”.

  If some how people with out insurance can start using primary care clinics instead of hospital emergency rooms, then the cost of healthcare will decrease. On average in my state, a hospital needs to charge $1500 per patient to break even. So when someone comes in the emergency room for the flu, they are losing money. But that is what most people without insurance do.   I think an attempt is better than nothing(it can always be reformed later)[/quote]   Primary care clinics are primarily done for-profit.  If payouts aren't going to high enough to allow these to be done with a decent profit, there won't be primary care clinics.    This bill isn't going to let people without insurance go without insurance.  They won't be going to the emergency room anymore, but they will be going to see a doctor, when they otherwise would not have gone.    Using basic economics, this leads to more people seeing doctors which should lead to doctors charging more.  However, it won't work this way because doctors will be limited in terms of what they can charge.  Therefore,  if we combine increase wants with constant supply and constant price, it leads to scarcity.    Greater demands for a service without more or that service existing means that the quality of that service must suffer.  In terms of medicine, we're talking about the inability to get care when care is needed. 
Nov 9, 2009 6:16 pm

Using basic economics, this leads to more people seeing doctors which should lead to doctors charging more.  However, it won’t work this way because doctors will be limited in terms of what they can charge.  Therefore,  if we combine increase wants with constant supply and constant price, it leads to scarcity. 

  Very good post.  The only means of reducing rates while keeping the coverage level at the same level and having the same cost drivers is rationing care.  That is the only possible way it can be done.  Many primary clinics already restrict how many Medicaid patients they will see per month due to slow payment from the states and the increased percentage of "no-shows" per appointments among the Medicaid population.   The AMA came out with initial support of the bill because they saw a potential increase in demand, however, I believe they now see the writing on the wall that they will be heavily regulated on what they can charge and who they get to see.
Nov 9, 2009 6:32 pm
Jebidiah,   A couple points from your post:   I think one thing that would lower is the cost curve is allowing insurance companies to sell across state lines.  Many states require insurance companies to cover procedures that are gender specific or uncommon.  Allow all companies to allow a base plan and add coverage ala carte (sp?).  Choose the coverage you want.   That sounds good as a political statement, but it really wouldn't have much of an impact allowing carriers to sell across state lines.  Removing the state mandates themselves would probably drop rates 25% to 30% overnight, but keeping the mandates and allowing intra state sales would not do anything.   For example, Ohio has some of the lowest rates in the nation.  Maine and Mass has some of the highest (which are the models the goverment is basing their system upon).  In Mass, the primary care clinic has higher lease rate for their facility, they probably pay their employees more, and in general, have higher operating costs and need to charge more.  All that would happen is the carrier in Ohio would rate their policies by zip code and those buying in the MA zip code would have higher premiums than those in Cleveland.  Due to state insurance laws, those carriers selling policies in other states would still be subject to approval by the state DOI and in effect, it would do virtually nothing to rates.   One regulation I would welcome is a review of rescission of a policy before coverage is cancelled.   This once again is a political statement that has very little effect in real life.  When carriers cancel a policy, it is due to fraud on the application.  I get people trying to lie on their apps when applying for coverage all the time until I explain the carrier's "get out of jail free card" for the first two years of the policy for misrepresentation.  If you owned an insurance company, reviewed a person's risk of future claims assuming they were healthy, then later found out they lied and had a stroke last year, how would you feel?  Unlike most politicians painting carriers as cancelling people's policies at will, this is not the case in real life.   I also would like to see availability of coverage for people with preexisting conditions, though I do not know how they can accomplish this.   This is accomplished like I said above in one of two ways: 1. Guaranteed issue, everyone is mandated to have coverage. 2. National/state risk pools.   However, there always has to be a pre-existing condition clause for those dumb enough to go without coverage in a guaranteed issue circumstance, whether a risk pool or national mandate.  Otherwise, I would wait until I'm sick, then hop on the plan.  This would lead to severe adverse selection in the risk pools.   The original plan floating around in the senate was simply a $750 fine for those not putting coverage inforce, but guaranteed issue with zero waiting periods for pre-existing conditions.  If I didn't have to answer to someone else at the end of my life, I would simply forgo the coverage, pay the fine since it would be a lot less expensive, and pick up coverage later.   The new bill just passed in the House and on the way to the Senate imposes jail time for non-compliance.  Just wait until someone doesn't comply and gets put in jail over this.  Imagine the media circus.  I just don't see it working.   In reality, a goverment take over of the health insurance industry is just cost shifting, nothing more, nothing less.  If that is what they want to accomplish, they could reform access to coverage through one of the two options above and simply give out subsidies to lower income people to purchase coverage in the private market.  Absolutely no reason to disrupt the private market.   If a reasonable arguement could be made that the goverment could and would actually lower the cost of delivering care without rationing, I would probably support it.  Unfortanetly, all proposals have the complete opposite effect.
Nov 9, 2009 7:00 pm

[quote=Full Throttle]

Jebidiah,   A couple points from your post:   I think one thing that would lower is the cost curve is allowing insurance companies to sell across state lines.  Many states require insurance companies to cover procedures that are gender specific or uncommon.  Allow all companies to allow a base plan and add coverage ala carte (sp?).  Choose the coverage you want.   That sounds good as a political statement, but it really wouldn't have much of an impact allowing carriers to sell across state lines.  Removing the state mandates This was the point of my statement.  Remove the mandates and allow personalized coverage to be purchased. themselves would probably drop rates 25% to 30% overnight, but keeping the mandates and allowing intra state sales would not do anything.   For example, Ohio has some of the lowest rates in the nation.  Maine and Mass has some of the highest (which are the models the goverment is basing their system upon).  In Mass, the primary care clinic has higher lease rate for their facility, they probably pay their employees more, and in general, have higher operating costs and need to charge more.  All that would happen is the carrier in Ohio would rate their policies by zip code and those buying in the MA zip code would have higher premiums than those in Cleveland.  Due to state insurance laws, those carriers selling policies in other states would still be subject to approval by the state DOI and in effect, it would do virtually nothing to rates.   One regulation I would welcome is a review of rescission of a policy before coverage is cancelled.   This once again is a political statement that has very little effect in real life.  When carriers cancel a policy, it is due to fraud on the application.  I get people trying to lie on their apps when applying for coverage all the time until I explain the carrier's "get out of jail free card" for the first two years of the policy for misrepresentation.  If you owned an insurance company, reviewed a person's risk of future claims assuming they were healthy, then later found out they lied and had a stroke last year, how would you feel?  Unlike most politicians painting carriers as cancelling people's policies at will, this is not the case in real life.   I am not supportive of fraud and did not say that insurance companies should be subject to it.  In many ways setting up a review process for rescission would be completely political.  It would stop the politicians of making rescission sound common and provide the public with a feel good "protection".  There are cases where rescission is misused, this can and should be eliminated.   I also would like to see availability of coverage for people with preexisting conditions, though I do not know how they can accomplish this.   This is accomplished like I said above in one of two ways: 1. Guaranteed issue, everyone is mandated to have coverage. 2. National/state risk pools.   However, there always has to be a pre-existing condition clause for those dumb enough to go without coverage in a guaranteed issue circumstance, whether a risk pool or national mandate.  Otherwise, I would wait until I'm sick, then hop on the plan.  This would lead to severe adverse selection in the risk pools.   The original plan floating around in the senate was simply a $750 fine for those not putting coverage inforce, but guaranteed issue with zero waiting periods for pre-existing conditions.  If I didn't have to answer to someone else at the end of my life, I would simply forgo the coverage, pay the fine since it would be a lot less expensive, and pick up coverage later.   The new bill just passed in the House and on the way to the Senate imposes jail time for non-compliance.  Just wait until someone doesn't comply and gets put in jail over this.  Imagine the media circus.  I just don't see it working.   In reality, a goverment take over of the health insurance industry is just cost shifting, nothing more, nothing less.  If that is what they want to accomplish, they could reform access to coverage through one of the two options above and simply give out subsidies to lower income people to purchase coverage in the private market.  Absolutely no reason to disrupt the private market.   If a reasonable arguement could be made that the goverment could and would actually lower the cost of delivering care without rationing, I would probably support it.  Unfortanetly, all proposals have the complete opposite effect.[/quote]
Nov 9, 2009 7:24 pm

This was the point of my statement.  Remove the mandates and allow personalized coverage to be purchased.

  We completely agree on this issue.  My only point was allowing carriers to compete across state lines will do virtually nothing.  It just goes to show how little the political leaders actually understand the issues.
Nov 10, 2009 2:00 am

Don’t forget, hospitals have mostly fixed expenses. If you cut out the
overcharging and the unnecessary procedures, many hospitals won’t be
able to buy all the equipment they need. This is where I believe
government can really step in and create some good.

On the other side, a hospital will give an MRI for a splinter if the health insurance companies will pay for it. Health insurance companies will pay for this MRI as long as they can raise premiums. Consumers, who only go to the hospital once ever few years have no understanding of what is in their best interest.

Nov 10, 2009 3:24 am

Let me get this straight: You're saying the reason the government should take control of the health insurance industry is so they can reduce the hospitals' profitability, therefore they will buy less equipment and this will in turn reduce insurance premiums?

Nov 10, 2009 10:06 am
[email protected]:

Don’t forget, hospitals have mostly fixed expenses. If you cut out the overcharging and the unnecessary procedures, many hospitals won’t be able to buy all the equipment they need. This is where I believe government can really step in and create some good.

On the other side, a hospital will give an MRI for a splinter if the health insurance companies will pay for it. Health insurance companies will pay for this MRI as long as they can raise premiums. Consumers, who only go to the hospital once ever few years have no understanding of what is in their best interest.

  What is in this bill that will cut out unnecessary procedures?   I think that it is very dangerous to be for something new simply because a current situation isn't so hot.
Nov 11, 2009 5:04 am

Great questions by Full Throttle & Anonymous…and I was really just making a statement so I’m not sure if this new bill will address this. I need to do some homework…but really, I need to sell some insurance…preferably a few million of Whole Life…
Still

Nov 11, 2009 5:28 pm
[email protected]:

Great questions by Full Throttle & Anonymous…and I was really just making a statement so I’m not sure if this new bill will address this. I need to do some homework…but really, I need to sell some insurance…preferably a few million of Whole Life…
Still

  You need to sell about $50mm of term face amount.  Then work on converting it to WL.  Good luck.