These are going to be recognized as a policy disaster.
There are many cases where a somewhat expensive treatment saves a very expensive hospitalization.
For instance, a steroid inhaler for asthma costs about $200 a month, maybe you have two $200 specialist visits a year. So for $2800 a year (not covered by high-deductible insurance) you can probably be symptom free or you can take your chances and have an exacerbation and a $28,000 hospitalization (which insurance will pay some of after the deductible)
Docs hate them too.
With real insurance, you have maybe a $20 copay you pay at time of service and they know they are going to get paid by the insurance.
With fake insurance, they don't know what you are going to pay until months later when the insurance gets around to telling them. Then you get a bill that says you owe $291.44 for some unspecified service you got 6 to 18 months ago.
(They can't tell you what it was because that would violate your privacy)
Needless to say they have a big accounts receivable this way, many people don't pay or they pay late (e.g. a few months after getting a bill they don't understand as well as something that says "THIS IS NOT A BILL" they don't understand). This is not good for their finances or their state of mind.
In theory high-deductible plans might lead you to shop around between providers to get a better price but in practice nobody can or will tell you what things costs and it doesn't work.
It's a perfect example of the neoliberal mind at work.
My premiums and deductible are north of 10k. This is why I laugh when some one tries to scare me with the old "with Medicare for all, your taxes will go up!" I'd gladly and enthusiastically pay more in taxes to rid myself of the current system.
I used to think employers would love to have to be able to stop offering insurance. But then I realized for the most part, employers love the current situation. Offering health insurance keeps employees chained to their desks. They'll moan every now and then about costs going up, but the current system ultimately serves them well.
What if someone suggests your taxes would rise by 10k? Are you concerned because that much money is an expenditure you can’t afford, or is it just behavioral and you’d rather prepay in the expense in your taxes than choose to spend it?
If you get access to the same level of health care even during periods of unemployment - meaning, you might be paying no taxes at all - I wouldn't mind a bit.
The top level comment gave a perfect example why. Preventative care is cheaper than emergency care. When everyone (including the unemployed) can get preventative care, total costs go down.
That unemployed person with no insurance still gets emergency care. The hospital doesn't turn them away to die in the street. They don't pay the bill. They go into bankruptcy instead. The hospital makes it up on all the paying customers (the insured). Your $10k is already paying for the ones who don't have insurance. Medicine is already socialized!
Now, if we can acknowledge that, can we do the fiscally responsible thing and make sure everyone can get preventative medicine?
> When everyone (including the unemployed) can get preventative care, total costs go down.
This is one side of the coin: when everyone goes to the doctor on a cold, total costs go way up. Its an economic problem, it requires economic solutions. Private insurance, for all its bad rep, has very strong incentives to have proper utilization. More so than government: when a patient gets hospitalized, insurance loses money. Govt never loses money!
> Your $10k is already paying for the ones who don't have insurance. Medicine is already socialized!
>Private insurance, for all its bad rep, has very strong incentives to have proper utilization. More so than government: when a patient gets hospitalized, insurance loses money.
"when a patient gets hospitalized, insurance loses money...." and the patient gets the treatment they need. you seem to have forgotten that part.
"Proper utilization", in a private sense, is the same as "maximize shareholder value". Anything that damages shareholder value is not "proper".
Sick people have very strong incentive to want treatment. HEALTHY people have very strong incentive to want treatment for sick people. Private insurance has very strong incentive to take in as much money and pay out as little as possible.
> and the patient gets the treatment they need. you seem to have forgotten that part.
> "Proper utilization", in a private sense, is the same as "maximize shareholder value".
Access - Quality - Cost. Somebody has to make a choice.
If what you care about is unabated and unrestricted access, get ready to pay more than what you pay today.
Insurances don't provide medical care: they don't have patients, they have clients that wish to not pay doctors directly and be protected from the risk of sudden high costs.
Don't complain to your car insurance company that cars are expensive!
As long as the other ways require less effort for the patient/care receiver to worry about where to find quality health care, I'm game.
If I have to shop in a market full of confusing terms, exceptions, reams of paperwork (I am not a medical expert) the solution is already crap. When it comes to health care, the a provider should not have an opportunity to gain advantage by segmenting the market into different groups or risk pools, or hiding behind long and complex policies that require a subject matter expert to understand.
Before the ACA, a colleague with a small consultancy (IIRC ~10 people) discussed how ridiculous the term “market” was: none of the companies would even tell him the coverage details for the plan (“each member will get a booklet”) so the idea of shopping around was positively Kafkaesque, lacking basic information and having substantial time and cost penalties if you realized you made a mistake and wanted to switch.
I'm proposing we don't accept higher taxes and/or universal health care as foregone conclusions. I think we can do better than just sitting here on hacker news and smugly mocking those who "don't get it."
If you take away my 20k health insurance premiums (many commenters are not counting employer contributions), tax me an extra 20k, and now I have no deductible and can switch jobs fearlessly, how am I not better off?
I hate my HDHP but as far as I can tell it’s ultimately driven by the massive increases in medical care costs. My total premium cost (counting employer contribution) is a little more than 20k and I have a 7k deductible. How much higher would the premium be with a more reasonable deductible? You pay one way or another.
I agree it’s a huge nightmare dealing with the bills and claims processes, but I’m not sure that goes away with high deductible plans.
At the end of the day we have to get medical costs under control and I don’t think there are any great ideas for that right now. Public single payer will help, and it could at least end the billing nightmare, but I don’t see it actually solving the underlying problem of skyrocketing health care costs because the problem is too big and people are too politically invested in the way things are now.
The insurance company is coming out ahead on me, even when I had a kid I still paid them more money than they paid out, but a coworker’s wife had a heart attack and had some extraordinary care that the insurance was ultimately paid more than a million dollars for. These major health events and chronic illnesses are completely through the roof in terms of costs.
If HDCP and other plans exist on an open market, then the difference of the cost between them tends to be the amount of the deductible. This is what I have seen on the Obamacare exchange and also in prices for employer provided plans.
The reason for that is adverse selection. If you don't expect to go to the hospital then you can save money with the HDHP. Only very sick people will choose the more reasonable deductible.
In my experience at three different employers the lower deductible plans are more expensive by more than the difference in the deductible. That is, in my experience, it has always been more rational to choose the higher deductible plans because even if I assumed I would always meet the deductible the cost of the deductible plus the premium was always less on the HDHP.
More or less this. I am a person who exceeds not just the deductible but the out of pocket max more years than not. The out of pocket max on the bronze plan is something like $7k and the out of pocket max on the platinum was still $5k, but the premium difference is $900/mo. There are certainly cases where you come out ahead on the platinum but I think they are unlikely for most people.
While not applicable for everyone (such as your asthma inhaler example), HDHPs aren't bad for people who don't have regular health expenditures. I like my HDHP for two main reasons:
- Regular annual checkups are still free
- You get access to an HSA account, which is effectively the most tax-advantaged retirement account available. You can deposit income pre-tax, invest the balance (minus a few hundred), and withdraw tax-free as well for either health expenses (at any time) or for any purpose (after 65).
Why I was 25 I hardly ever got sick. Now I'm double that age, and I'm in good shape but eventually something will happen. When I was 25, I could have had a hdhp then, but I was a super poor grad student and got whatever my university offered, a regular plan. Eventually I got a real job, there was no hdhp offered and I had regular insurance. The thing was, by being part of a larger pool, I was helping make insurance reasonable for everyone. That's as it should be. I do think ubiquitous health insurance that everyone has will save money in the end, and it's a humane necessity.
You are right that the HSA is a nice complement for the HDHP. If your employer has an HDHP and puts a good chunk in your HSA for you that could be a better option than a conventional plan.
Policy disaster? On the contrary, insurance companies love this. They have a counterintuitive conflict of interest - that is, they make more money when health costs are more expensive, through higher premiums.
> they make more money when health costs are more expensive, through higher premiums
Do you have a citation for this? If this were true, why would they aggressively negotiate lower costs and offer discount Rx cards?
In the US, higher premiums mean fewer subscribers. I'm a co-founder of an auto-insurance company, and all we ever try to do is lower premiums in order to compete.
> The 80/20 Rule generally requires insurance companies to spend at least 80% of the money they take in from premiums on health care costs and quality improvement activities. The other 20% can go to administrative, overhead, and marketing costs.
Basically, if you want to make more profits, you have to increase the raw size of that 20%. There's really only one way to do that - raise premiums. You can't really lower costs, as you risk having to pay back your subscribers for having shrunk the costs side too much.
Assuming you have competing insurance companies, then you can’t just raise premiums if your costs are unnecessarily high.
Unfortunately, a properly functioning insurance market would require dumping everyone on the market, not just those who aren’t lucky enough to have it from their employer, who tend to be in better health anyway.
>Assuming you have competing insurance companies, then you can’t just raise premiums if your costs are unnecessarily high.
That's true if it's just your costs that are unnecessarily high. But you can encourage policies and regulation that raise the total cost of healthcare for everyone.
The main factors keeping cost high is low supply of doctors, hospitals, and medicines. I’m not aware of any insurance industry effort to keep those supplies down. If anything, seeing a doctor who charges $200 for a 5 minute visit to prescribe antibiotics for a fever or a hospital that charges $7.5k for a no complications birth is what keeps prices high.
If people had doctors and hospitals competing to offer standard procedures like births, broken bones, fevers, etc at lower costs, then that’s what will bring prices down.
>The main factors keeping cost high is low supply of doctors, hospitals, and medicines.
This is an enormous oversimplification unless you are taking such a broad view of "low supply" that it loses usefulness.
>I’m not aware of any insurance industry effort to keep those supplies down.
I don't know every policy that insurance industry lobbyists push. I do know that they lobby against price transparency--the lack of which almost certainly plays a role in healthcare costs.
>If people had doctors and hospitals competing to offer standard procedures like births, broken bones, fevers, etc at lower costs, then that’s what will bring prices down.
For elective procedures like plastic surgery and LASIK sure, but overall medical care is full of such extreme examples of market failures that you need more than just free market competition to control costs.
I’m not aware of them lobbying against price transparency. I can easily search procedure codes on my insurance website and get the cost back. What I can’t get are the procedure codes from the doctors or the hospitals, somehow not a single person that works there knows what procedure codes will be billed.
There are many cases where a somewhat expensive treatment saves a very expensive hospitalization.
For instance, a steroid inhaler for asthma costs about $200 a month, maybe you have two $200 specialist visits a year. So for $2800 a year (not covered by high-deductible insurance) you can probably be symptom free or you can take your chances and have an exacerbation and a $28,000 hospitalization (which insurance will pay some of after the deductible)
Docs hate them too.
With real insurance, you have maybe a $20 copay you pay at time of service and they know they are going to get paid by the insurance.
With fake insurance, they don't know what you are going to pay until months later when the insurance gets around to telling them. Then you get a bill that says you owe $291.44 for some unspecified service you got 6 to 18 months ago.
(They can't tell you what it was because that would violate your privacy)
Needless to say they have a big accounts receivable this way, many people don't pay or they pay late (e.g. a few months after getting a bill they don't understand as well as something that says "THIS IS NOT A BILL" they don't understand). This is not good for their finances or their state of mind.
In theory high-deductible plans might lead you to shop around between providers to get a better price but in practice nobody can or will tell you what things costs and it doesn't work.
It's a perfect example of the neoliberal mind at work.